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Can You Really Climb the Equity Ladder?

Posted on March 1, 2010 by The Tim

I’m working on a post that explores the concept of the homebuying “equity ladder” (or “property ladder“), in which the lifetime buying plan of the typical American homebuyer is assumed to look like:


photo by Flickr user Atle Brunvoll
  • Buy a cheap starter home in your 20s. Maybe a little 2-bed house or a condo conversion.
  • 4-5 years later, sell and upgrade to a nice mid-range home, probably 3-4 beds with a back yard for the kids.
  • 5-10 years later, sell and upgrade again to some sort of McMansion, basically the house you wanted all along.
  • 20 or so years later, sell your McMansion and downsize to a hip urban condo, cashing out piles of equity to fund your retirement.

I’d like to hear your thoughts on this subject. What do the well-educated and streetwise readers of Seattle Bubble think of the concept of the equity ladder? Does it make sense (both in the Seattle area specifically and in a more general sense)? Is it the best way to play the home ownership game?

What say you?

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Checking Up on the “Forced Savings Plan” Myth
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Does anyone pursue actual home ownership anymore?

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