Trevor Bennett, Loan Consultant with Caliber Home Loans, recently received an email from a client named Ellen, who wished to share her journey to home ownership and the creation of wealth and happiness that followed.
Ellen's message reads: "Here is the story of our home ownership journey. In September of 1965 we bought a 4 bedroom house with a fabulous western view of the Olympic Mountains in Montlake. It cost us about $18,000. We had a VA mortgage, as Bill was fresh out of the Navy. Four years later we sold this house for $26,000, and used the money for the down payment on a big old 7,800 square-foot house in Madrona for $42,000. Nine years after that we moved to Baltimore, after selling for $345,000: a nine-fold increase. The Balto house was huge, with 10 bedrooms, but only $300,000. That sold 4 years later for $380,000 and we bought a house in North Carolina for $340,000. It was only 4,500 square-feet but sat on 20 acres of land. In 1998 we sold the house in North Carolina for $590,000, split of 10 acres which we sold separately, and resolved to fully purchase a house on our return to Seattle, and NEVER have a mortgage again.
We found a house in Seattle with views of Mt. Rainier from every single room, basement included. It was "only" $465,000. Only problem is we decided to massively remodel the whole place adding a second story, and invested another $400,000. Flash forward to 2012 when we sold that house for $1.3 million. Meanwhile we found out that the big old house in Madrona had sold at the top of the market for $2.7 million. I guess we should have stayed there, but what a wonderful journey we have had, and what fantastic homes we have lived in. Aside from retirement funds, the backbone of our investments has always been the homes we have lived in. Even if you add in improvements to these houses along the way, we still came out way ahead. Never wasted a penny on a rental which is pretty amazing. You can run the figures any way you want, but we have lived very well, and these houses gave depth and dimension to our lives and the lives of our children and grandchildren -- all eleven came into this world when were were living in North Carolina.
My grand experiment of trying to live in an apartment (Skyline) failed miserably and here I am in a house again and living on an acre of land. I am not just a space hog in a house, I need room to roam, gardens to tend, and the feeling of really living in the world around me. The apartment living as slowly taking all the life out of me. I never knew the weather, I never saw the stars, I never saw the moon or sunrise. I only knew if it was raining by peering out into the street below and seeing if the people had umbrellas or the cars had their windshield wipers turned on. That turns out to be a really bleak way to know the world. And if you have never experienced the full joy of a moon rising on a clear night and watching it make its way across the sky, then one of life's great treats is passing you by. There will be super moons on August 29th and September 28th (they are called super moons because they are so close to the earth and seem bigger than usual). Find a place for watching the moon on either of those nights (somewhere on Lake Washington) and be amazed at the awesomeness of the world around you.
So, my advice to you -- hurry up and buy that house somewhere if you haven't already. I am not even in the mortgage business. I have a huge mortgage, but the prevailing wisdom is not to worry about it at my age. When and if the house sells, it will more than pay for itself and we are back to ground zero again. In the meantime, 60 years of home ownership has been nothing but a blessing.
That's my home-ownership story. Never thought about inflation--just did it."