Poll: Primary Home as % of Net Worth

[copyright1997reloaded]

We simply want to move south for better weather, and a change in scenery, and it’s going to cost significantly more. After a life of LBYM, it takes a little thought for me to essentially increase our fixed costs. We’re not looking to test our financial limits at all, nor for “bragging rights” or “living around snobby people.”

OP, I wasn't referring to you. I too will likely have a more expensive home if/when I move.

However, there are many people out there who do think they need to be in the "best" home and have the "best" car. They don't tend to be the same people as who post here because many here are advocates of LBYM, even after retirement.

Since people are posting houses, I'll contribute one from my recent random looking at areas around the country:https://www.zillow.com/homes/for_sale/Prescott-AZ/64958962_zpid/26620_rid/500000-_price/1958-_mp/34.539607,-112.410189,34.527339,-112.429415_rect/15_zm/1_rs/

 

[hesperus]

I do not want a mansion, but my pipe-dream location is expensive. And on a waterfront lot, it is rare to see something less than 3,000 sq.ft.

PS. If I had $10M, I would more likely buy a $3M home than a $150K car. It's all about priority.

Agreed, and Bainbridge island is quite beautiful. I know the area from my grad school days at UDub. I would certainly put something like that above a fast car on my priority list.

 

[Amethyst]

Evidently we are not at that "wealth point." I would love to have more to spend on a house, although grateful to have as much as I do. The house does not need to get bigger and bigger, but there is no upper limit on desirable locations/cost thereof.

I
I'm always amused by the "how much house" or "how much car" can one afford. That question makes sense... for those who are house limited by income, but doesn't make sense (to me) once one reaches a certain wealth point. .

 

[calmloki]

Using the formula given we are at 13% total using current plausible values for our N&S homes. I keep looking, because I like real estate. Think it is funny that we have loans secured by this
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

and this

https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

but our homes are quite modest in comparison. My dreams are something else though - bank turned down our offer on this great views home, then accepted $10k less a year later, just after we had bought our SoCal home:
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

More recently there was this wacky place trying to lure me - would have been a big stretch and it is very nutty, but a great location and not your normal tract home..
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

 

[CardsFan]

Hindsight is a wonderful thing. In retrospect I probably should have used your definition of net worth, I’m just used to thinking about net worth WRT supporting spending, which typically excludes home value. My mistake. Fortunately the poll results have served the intended purpose for me at least.

I have a cousin the Bay Area. He is retiring soon. Good state pension, but I don't think he has a large retirement account (at least by the norms on this site). Using your original basis his home is probably approaching 200% of his invested net worth (not counting the PV of pension/SS.)

But, when he retires, moves out of state, and buys a new house for 1/2 the current one, that could flip to 60%.

Your original basis was not bad, it just accentuates the cases where the house value is really high relative to investments.

 

[brucethebroker]

My poll vote would be 35% but that is not meaningful to the OP since the bulk of my income is pension and SS and normally not included in net worth.

Excellent point, and one that should come up in any discussion of net worth.

If pensions, SS, and PT income isn't taken into consideration, the numbers may be skewed. If that cash flow was converted into present value, the % of primary residence for many of us would be much lower.

Not trying to be critical of the survey, BTW. The results are interesting.

 

[NW-Bound]

...More recently there was this wacky place trying to lure me - would have been a big stretch and it is very nutty, but a great location and not your normal tract home..
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

It is difficult to clean all those glass panels of that house. Definitely not a DIY chore.

And I wonder if it is difficult or expensive to heat/cool that house, as glass does not have good R-value.

PS. Homes in the high-country boondocks of AZ, and I figure boondocks elsewhere, are not typical tract homes as in the cities. Even a shack is "custom", as there are no big divisions for builders to put up homes en masse. The hilly lots mean that each home has to conform to the site, and that adds to the uniqueness of the homes.

 

[USGrant1962]

We're slightly under 13% for our primary home. Seems like a very common number.

Slightly over 15% if I include our summer cottage.

Calling it a "cottage" makes it snooty-tooty

 

[copyright1997reloaded]

My dreams are something else though - bank turned down our offer on this great views home, then accepted $10k less a year later, just after we had bought our SoCal home:
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

More recently there was this wacky place trying to lure me - would have been a big stretch and it is very nutty, but a great location and not your normal tract home..
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

Very cool. Prescott is on my list of places to visit for a possible eventual relocation. I am worried that it might be too "California like" for me but I do like some of the out there houses I've seen there on Zillow. I would also like to visit places like Payson and Pinetop-Lakeside. I've never been to any of these (but have been to Flagstaff and somewhat liked it).

 

[traineeinvestor]

I came up with 10.4% and rounded down to tick the 6-10% box.

I'm comfortable with this number - no plans to trade up, trade down or buy a second home (in part due to tax complications if I buy a "home" in another country).

 

[tb001]

We're not ER yet, though I think we could be by the numbers. In CA and in the 40+ box. Actual number depends on housing market fluctuations and the market. We hope to be fully retired within the next 5 years and, though we're looking at moving, the ratio probably won't change that much. We have young kids, so while we're older, we're not quite at the downsizing phase of life yet. Moving to a lower CoL area is on our list of backup strategies if the numbers start to look shaky.

As others have pointed out, this is as much about the assets you have available to spend and any potential income as it is about % of your worth. But it's an interesting question. I posted something in a similar vein a couple of weeks ago. It seems nuts to count as zero something that is such a large % of your net worth.

