I told my daughter not to buy real estate

I think the public deserves to know what we tell those nearest and dearest to us.  My girls are 20, 22 and 24.  My 24 year old has a 3 year old.  My 22 year old is pregnant.  I don’t recommend that either of them buy real estate right now.

Tina, my 24 year old, will finish school in November or so.  Then she’ll get a job in her chosen field.  Where will that be?  Anyone’s guess really.

Jacquie, my 22 year old is the one who wanted to buy a condo or townhouse with Peter here in Kirkland or somewhere on the Eastside.  Even though she will likely continue work in Seattle, she prefers living on the Eastside.  They can well afford to purchase, but I recommended against it.  Told her to rent for 6 – 12 months first.  Jacquie equals “Jacquie and Peter”.  To the best of my knowledge, Peter has only visited Seattle and has never lived here.  He has at least a year of school left in CA and is coming to spend the summer here with Jacquie, either in a rental or a place that they purchase.  Where is Peter going to work when he is finished school? 

If you don’t know where you are going to work, if you don’t have a good year at your current job so as to know if you are likely to stay working there, if you aren’t confident at the job you have right now and are thinking about leaving that job…don’t buy real estate.  Not unless you are prepared to hold it as a rental if you decide to move on.

Would I have counseled them differently in 2004 or even 2005?  Yes, I think I would have.

This entry was posted in General by ARDELL. Bookmark the permalink.


ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 33+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: ardelld@gmail.com cell: 206-910-1000

82 thoughts on “I told my daughter not to buy real estate

  1. My wife and I are just about 30, in the area less then a year, and ended up coming to a similar conclusion. I think this falls in the traditional vain of “If you don’t plan on staying for 5 -7 yeas, don’t buy.. you get eaten by transaction cost..”.

    Thanks for the Full Disclosure 🙂

  2. Ardell, I think this is an outstanding post. When I’m asked for my personal opinion, I’ll think about what I would advise on of my sisters (I’m the oldest of 3). When people are in a “transitional phase” there is nothing wrong with renting. What if Peter is crazy and decides he doesn’t like our rainy weather? 😉

    Now will your daughter and Peter take your advice?

  3. Thanks for sharing Ardell. For the “Put a gag on Chicken Little ” crowd out there I say this: If you feel like your job prevents you from making an honest living, change job. You live ones and living with a corrupt soul is a waste of the biggest gift you’ll ever get.

  4. Given what a seasoned agent Ardell is I’d guess that her advice has more to do with market conditions than the transitional aspect. I guess this since the advice in 2004 and 2005 could have been different and I’ve hard to believe that Ardell have learnt anything new about the area of transitions since then. Am I right Ardell?

  5. Well I’d give my own 24 year old daughter the same advice, but that’s because she can’t afford it! 😉

    What I did personally after the “August crisis” was increase my investment in real estate by buying a better home and selling the old one. The plans were in place before August, but even then I didn’t want to keep the old place. I didn’t want to have too much of my net worth tied up in real estate, but I didn’t mind having more of it tied up in real estate.

    But then, I’m now 50 years old, and plan on keeping this house at least 15 years. Different people have different circumstances.

  6. Hi ARDELL,

    Life is too flexible and filled with potential for most people in their 20’s to get tied down to a mortgage. There are a few people who truly “know” what they want out of life and can settle down early, but most need flexibility to move where life’s opportunities take them….

    I am glad they are gravitating to the Seattle area, and I hope their opportunities keep them here too!

    Smart “Mom” advice! 🙂

  7. Hi Ardell – I’d be interested what you would tell your relatives who were interested in buying local real estate as a short-term investment.

    It doesn’t matter if my clients are related to me or not, if they want my opinion, I give it to them straight up and I’ve been saying the same thing for over two years now …

  8. Deborah, you’re right. I bought my first house at 21. We sold it a year later for a move up house (the market was booming and the proceeds in 1 year gave us a nice down payment)…after a short while, my son’s Dad and I bought our “dream home” and not long after, we divorced…all by the time I was 27. What a whirl wind time it was…seems like a lifetime ago.

  9. Hi Rhonda,

    You were in the right place at the right time for it to work out financially like that! 🙂

    It’s funny how when you are 20something you think you what you want….but there is so much out there, that you can’t really know what it is that you really want.

    I took a long, long time to feel “settled” enough (mid 30’s) to want to buy a house! I once even rented a fridge (could not commit to buying one) for 5 years thinking I would only be at that 4-plex for a year or so before being transfered again!

