My parents bought a house in 1978 for $35k (inflation adjusted that’s $135k in today’s dollars). Now, 40 years later, they are moving states and looking to sell. The sale price estimates they are getting? $80k to $100k.
The house is in Oklahoma City, which is growing but where land is basically free so the city just expands outwards, constantly creating nice, new neighborhoods on the outskirts. But the state refuses to invest in anything (taxes are of the devil, you see), so those areas have to watch their schools and infrastructure slowly decay until the lovely neighborhood they raised their kids in turns into yet another ghetto where no one wants to buy. Buyers instead flock to the nice new homes in the outskirts and the cycle continues.
In 1978 my parents decided to be closer to my father’s family in OK rather than my mother’s family in CA, and 40 years later that decision is costing them hundreds of thousands of dollars at the very least.
I suppose there are multiple lessons to be learned, but with so many people here posting confidently about how much their real estate will increase in value, I wanted to throw out a counterexample. It is a gamble. Don’t count on it completely when making your FI plans. Time in the market may be a cure-all for index funds to counter dips, but the same isn’t true for real estate.
(Another lesson to be learned is that Oklahoma is a shithole not meant for human habitation, a cultural, ecological, and economic wasteland, but that’s not very on topic for FI and most of y’all probably already knew that.)
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