Good day,

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

I said that we planned to stay in the condo as long as possible,
putting extra money down on the mortgage.

My friend said that we should move to an intermediate house of, say,
$400K, as it would provide more "financial leverage" that would be
required for the big house.

I argued that selling a home costs a lot of money in real-estate agent
commissions, legal fees, moving fees, renovation costs, etc.

He argued that the value of the houses increases at a rate that more
than compensates for these charges.

This is a possibility, but the market is at a high right now (area:
Toronto, Canada), and could conceivably "correct" in the next few
years once the glut of new homes are bought-up.

I also mentioned that a larger (intermediate) house begets larger P&I
payments, and larger interest payments mean a greater waste of money
that could otherwise have gone towards principal on my current
mortgage.

He then mentioned that the increase in value of property is
proportional to the size of the property (i.e., greater absolute
capital gain on a larger property than on a smaller one), to which I
must agree.

Can anyone offer any thoughts on this?

Thanks
A. Huahua

In article , Warren X
wrote:

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

There really are only 2 issues to consider:

1) can you put down a $160,000 down payment (the normal 20%), or
at least $80K plus closing costs?

2) can you carry $4000 a month house payments for 30 years?

If you answer no to either of these questions, then everything
else is a moot point.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

In article , (Warren X) wrote:
Good day,

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

I said that we planned to stay in the condo as long as possible,
putting extra money down on the mortgage.

Sounds like a wise plan to me.


My friend said that we should move to an intermediate house of, say,
$400K, as it would provide more "financial leverage" that would be
required for the big house.

Doesn't make sense to me.In essence, he's arguing that, say, $150K equity in a
$200K house provides less "leverage" than $150K equity in a $400K house. Ask
him to explain his reasoning. I think he has it backward. Which home will be
easier to sell when you decide to buy the palace, the $200K one or the $400K
one? Which one will you have more equity in?

Seems to me that a paid-for $200K house, and a big chunk of money in the bank,
should be all the leverage you need. Maybe things are different in Canada, but
here in the U.S. it's more or less the standard to make a down payment of at
least twenty percent when buying a home. If you have that $200K house paid
for, that's a 25% down payment on an $800K house -- plus you would have
additional funds saved that you did *not* spend on the $400K house while
waiting to buy the $800K house.

I argued that selling a home costs a lot of money in real-estate agent
commissions, legal fees, moving fees, renovation costs, etc.

He argued that the value of the houses increases at a rate that more
than compensates for these charges.

Sometimes it does, sometimes it doesn't. If anyone could reliably predict the
future, he'd be a billionaire many times over.


This is a possibility, but the market is at a high right now (area:
Toronto, Canada), and could conceivably "correct" in the next few
years once the glut of new homes are bought-up.

There is an inherent contradiction in what you say here. If there is a glut of
new homes, then supply exceeds demand. If supply exceeds demand, the market
cannot be at a high.

If it *is* at a high right now, you're best off to keep your current home, or
sell it and buy a *less* expensive one. Trading up when prices are high will
cost you dearly.

I also mentioned that a larger (intermediate) house begets larger P&I
payments, and larger interest payments mean a greater waste of money
that could otherwise have gone towards principal on my current
mortgage.

That is correct.

He then mentioned that the increase in value of property is
proportional to the size of the property (i.e., greater absolute
capital gain on a larger property than on a smaller one), to which I
must agree.

The pool of potential buyers for $800K houses is necessarily much smaller than
the pool of potential buyers for $400K or $200K houses. This makes the price
of the expensive houses more sensitive to changing economic conditions. They
are likely to increase in value faster during good times -- but they also lose
value faster during bad times.

Consider also the jeopardy in which you place your financial security by
living above your means, if indeed an $800K house would be above your means;
even after converting to US$ -- around a half million -- it's certainly above
*mine* :-(, and conversely, conisder the benefits to your financial security
from living below your means.

You might want to visit the library or a bookstore, and get a copy of "The
Millionaire Next Door". It's an analysis of typical American millionaires, how
they got that way and how they *stay* that way. I'm sure the same principles
apply in Canada :-). Seems the typical millionaire in the U.S. drives a Buick
or a Ford F-150 that's a few years old, has been married 30-some years or more
to his first wife, has never spent more than a few hundred dollars on a
suit, and lives in a $200-300K (U.S.) house in a middle-class neighborhood.
Bottom line is, part of how they got to be millionaires is by not spending
money needlessly.

