Poll: Compare value of your residence to investment portfolio

[prototype]

Renting now, so that's how I voted.

I was at about 33% before I sold my Northern Va home in 2014. Under my current plan (2018 home buy) I will probably be at 25-30% when I pay cash for a home in a lower cost area.

 

[bison74]

11%. No mortgage.

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[Sojourner]

I'm in the 0-10% group (about 7.7%), using the average of what Zillow says my house is worth and what my county property tax bill says. The Zillow number seems high to me and the county number seems low, so I think something in between is probably pretty accurate. It's been years since I poked around on Zillow -- pretty cool site!

Does anyone happen to know (or want to guess) what the results of this poll would be if taken by the general public? I'm guessing the >50% bar would be the winner by a long shot, but I'm curious to know what the actual numbers would be.

 

[Danmar]

I'm in the 0-10% group (about 7.7%), using the average of what Zillow says my house is worth and what my county property tax bill says. The Zillow number seems high to me and the county number seems low, so I think something in between is probably pretty accurate. It's been years since I poked around on Zillow -- pretty cool site!

Does anyone happen to know (or want to guess) what the results of this poll would be if taken by the general public? I'm guessing the >50% bar would be the winner by a long shot, but I'm curious to know what the actual numbers would be.

Yes, would be interesting but should only be for retirees or those close to retiring.

 

[jazz4cash]

Does anyone happen to know (or want to guess) what the results of this poll would be if taken by the general public? I'm guessing the >50% bar would be the winner by a long shot, but I'm curious to know what the actual numbers would be.

The curious thing about this poll I think is the more you analyze the less meaning you will derive, so it really is just for fun. In your challenge to guess the percentage of the general public many people have very little equity (as in mortgaged to the max or upside down) and fairly low net worth as well so my guess is their ratios are not dramatically different than the RE crowd. Come to think of it what does negative equity do to this calculation?


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[sheehs1]

I voted before I checked Zillow's value for my home which is lower than my tax value so not sure how valid Zillow is. But using Zillow's value:

If i use liquid investable assets plus book value of stock in family business (which is an investment) I get 9.1%.

If I use only liquid investable assets I get 11.9%

No mortgage.

 

[sengsational]

Some of these percentages are very high, which means the hard asset component of that asset distribution is kind of locked into that high spot. Not that that's 'bad', just that I wonder if there are folks in that position that are ignoring their personal residence when it comes to setting and maintaining their asset allocation. Of course if you wanted to "rebalance" out of hard asset towards, say, equities, you could always take out a loan and buy stock.

 

[Persn]

I'm at just about 50% on the CA Central Coast. Since we just finished a major remodel I don't actually know what my house is worth. The Zillow estimate is low and we don't even have the reassessment from the tax man yet, though that is coming. Also I have a pension, not included, and a mortgage. I love my house, and its location, so I'm not complaining.

 

[Huston55]

Currently renting in San Francisco. If I purchased [-]this[/-] an equivalent home outright, my ratio would be about 50%.

+1 & also in SF Bay Area.

I chose "renting" for the poll but, if we purchased an equivalent home, our ratio would be in the 30-40% band.

 

[Daniel J]

About 30% with a house and condo in the Bay Area. Will sell one or the other within 6 months.


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[CaliKid]

Why are rental properties not in the equation? I don't get the significance of house to liquid. Seems more important to know house to overall assets because that is more an indication if one is living beyond their means, no!?

 

[YVRRocketSurgery]

Actually, I would have expected the value of your Vancouver home to increase by a bigger multiple over ~20 years. I owned a home in Winnipeg for 20 years and sold it for 3.08 X my purchase price. Five years on, it has recently been on the market for 60% more than that (I don't know the 2016 sale price). Granted, both I and the new owners had done some renovations. And the numbers are an order of magnitude smaller than in Vancouver.

Hmm, I suppose. I still find the current valuation pretty nutty. If we had to buy in now from scratch, we'd find it pretty daunting.
Hard to compare apple to apple though when reno's/improvements are involved.

 

[samclem]

Why are rental properties not in the equation? I don't get the significance of house to liquid. Seems more important to know house to overall assets because that is more an indication if one is living beyond their means, no!?

The poll results don't tell us anything about cash flow/living beyond means, etc. As structured, the poll tells us what share of respondents' assets (minus future pensions and a few other things) are tied up in their house. I agree that it might be more intuitive to include income properties along with other investments.

 

[daylatedollarshort]

I don't think these numbers are too meaningful in places like California. The original owners in our neighborhood have seen their house prices increase by a factor of over 25 times the original cost. So they aren't really house poor - they've just chosen not to sell and move some place cheaper.

 

[RobbieB]

Or they've chosen not to sell and move somewhere more expensive.

 

[jkern]

50%. Live in SF bay Area.

 

[VFK57]

37.5%. Live in SF Bay Area.

 

[MikeWillRetire]

25%, Maryland, just a few years from retiring.

 

[Slow But Steady]

We're retired, and the house is less than 10% of our net worth.

We're lucky to live in the Houston area, where housing prices are relatively low. Of course, folks in the Houston area can easily spend three or four times the value of our home, especially those who want to live close to central Houston. We're quite happy out in the suburbs, though.

 

[Ready]

43%, Southern California. Kind of crazy, I know.

 

[rodi]

Some of these percentages are very high, which means the hard asset component of that asset distribution is kind of locked into that high spot. Not that that's 'bad', just that I wonder if there are folks in that position that are ignoring their personal residence when it comes to setting and maintaining their asset allocation. Of course if you wanted to "rebalance" out of hard asset towards, say, equities, you could always take out a loan and buy stock.

I can only speak for myself.... But my retirement plan did not include "spending" my house or using my house for anything but shelter. Since it's paid off - the expense is just the normal expenses of owning a home - maintenance, upgrades, taxes, insurance.... Those are the same among similar size houses whether the house is in a high COLA or low COLA.

My retirement plan did include rental income from our granny flat... but that income and the value the granny flat adds to our house is specifically excluded in this poll.

As for asset allocation concerns... I don't own any REITs so the primary and granny flat kind of skew the asset allocation towards that... but I don't worry about that. I don't include the house in the withdrawal rate. My investible assets have a mix of equities and bonds and cash in roughly 60% equities, 40% bonds&cash.

All that said - owning an expensive house outright gives me a robust "Plan B" option if the market tanks, one or both of us ends up in extended long term care, or some other catastrophic event. It gives me confidence to forgo the LTC insurance.

 

[OneDay]

Great poll, I'm at about 7-8% with a paid for home. Not being house poor sure makes it easy to stack those Benjamin's.

 

[Tallman4123]

Was at 29% until we sold our condo in the Boston area in August when I FIRE'd. Now at 13% based on the home we just bought "back home" in a slightly less HCOL area still on the east coast.

 

[stlguy57]

Ours is 6% but I don't count it in the bucket of investable assets.

 

[Gumby]

Some of these percentages are very high, which means the hard asset component of that asset distribution is kind of locked into that high spot. Not that that's 'bad', just that I wonder if there are folks in that position that are ignoring their personal residence when it comes to setting and maintaining their asset allocation. Of course if you wanted to "rebalance" out of hard asset towards, say, equities, you could always take out a loan and buy stock.

I was thinking about this today. If I had cash equal to my total assets to allocate today, would I really choose to invest 24% of it in residential real estate? Probably not. But there you have it.