It’s not a bad deal for him. He took the profits and traded up. He cleared $410k on the condo and did not piss it away. If he bought an $800k house he might loose $300k of that when the market drops. He’ll do fine because he still would be up $100k.
Personally, I wouldn’t ‘ve bought the house.
The problem with the recent market is that many buyers leverage their gains into bigger and bigger homes using exotic loans. When the market drop, they’ll loose all the gains and more.
I know one couple who started with a $350k house in 2002. Now they live in a $1 million house with no change in income. Their income is not that stable so a recession and a loss of income would turn their house into must sell inventory at the worst of times. Children will hit HS graduation and college age in about 4 years. That’s when they’ll NEED money.