One of the more interesting parts of the book, IMO, is the comparison of the
spending habits of millionaires and high-income non-millionaires. I suspect
your friend may fall into the latter group.

Can anyone offer any thoughts on this?

It obviously costs less money to buy a $200K house than a $400K or $800K
house. I think your friend has not thought this through as well as you have.


Thanks
A. Huahua

--
Regards,
Doug Miller (alphageek-at-milmac-dot-com)

Save the baby humans - stop partial-birth abortion NOW

On 27 Jul 2003 16:24:18 -0700, (Warren X) wrote:

Good day,

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

I said that we planned to stay in the condo as long as possible,
putting extra money down on the mortgage.

My friend said that we should move to an intermediate house of, say,
$400K, as it would provide more "financial leverage" that would be
required for the big house.

I argued that selling a home costs a lot of money in real-estate agent
commissions, legal fees, moving fees, renovation costs, etc.

He argued that the value of the houses increases at a rate that more
than compensates for these charges.

This is a possibility, but the market is at a high right now (area:
Toronto, Canada), and could conceivably "correct" in the next few
years once the glut of new homes are bought-up.

I also mentioned that a larger (intermediate) house begets larger P&I
payments, and larger interest payments mean a greater waste of money
that could otherwise have gone towards principal on my current
mortgage.

He then mentioned that the increase in value of property is
proportional to the size of the property (i.e., greater absolute
capital gain on a larger property than on a smaller one), to which I
must agree.

Can anyone offer any thoughts on this?

Thanks
A. Huahua


I tend to agree with your friend tho maybe not for all the same
reasons. Unless you need a larger house, I'd go for the smaller house
now. Your values / needs may change and the savings in the difference
in the extra payments may help pay for them. Also its no guarantee
houses will go up in value; they can go down in value. If you think
of a house as an investment (I don't any longer), I'd rather hedge my
bets and buy the smaller house and spread my money out in other
ventures.


** remove .invalid from my email address to reply by email **

lid wrote in message . ..

I tend to agree with your friend tho maybe not for all the same
reasons. Unless you need a larger house, I'd go for the smaller house
now. Your values / needs may change and the savings in the difference
in the extra payments may help pay for them.

Likewise, his values / needs may expand & he finds himself needing
that additional space. Better to have it then to have real estate &
moving fees etc. all over again. :-/

Also its no guarantee
houses will go up in value; they can go down in value.

Not if you care for them, and if the neighborhood is sound...right?

If you think
of a house as an investment (I don't any longer), I'd rather hedge my
bets and buy the smaller house and spread my money out in other
ventures.

OK, but I'd shy away from the stock market.

On 29 Jul 2003 08:40:59 -0700, (Shorty
Blackwell) posted in misc.invest.real-estate:

wrote in message . ..

Also its no guarantee
houses will go up in value; they can go down in value.

Not if you care for them, and if the neighborhood is sound...right?

All neighborhoods go in cycles. What's a slum today was once an
exclusive address, and what's an upper-class neighborhood today was
once woods.

If you buy the woods a few years before building boom starts you're a
hero. If you buy a townhouse in what's about to become a burst bubble
you're an also-ran.

Al Klein wrote in message . ..
On 29 Jul 2003 08:40:59 -0700, (Shorty
Blackwell) posted in misc.invest.real-estate:

wrote in message . ..

Also its no guarantee
houses will go up in value; they can go down in value.

Not if you care for them, and if the neighborhood is sound...right?

All neighborhoods go in cycles. What's a slum today was once an
exclusive address, and what's an upper-class neighborhood today was
once woods.

Completely untrue. When do you think Beverly Hills will decline into a ghetto?

Mark

In article ,
Mark wrote:

Completely untrue. When do you think Beverly Hills will decline into a ghetto?


After the Revolution!


