I’ve always understood you. Understand that I have no issue with your personal purchase. Your house would be great for a lot of people and the rough numbers work.
But also understand that I am never talking about extreme/worst case scenarios. Pretty much anybody I know would be not okay with a 50% haircut if they actually took that hit. If you don’t agree, then I’ll just give you worse and worse scenarious until you do.
What I am talking about is typical. Do you plan to stay 5 years? 10? Til you die? How old are you? Do you have kids? Do you want to have kids? Do you want to be landlord down the road? Could you afford that and still pull off an upgrade buy?
All that said, I think your first example fits this perfectly (3-5 year move up based on appreciation), but what I think is lost is the notion of reasonable hope/expectation. Now, no one knows, but I contend that if someone’s plan _today_ is that they want to pull this off, they most likely will not be able to do so. Now, can they make the best of it? Of course, wise people do that.
In other words, individuals need to honestly assess probabilties. To do otherwise, simply sets them up for disappointment (and sometimes worse…)
After all, aren’t reasonable probabilities the reason guys like you and me have been around here for 4 and 2 years respectively?
(hope that last joke is okay. you have to know that I just enjoy sarcasm. i also know that it doesn’t translate in written form very well, but that doesn’t stop me. you might even think i was funny if you knew me in person…)