One of the earlier posters talked about lifestyle priorities and I think this is such a good point. I'm a total homebody. Most of my interests and hobbies revolve around either my home and/or nice weather. So a nice home in a temperate location is important to me. If I had a major travel bug, I would probably want a very different house. You've done the work, earned the money, and now it's about priorities in how you choose to spend it.

 

[hesperus]

More recently there was this wacky place trying to lure me - would have been a big stretch and it is very nutty, but a great location and not your normal tract home..
https://www.zillow.com/savedhomes/f...53,27.430289,-136.911622_rect/4_zm/1_rs/1_fr/

Very attractive to former air traffic controllers I'm sure

 

[PandaBear]

I live in a HCOL area. I'm at a crazy high 85%! (Dh retiring in May 2019 and me lagging behind him).

 

[Koogie]

Calling it a "cottage" makes it snooty-tooty

It's regional. That's what they call them here. Up north they call them "camps"

I've always thought "lake house" seemed snootier. "I say, luvvie, shall we have the Baldersons out to the lake house ?"

 

[calmloki]

It is difficult to clean all those glass panels of that house. Definitely not a DIY chore.

And I wonder if it is difficult or expensive to heat/cool that house, as glass does not have good R-value.

PS. Homes in the high-country boondocks of AZ, and I figure boondocks elsewhere, are not typical tract homes as in the cities. Even a shack is "custom", as there are no big divisions for builders to put up homes en masse. The hilly lots mean that each home has to conform to the site, and that adds to the uniqueness of the homes.

I'm sure the glass makes for plenty of solar gain - roasty toasty in the summer. The ceiling curtains were kind of indicative. At ten stories, six accessible by elevator, it claimed/s to be the tallest single family home in the US. I see a walkway around the top of the glass ceiling area on picture #40, so an extension pole might make cleaning the roof easier, but also see an extension ladder laying up there! NOT the place I want to start to clamber up a ladder to wash the upper windows!

 

[kcowan]

It is as quoted by Kcowan in post #67.

Perhaps Kcowan did some edit, and caused the mislabeling.

I quoted post #65 after the PS.

 

[kcowan]

It's regional. That's what they call them here. Up north they call them "camps"

I've always thought "lake house" seemed snootier. "I say, luvvie, shall we have the Baldersons out to the lake house ?"

Yes lake house is definitely more accurate around there. A cottage has an image like no stainless appliances et al.

 

[NW-Bound]

Very attractive to former air traffic controllers I'm sure

Yes, Calmloki's dream house is quite unconventional.

For a 360-deg view, I prefer something a bit more conventional like this: a round house.

All it takes is money. And some time to scout for the right location.

 

[RobLJ]

Just a schooch over 20%--but it was more like 15% when we bought 3 years ago. It's gone up about 40% in value in 3 years, which seems crazy.

 

[DEC-1982]

I'll have to go through all the responses at a later date. One thing I know for sure is compromises have to be made (as for most things in real life), because some of our wants contradict some of our other other wants or maybe contradict the reality faced by us.

 

[PoorOldCountryBoy]

We’re relocation home shopping (again) and everywhere we want to live is too expensive and everywhere I think homes are reasonable doesn’t fit our wants and needs. So I’m faced with ponying up quite a bit more for our retirement dream house. This has come up in/directly in several threads lately, but I can’t find the last poll on the subject.

Yes I know it all comes down to supporting spending based on our new net worth after a $200K hit, but just wondering what’s typical.

I’m probably being a cheapskate (coupled with fear of buying in a somewhat appreciated market), and DW is being reasonable, but whatever you do - don’t tell her.

For the poll, please use

• Numerator: $ Value of your 1 primary residence (2 homes if you’re a snowbird), but don’t include income properties.
• Denominator: Your $ net worth without primary residence, but please include income/investment properties.
• If you’re still working, paying a mortgage - use full value of your home and projected net worth both at retirement. If that’s too far off to project (if you’re younger), please don’t vote?

One tip about retirement shopping is don't over buy size wise.

Make sure you consider if you can take care of the house when you aren't feeling well. ex. Those classic 2BR Florida retirement houses with about 1000 SqFt, versus the new retirement palaces that are pushing 3000 SqFt. Would you be able to clean/maintain 3000 SqFt if you had a knee replacement, for example?

When you're flush with cash at 62, 3000 SqFt looks great, later, not so much.

 

[jetpack]

primary home is an income property.. so 0%?

it's probably about 5% if that.

 

[Koogie]

Just a schooch over 20%--but it was more like 15% when we bought 3 years ago. It's gone up about 40% in value in 3 years, which seems crazy.

+1

Almost exact same numbers, and in the exact same number of years.

Glad to see someone else is also living in a bubble area too...

 

[RenoJay]

~8% for me. But for my parents who are die hard LBYM types it’s around 30% since their neighborhood keeps appreciating. Not sure this metric should matter that much...I think what matters more is the expected SWR after the move.

 

[calmloki]

Wandering afield, per normal. So in the ongoing search of odd but somewhat attractive places I found this. Have to wonder - is the inhabitant used to prison cells? Plans to lock
people up in behind the interior commercial steel doors with deadbolts? Maybe they are of the werewolf persuasion and lock themselves in.. No interior light? Whats that about?

Check pictures 17 and 33. Yummy!

https://www.zillow.com/homes/for_sa...-112.853966,34.319338,-113.444481_rect/10_zm/