Dimitri

(Warren X) writes:

It sounds like your dispute depends on:

- Your current mortgage interest rate.
- The rate of appreciation on your current condo.
- Commission you'll have to pay when you sell it.
- Mortgage interest rate at the time when you buy "intermediate" house.
- The rate of appreciation on the "intermediate" house (which
may be quite different from that of a condo).
- The rate of appreciation on the "final" house (by the time you
are ready to "step up to it", it may already cost $2M ;-(
- The rate of return you could get on your investments if you do
not buy the "intermediate" house.
- The amount of money you can put aside now, and N years from now
(assuming you'll have a job, and will not have any major illness,
nor triplets ;-)

That's a lot of variables, many of which could only be guessed ...
Plug them into a spreadsheet, and play "what if" game ...

the market is at a high right now (area:
Toronto, Canada), and could conceivably "correct" in the next few
years once the glut of new homes are bought-up.

If there is a glut of new homes now, the correction will be *up*
when they are all bought-up and there is a shortage, not down.
Or am I missing something?

Cheers,
--
In order to understand recursion you must first understand recursion.

(Warren X) wrote in message

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.



If you're a multimillionaire and your wife can't live without a big
stinking house then that's one thing. But if you're just a working
stiff with no real *juice* and have to finance the big thing then your
a mere two clicks away from any other entitlement minded welfare
person.

Poor people imitating rich people ... yum yum yummy. This is the
exact mindset that keeps the foreclosure business humming.

Big hat ~ no cattle, now is that anyway to live? Don't forget to
plaster your office wall with a half dozen fake university degrees
while you're at it.

wrote in message . com...
(Warren X) wrote in message

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

Big hat ~ no cattle,
That is such a great phrase.
I've known so many high living people one missed credit card payment
away from a downward spiral into financial misery.
Speednxs

On 28-Jul-2003, (Speednxs) wrote:

I've known so many high living people one missed credit card payment
away from a downward spiral into financial misery

All depends on how you look at it. Screwing with the mind of the collectors
and getting them to settle on five cents on the dollar is just GOOD fun IMO.

On Tue, 29 Jul 2003 20:10:57 GMT, posted in
misc.invest.real-estate:

On 28-Jul-2003, (Speednxs) wrote:

I've known so many high living people one missed credit card payment
away from a downward spiral into financial misery

All depends on how you look at it. Screwing with the mind of the collectors
and getting them to settle on five cents on the dollar is just GOOD fun IMO.

Let us know when you've done more than read anarchist web sites.

In article ,
wrote:

If you're a multimillionaire and your wife can't live without a big
stinking house then that's one thing. But if you're just a working
stiff with no real *juice* and have to finance the big thing then your
a mere two clicks away from any other entitlement minded welfare
person.


As opposed to most homeowners who are...?


Poor people imitating rich people ... yum yum yummy. This is the
exact mindset that keeps the foreclosure business humming.


Unfortunately for the foreclosure business, very few homes are ever
foreclosed upon. Isn't the number around 1%?


Dimitri

(D. Gerasimatos) wrote in message news:bg407t$2eq7

a mere two clicks away from any other entitlement minded welfare
person.


As opposed to most homeowners who are...?


who are average ~

The average guy that buys an average house financed with an average
income is under some stress to meet his payment schedule. All I'm
saying is if one is fortunate enough to enjoy a higher than average
income, there is no reason to take on an uncomforable payment. I
personally know several multi-millionaires and none of them live in a
$800K house for which they could easily pay cash for.

While its sad to see an average family fall into foreclosure, it is
damn funny when the $1,000,000 homes are in default.

"The Millionaire Next Door" illustrates well the fact that wealthy
folks do not generally live in the most expensive homes. This task is
left to the lower income fools who wish to appear to be what they are
not. The book tracks well on my own observations, its a pretty good
*read* ~ check it out at your library.

The guy who strains to buy a big big house is the same guy that
started smoking at age 13 to appear *grown up*. If you happen to
believe in "life after this life" you realize its not about what we
have, its about who we are.


Poor people imitating rich people ... yum yum yummy. This is the
exact mindset that keeps the foreclosure business humming.


Unfortunately for the foreclosure business, very few homes are ever
foreclosed upon. Isn't the number around 1%?


If you abstract titles on the homes on the street where you live you
will likely find many of your neighbors homes were once in default.
Perhaps your 1% figure is ballpark per year but over time many many
homes fall into default. There are over 100 defaults per week
currently filed in my county which has a population of say 750,000.

Back when I employed $$$ partners, we snagged a 10,000 square foot
castle for one partner and an 8,000 sq ft home on 6 acres for the
other partner. If you are patient, you can acquire foreclosure homes
in about any neighborhood you want.

On 28 Jul 2003 21:59:19 -0700, someone wrote:


The guy who strains to buy a big big house...

There was nothing in OPs post to suggest he was straining to do
anything. There was something in OPs post indicating that he was NOT
living beyond his means. Rather, he indicated that he was living in a
$200k condo and putting extra payments on the mortgage there.

He was NOT asking if he SHOULD buy the $800k house some day, only
whether he should save up for it where he was, or follow "friend's"
advice to buy a $400k place NOW. I think "friend" is the one you
should be attacking.

What his Friend was telling him was to buy a $400k house, now,
claiming that this would 'help' him to get the $800k house sooner.

I see no indication that he won't be able to carry the $800k house
after he saves up the down payment by paying off his condo. I think
you are unjustifiably projecting someone else's sins on OP.

-v.

(v) wrote in message



The guy who strains to buy a big big house...

There was nothing in OPs post to suggest he was straining to do
anything. There was something in OPs post indicating that he was NOT
living beyond his means. Rather, he indicated that he was living in a
$200k condo and putting extra payments on the mortgage there.

He was NOT asking if he SHOULD buy the $800k house some day, only
whether he should save up for it where he was, or follow "friend's"
advice to buy a $400k place NOW. I think "friend" is the one you
should be attacking.

What his Friend was telling him was to buy a $400k house, now,
claiming that this would 'help' him to get the $800k house sooner.

I see no indication that he won't be able to carry the $800k house
after he saves up the down payment by paying off his condo. I think
you are unjustifiably projecting someone else's sins on OP.

-v.

Some cats have black spots.
Jax is a cat.
Therefore Jax has black spots.

... Ok, you caught me in a logic error and OP may be immersed in cash
BUT millions upon millions of folks in this country suffer self
imposed grief over money just because our society tells us at every
turn to spend, spend, spend SO MANY DO. Earlier this year my own
dentist told me (while sitting in his chair with interrogation lights
in my eyes) that I need to buy a bigger house. Why??? Our home is
6-bedrm 4-bath 3-car garage 3,300 sq ft with 4-whole people living
here. I looked up this dentist on the county mainframe to learn he
has two mortgages totaling a tad more than his home's value while my
little cottage has been debt free for over 10-years. So when dentists
and almost everyone else is suggesting we all super-size our spending,
perhaps my little squeeky voice calling for a bit of frugality isn't
such a major sin.

Sometimes the greatest financial blessing heaven can grant us, has to
do with not craving more and bigger stuff.

"Man's wants are insatiable but his resources are limited" ~ ECON 101.

Frugality is a survivable comfortable mindset, so what's in your
wallet?

On 29-Jul-2003, wrote:

If you happen to
believe in "life after this life" you realize its not about what we
have, its about who we are.

If you know about life after life you realize all you take with you is the
joy you experienced here. The rest just falls away. Live for today. NOW is
the only Reality.

On Tue, 29 Jul 2003 20:22:20 GMT, posted in
misc.invest.real-estate:

On 29-Jul-2003, wrote:

If you happen to
believe in "life after this life" you realize its not about what we
have, its about who we are.

If you know about life after life you realize all you take with you is the
joy you experienced here. The rest just falls away. Live for today. NOW is
the only Reality.

Whether you believe it or not, Baird, some people actually grow up.
You might just be lucky enough to have it happen to you.

wrote in message . com...


Poor people imitating rich people ... yum yum yummy. This is the
exact mindset that keeps the foreclosure business humming.

I hardly think he's in the poor house, since he's "upgrading from
[his] current $200K condominium apartment!" Ha ha!

On 28-Jul-2003, wrote:

Poor people imitating rich people ... yum yum yummy. This is the
exact mindset that keeps the foreclosure business humming.

That's where the "dream" in the American Dream comes from. My advise is, if
you are willing to work hard and be patient you can have it for real. If you
learn how to fill out a credit application you can have it until reality
catches up with you. If you want to get an idea if it's worth the effort,
try it the easy way, lose it all and start over. If you're sure it's worth
the effort do it the right way the first time.

