Friend sold his house in rising market for big $ now complains about prices

[pudding]

My friend is driving me a bit crazy on this one.

He bought a house, and when the market went nuts he sold it for a large profit and rented a place.

Since then the market went completely nuts and the house he sold is now worth about 1.5 million more that when he sold it.

Now he's complaining about how house prices are too expensive and it's prohibiting him from being able to buy a house.

I'm thinking you can't have your cake and eat it too.... you can't sell and have your profit and then complain that the same rising market that made you a handsome profit is stopping you buying a house....

What do you think?

[pteam]

Let him complain about it all he wants it's his problem. He chose to try and time the market and lost.

[Dicey]

If he invested the profits well, his NW should have increased in the same time period. If he did, the pea's just under a different shell. If he didn't, he only has himself to blame for making such a speculative move.

[Accidental Fire]

Isn't that what we call "1st world people problems"?

[rothwem]

Isn't that what we call "1st world people problems"?

I actually think "humblebrag" is more appropriate for this situation. 

FWIW though, this is the reason I haven't sold my place yet.  I could make some good money (not $1.5 million though), but then I'd have to buy something else that's inflated and I wouldn't net much profit out of it. 

[soccerluvof4]

Predicting a top , good luck.  He should be happy he made what he wants and learn patience. I am sure another opportunity will come along. Shoulda, Coulda, Woulda....

[LindseyC]

OH my, I am going through this exact same thing with a neighbour/friend right now. Only with a slight twist. They have lived in their home for 19 years, they bought at a low price but did not take care of their place. So when it was time to sell the real estate agent told them they would need to do some serious work on the house. They got a loan, spent months doing the work with a contractor. It looked amazing when completed, although it cost them a lot more then they budgeted for.

They just sold it yesterday for 100k over ask (this is not a million dollar neighbourhood so that's a great price for this area)

All she has done is complain for months now. 1) she is upset that they did all this work and paid for it but will never enjoy the house as it is now 2) she is complaining about the prices of other houses, without recognizing it's a red hot market right now which benefitted her sale. 3) the FOUR days she had people walking through her house was the most inconvenient thing ever!!!!

I'm at my wits ends because I am trying to be supportive, but I also think she is being insane about the whole situation.

The other issue that is also colouring my view a bit is that she has been complaining for 24 hours about preparing for a colonoscopy, like she is dying. I have colitis, so those kind of procedures are like a regular friggin Tuesday for me. So while I have sympathy because I recognize its an awful procedure, I also want to shake some reality into her.

Negative people drive me nuts, everyone has negative moments and I don't mind cheering someone up during one, but constant negativity and a total lack of self awareness is awful. I'm at the point where I am glad she is moving away, I hope she moves far away!

Wow, sorry, apparently I needed to vent. Hahaha

[slugline]

This is why I don't think homeowners should feel excessively giddy about rising home values inflating their net worth. If  you're ready to cash out and move to a lower cost area, sure. But I wouldn't expect to gain much by trading for similar housing in the same market.

[BlueHouse]

This is why I don't think homeowners should feel excessively giddy about rising home values inflating their net worth. If  you're ready to cash out and move to a lower cost area, sure. But I wouldn't expect to gain much by trading for similar housing in the same market.

I had a neighbor whose strategy was to simply move around the country, following (or trying to precede housing price increases).  He and his wife both had the kind of jobs you could do anywhere for anyone...When I knew him, he sold spas.  I'm sure he could have sold other things too.  I think his wife was in some form of retail. Neither was high-level...just walk into a storefront and fill out an application type of jobs.

They bought a primary house on interest only loans and when the price increased to their pre-defined number, they would sell and pack up and move to their next location.  There must have been a lot of research on his part because he always knew what the next place would be, although I'm sure that changed over years.   He was in the northern Virginia location for about 10 years, until his home hit the million dollar mark, and then he moved to Vegas during the recession. 

It's an interesting concept.  The bulk of his wealth came from increased real estate values in his primary home, but he was playing the long game.   No kids and willingness to move to be able to arbitrage geographically, was his advantage. 

Anyway, yeah...you have to be willing to move to win at the real estate game.   

[rothwem]

Negative people drive me nuts, everyone has negative moments and I don't mind cheering someone up during one, but constant negativity and a total lack of self awareness is awful.

One of my girlfriend's friends is like this, but I realized that she's just socially awkward, and complaining is the easiest way to make conversation.  Point the convo to a positive topic and they'll follow right along with you. 

[dougules]

Just curious, what have rents done in comparison to prices? 

[pudding]

If he invested the profits well, his NW should have increased in the same time period. If he did, the pea's just under a different shell. If he didn't, he only has himself to blame for making such a speculative move.

He did invest the money well into a commercial property.

Thats also why I'm thinking you can't sell a house, invest the money in another property and then complain that you can't afford to buy a similar property to the one you sold!

He's like the polar opposite of a mustachian. He bought the house and then rented a really expensive one around the corner because it had a better view?  Left the house he's bought empty for 2 years saying it had issues like the headroom above the stairs was to low and the bathroom configured in an awkward way. Until the bank told him to sell it, at a time that meshed with his needing the $ for the commercial property.

Anyway I'm ranting ;)

[pudding]

Just curious, what have rents done in comparison to prices?

Rents didnt go up much at first, but now they're catching up.

[LindseyC]

One of my girlfriend's friends is like this, but I realized that she's just socially awkward, and complaining is the easiest way to make conversation.  Point the convo to a positive topic and they'll follow right along with you.

Truly I have. I am a pretty positive person and even when I am feeling negative I have a pretty good self deprecating humour I use to make others laugh. I always try to turn it around with her but nothing works. Honestly I don't generally give up on people, I have a lot of faith that people can turn it around, but i have just given up on her.

[frugalnacho]

I've had a similar conversation with coworkers many times.

CW: I'll buy the house, then it's going to go way up in value! Sell it and profit!!!!!
me: Uh..where are you going to live? If the market is way up you are going to have to buy an equally expensive house.  It's a double edged sword that doesn't benefit you at all if you just buy back in.  In fact it hurts you immensely because the transaction cost of buying/selling houses is going to increase similary since it's a percentage base.
CW: *blank stare*

Unless you are planning to downsize big time, or move to another region that hasn't followed the same price trends as your current location, I don't see how increasing prices really help.  My house has about doubled since I purchased it, but so has every other house in my metro area, so even if I sell it I'm not actually making anything because I'll just have to turn around and dump that into another expensive house.

[RFAAOATB]

Lots of articles on home prices mention that the bulk of American's net worth are in their homes.  How do we break it to America that if the bulk of your net worth is home equity, you're probably doing it wrong?  An expensive house is a nice place to live but won't feed you unless you plan on eating drywall.  People need to think retirement first, home equity second. 

On the opposite end, who is preparing for another housing crash to buy at the bottom?   Due to heavy investments I have very little cash which means less ability to favorably position myself relative to the market, and stocking cash now would mean less shares invested for the future.  I may be stuck in my poor condo for a long time. 

[frugalnacho]

Lots of articles on home prices mention that the bulk of American's net worth are in their homes.  How do we break it to America that if the bulk of your net worth is home equity, you're probably doing it wrong?  An expensive house is a nice place to live but won't feed you unless you plan on eating drywall.  People need to think retirement first, home equity second. 

On the opposite end, who is preparing for another housing crash to buy at the bottom?   Due to heavy investments I have very little cash which means less ability to favorably position myself relative to the market, and stocking cash now would mean less shares invested for the future.  I may be stuck in my poor condo for a long time.

I thought the link was going to be this: