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Longtime readers of Humble Dollar will know a semi-recurrent theme to my writings involves the idea that luck, timing and not-following-certain-financial-rules have helped shape my financial journey.
Perhaps most notable is the purchase of a home I made in late 2018. I was well-acquainted with the rule that stated nobody should purchase a home if they don’t intend to live in it for at least five to seven years. And yet I really had no choice. My soon-to-be husband and I owned four large dogs between us. Anyone who knows me knows very little means more to me than my dogs.
I also knew my plan was to retire in mid-2022. If my plans held, I would only own the home for three-and-a-half years.
Living in Portland, Oregon at the time meant housing costs were relatively high at the time. I finally found an 1100 square foot home in a nice neighborhood that cost $375,000.
From 2018 through mid-2020, the valuation on the house changed very little. As my retirement date grew closer, I hoped I would at least be able to list the house for $400,000 and perhaps, lose just a couple of thousand dollars on my purchase.
By early 2021, housing values began increasing. I was growing more hopeful I wouldn’t lose money on my housing gamble.
By 2022, housing values were hitting new highs. In hind site, I would discover it was the peak of the market. By March of 2022, the house was listed for $475,000 and two days later I had a cash offer of $600,000. My husband and I were allowed to stay in the house, rent-free, for two months. The new buyers waived their right to have the house inspected, which meant I had no financial obligation to make any repairs.
Walking away with such a large sum of cash just prior to retirement made me feel much more secure than I could have imagined. In addition to the good timing of the housing market, I also had good timing in regards to interest rates. My credit union was offering a rate of 5.5% on cash held in their ‘select’ savings accounts.
Just a few weeks ago, I found out that the house I sold in 2022 is back on the market. The initial listing price was $540,000. It is now down to $500,000. From the listing, it sounds like the current owners invested at least $15,000 in various repairs to the home after they purchased it.
I’d love to hear how other HD readers have had luck, timing and ‘failing to follow the rules’ work in their favor!
Foolish housing gambles have worked for me not once, not twice, but three times. At my first wife-to-be’s insistence, I sold my comfy condo, which had doubled in value in three years of ownership (Bay Area real estate insanity). I bought us a house nearby for about 30% more than I could afford, which I almost lost after two years (I was two payments behind).
Jump ahead 15 years and wife #2 and I sold the house for double its purchase price, purchasing an Oregon beach house that promptly became a money pit. Jump ahead another six years, past cancer and repair projects and the pandemic, to another burst of real estate insanity that turned rural oceanfront properties into uranium mines. Realtors were literally knocking on the door. We profited handsomely from what had clearly been a bad idea, and fled to Seattle.
Again I strained myself to the financial maximum — very unwise at age 65 — to buy an oversized house, much too big for just the two of us, in a near-panic to buy a place in the midst of the mania. However, four years later it has become clear that we lucked out again. The place is perfect and full of family. I call it my frog house. I’m here until I croak.
And none of the three previous homes significantly appreciated in value since I sold them. I could have sat on them like eggs in a nest and never done any better. Pure luck.
The Portland Oregon real estate market was good to me, for sure. My first house was purchased for $62,500. Sold five years later for $120,000. Second house (located five blocks away from the first house) was purchased for $173,000 and sold for $420,000 about twelve years later. Third house was the one I wrote about. I occasionally look at all of them via Zillow. The first house is now worth $394,000. The second one is estimated to be worth $650,000. And the third one, the one for sale right now, just sits there, apparently worth at least $100,000 less than it was three years ago…
I was let go from a job that I thought I would retire from, doing it for 25 plus years. During that time my wife and I had saved through her defer compensation account and she also was working toward a pension. After I was let go I ended up working for an municipality for 8 and 1/2 years and ended up earning a small pension. I figured out that what I put toward my pension I was paid back in four and a half years. I’ll be retired now for 9 years in 2 months. I also opened up a deferred compensation account while why being employed with the municipality. I started it day one of my employment with them and now have a nice amount invested and not touched since I’ve been retired. I don’t know if I strike it up as luck and timing or Divine Providence. Things worked out better than I thought they would after being let go from a job that I truly enjoyed.