It is no fun to buy or sell a house. Plus you can be stuck trying to sell a
home that no one wants to buy.

Wait until you are ready to buy the 800K house, then go for it.


"Warren X" wrote in message
Good day,

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

I said that we planned to stay in the condo as long as possible,
putting extra money down on the mortgage.

My friend said that we should move to an intermediate house of, say,
$400K, as it would provide more "financial leverage" that would be
required for the big house.

I argued that selling a home costs a lot of money in real-estate agent
commissions, legal fees, moving fees, renovation costs, etc.

He argued that the value of the houses increases at a rate that more
than compensates for these charges.

This is a possibility, but the market is at a high right now (area:
Toronto, Canada), and could conceivably "correct" in the next few
years once the glut of new homes are bought-up.

I also mentioned that a larger (intermediate) house begets larger P&I
payments, and larger interest payments mean a greater waste of money
that could otherwise have gone towards principal on my current
mortgage.

He then mentioned that the increase in value of property is
proportional to the size of the property (i.e., greater absolute
capital gain on a larger property than on a smaller one), to which I
must agree.

Can anyone offer any thoughts on this?

Thanks
A. Huahua

Thus said (Warren X):
A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

Does "one day" mean in three months, or three years, or thirty years?

I said that we planned to stay in the condo as long as possible,
putting extra money down on the mortgage.

My friend said that we should move to an intermediate house of, say,
$400K, as it would provide more "financial leverage" that would be
required for the big house.

If "one day" means "three years" then I agree with you, although you'll
still need a pretty darn healthy income to get that $800K house (which
will probably run more like $900K or so by then.)

If "one day" means "thirty years" then I agree with your friend,
although you should remember that in thirty years that 800K house will
cost somewhere between a few and several million.

Buying a big home just for the investment does not make any sense. Buy
what you really need; excess space that you don't need simply becomes
a liability. When weighing a home as an investment, you have to
consider the cost of insurance, interest, utility bills, repairs and
maintenance, all of which will be higher for a larger home. You have
to also factor in the extra furniture to fill the larger house, which
will actually depreciate in value. Also, a million dollar house is
less liquid than a smaller house. That has a definite cost attached to
it, as it may take a long time to sell the property. After considering
all of these, and if you are still making a profit, you have to decide
if that profit is significantly higher than other forms of
low-maintenance investments (such as mutual funds and bonds) to
warrant the extra hassles that come with maintaining a large home. I
really doubt that you can make a case for an expensive home as a
viable investment.

People find all sorts of excuses to justify their expensive purchases.
SUV's and golf club memberships have all been argued as investments.
Bottom line is, buy a big house because you like to live in it. If you
want to invest in real estate, stay in the current home, and buy a
rental property. As long as the rent payments cover the monthly
operating costs of the property, you will end up with a profit when
the property is eventually sold.



(Warren X) wrote in message . com...
Good day,

A friend and I had the following debate when I said that I would one
day like to buy an $800K house, upgrading from my current $200K
condominium apartment, and I would like to hear more opinions on the
matter.

I said that we planned to stay in the condo as long as possible,
putting extra money down on the mortgage.

My friend said that we should move to an intermediate house of, say,
$400K, as it would provide more "financial leverage" that would be
required for the big house.

I argued that selling a home costs a lot of money in real-estate agent
commissions, legal fees, moving fees, renovation costs, etc.

He argued that the value of the houses increases at a rate that more
than compensates for these charges.

This is a possibility, but the market is at a high right now (area:
Toronto, Canada), and could conceivably "correct" in the next few
years once the glut of new homes are bought-up.

I also mentioned that a larger (intermediate) house begets larger P&I
payments, and larger interest payments mean a greater waste of money
that could otherwise have gone towards principal on my current
mortgage.

He then mentioned that the increase in value of property is
proportional to the size of the property (i.e., greater absolute
capital gain on a larger property than on a smaller one), to which I
must agree.

Can anyone offer any thoughts on this?

Thanks
A. Huahua

"OP" here ...

Wow. I had no idea that my question would generate so many well-formed
answers and so much debate. Thanks to all.

