House Rich Cash Poor Retirement?

[imnontrad]

My home is only about 10% of my total net worth. I'd rather have a smaller home and then have more money for investments, travel, and maybe even a second home somewhere. Also, because it is now below the median price for homes in this area (HOT RE market), I know that I would have absolutely no problem selling it or turn it into a rental for positive cash flow. Some of the more expensive homes (and 1 mil would definitely be in that category) sit empty on the market for a while.

 

[DCdave]

According to your post it sounds like your pension and both SS checks cover your expenses. If that’s the case I say go for it. For years my plan was to sell our home in a high cost area and bank a lot of cash when moving to somewhere more reasonable. Instead we fell in love with an “almost always on vacation” type of place with a beautiful view and a ton of parks/restaurants/museums/bike paths, etc right out our door. Instead of banking money this place was 60% more expensive but we pinch ourselves every single day because we love it. You only live once and we are very glad we made the move as we are enjoying every day.
PS...No pensions but this was not a reckless as we can withstand the inevitable market correction and our calculations are still in good shape

 

[Sunnymar]

Reading many of the responses reflects different lifestyles and locations.I've lived in Southern California all my life, my $3 mil house is a shocker to those lower priced areas. I am also thankful each and every day for my house and location with great weather daily. My house if paid off, I do know I can sell it and buy a cheaper place if I needed to, but believe I'll ever NEED to, but may want to.

Some areas in California are subject to loss of value in the short term, most are not in the long term, some never lose much value. When considering volitle areas I think of the Palm Springs larger area, it has many second home and retired people dying off, little good career prospects for those interested in that so I have seen big drops that last longer than other areas. Beach communities in the greater Los Angeles area come back real fast. Your local area is the best measure of your financial risk.

My vote is DO IT.