Perhaps I should not have put any numbers, and instead just
percentages. I don't know if there's much of a difference between
going from $200K to $800K as there is from $40K to $160K. I wish it
were 40 to 160, but Toronto is not a cheap place to live.

While I do not feel I should have to justify to anyone my ability to
buy anything, at any price, the usenet is what it is, and people will
(rightly) have their say. FWIW, we are financially responsible,
"well-off" (but not rich, so let's say upper-middle class) people
that, over the long term, elect to spend our money on our home. I am
not into fast cars, frequent expensive restaurant meals, drugs,
sailboats, cottages or other bottomless money pits.

Obviously, an $800K house is not affordable right now (otherwise I
wouldn't have asked the question because I'd be in that house). But I
can dream! And maybe in 10 or 15 years, hard work will pay off.

There is obviously no clear-cut answer, but the information above is
excellent food for thought.

(Warren X) wrote in message . com...
"OP" here ...

Obviously, an $800K house is not affordable right now (otherwise I
wouldn't have asked the question because I'd be in that house). But I
can dream! And maybe in 10 or 15 years, hard work will pay off.



There is obviously no clear-cut answer, but the information above is
excellent food for thought.

In misc.consumers.house Warren X wrote:
I argued that selling a home costs a lot of money in real-estate agent
commissions, legal fees, moving fees, renovation costs, etc.

He argued that the value of the houses increases at a rate that more
than compensates for these charges.

The long answer:
I have found, like most things in life, that the answer is "it depends".

It is a good exercise to make a spreadsheet and plug a bunch of numbers
in and see what you get.

What I have generally found, assuming anything resembling historic
trends on such things as investment returns, housing value increase
rates, property tax rates around my area, US tax laws (I dont know if
Canada has similar tax breaks on home mortgage interest as the US
does..?), local tax rates, etc, is this:

Your home is an expense.

Buying can be a better choice than renting, and thus make a reasonable
"investment" choice, but, unlike other things we think of as
investments, buying more generally does not increase your wealth over
time, it decreases it. There's nothing wrong with choosing to take on
this expense, of course. It sounds from your other posts like you
understand this and will make this choice eyes wide open later on in
life.

There are, of course, exceptions, especially when unusual market or
income conditions arise. You said the toronto market is hot, so maybe
this is one of them. If, for example, housing apprecation far outstrips
the return on the opportunity cost (other investments) of the money
you're spending, I can rig up a scenario where a 400k house beats a 200k
house + investments over 10 years. But it takes some pretty
historically unusual circumstances to come out that way.

If you are at all numerically inclined, I encourage you not to take any
of our words about it, and run the numbers yourself. Make sure to
remember to include: mortgage, interest, taxes, PMI if applicable,
insurance, some estimate on insurance, homeowner/condo asscn fees if
applicable, opportunity cost of extra earlier spending (i.e. if your two
options are a $1500 payment, and a $2000 payment, if you took the lower
payment, would you invest the $500 diff? If so, that money will grow in
investments, etc), housing appreciation, capital gains tax if
appropriate, and..."transition" costs (closing on one more mortgage,
commission on selling one more home, one more set of
moving/painting/setup/prep-for-selling costs). Not all of these things
are knowable in advance of course, but if you put this all in a
spreadsheet you can play with the variables to see how the differences
play out.


Short answer:
unless things are really unusual there and they stay that way for 10+
years, you're almost certainly better off staying put until you are
ready to take on the 800k place (which will cost more later, as someone
else pointed out).

(Warren X) wrote in message . com...
Good day,

He then mentioned that the increase in value of property is
proportional to the size of the property (i.e., greater absolute
capital gain on a larger property than on a smaller one), to which I
must agree.

Can anyone offer any thoughts on this?

Thanks
A. Huahua

I'll be going through this exercise in several months or a year, when
I sell my two properties to upgrade to a nicer house. The real estate
market is as predictable as the stock market so don't take anything
for granted. People said that our local real estate would crash once
the market crashed in 2000, but it hasn't. Actually, homes north of
$1M have dropped more than the less expensive homes in the metro area
I live in. If someone who bought a $1.5M home in 2001, and someone
else bought a $500k home that year... guess what. The $1.5M home is
now worth $1.2 and the 500k home is worth 500k. Don't assume that all
homes in an area go up the same %.

Mark