  10. tj.

    AMEN to THAT!!! When I switched from being a Trust and Investment Officer back in 1990 to Real Estate, I had my doubts as to whether I could maintain my high ethical standards. I was lucky to have had a mentor who proved to me that while it wasn’t the norm, it WAS possible. Otherwise I wouldn’t have stayed in the business for 18 years. My 18 year Anniversary in Real Estate is June 1.

  11. Everett_Tom,

    Too busy to read the Article. I get an email with the subject line from Inman every time something new is posted and that “Put A Gag On Chicken Little” sounded like a personal attack 🙂

  12. tj, #6 (above response of for comment #4)

    All advice is based on a myriad of reasons. If my daughter had three children in school and two dogs and was moving here, I would find her something to buy that was a “safe” investment.

  13. Hair Farmer Joe. That WAS short term investment advice. NO 🙂 Again, if they had to buy for some reason, then I would find them a “safe” investment. One they could sell if they had to without loss. But anyone trying to MAKE money short term…well, good luck with that. Under the mattress might be a safer bet.

  14. Deborah, I would say it was thanks to good timing and our first home was financed FHA so it was very little down since the home cost peanuts. We bought in NE Tacoma even though I worked in downtown Seattle and would take the bus…but that’s what we could afford for our first home. I see so many people starting off with much bigger expectations for their first homes these days…I was happy just to have a place to call my own.

  15. Hi ARDELL – I think that was very sound advice based on her circumstances. My goodness, what if he gets up here and hates it for some reason (don’t know why…). If they had a firm 3-5 year plan, then I would say buy for sure as long as it isn’t a property that is extremely “specialized” as to appeal to a smaller group of buyers. Great topic and congrats on your anniversary (Marilyn Monroe’s Birthday I think..)!

  16. Rhonda, no kidding!! You said “I see so many people starting off with much bigger expectations for their first homes these days…I was happy just to have a place to call my own.”

    When did starting with something not so great become a bad idea? Many first time buyers insist on buying something so much better than what their own parents started with, and curl up their lower lip if they cannot get their ‘dream castle’ right off the bat.

    Did TV cause these expectations? It’s not just the internet, it’s deeper.

  17. Leanne, I’m not sure where it came from. Technically, I’m “Gen X”…so I really don’t know if it’s a generation thing or what. When I tell FTHB getting qualified that I settled for something less than perfect (meaning smaller or further out or not SFD) some really do “curl their lips”.

    I was proud. We had some work to do on the house and it paid off. I would say over the last few years, many FTHB wanted $400k. I did comp out my FIRST FEW HOMES and they’re still not selling at that…expectations raised AND FTHB could buy those types (more expensive) of homes due to the available financing. Back when I bought, I had FHA. Would I have bought more? Maybe…w/what I did w/credit cards in my early 20’s it’s VERY possible….but it would have to have been sold to me (agent or LO). I wasn’t thrilled w/our 900 sq ft 3 bed/1 ba (continental–two doors!) but I was thrilled at the end of my commute on the metro with a bag of title policies to review at home (O.T.) that it was ours and a starting point.

  18. Leanne wrote: “When did starting with something not so great become a bad idea? Many first time buyers insist on buying something so much better than what their own parents started with, and curl up their lower lip if they cannot get their ‘dream castle’ right off the bat.”

    It’s our consumer society. People want things that are new and better than what they need. Look at how frequently some people trade in cars or cell phones. Look at the increase in size over the years of both cars and houses.

    It’s actually sort of refreshing to find a buyer who isn’t into that mold. We on one recently where he found two houses he liked, same neighborhood. One was about 15 years newer than the other, have really nice hardwood floors and custom molding (I think the owner was a contractor because it was finished much nicer than other homes in the area). Our client picked the older home because it suited his needs and his payment would have been about $100 less a month. To him that $100 a month was more important that the hardwood floor and other features of the other house.

  19. It’s called evolution and wanting a better life got yourself and especially your kids. We can start off better than our parents due to their hard work to give us a better life, we’ll do the same for our kids. Technological and scientific progress is also contributing to make better products and services accessible to more people. Our parents, parents started with even less and so it goes back to the beginning of time unless there was a purge in form of plagues or war times or perhaps a housing bubble….Oups did I just say “Jehova”, let the stones begin to rain.

  20. To some extent it’s the expectation of increased value and income.

    When I bought my first house in 1982:

    1) It was better than any house my parents ever owned. Growing up poor helps diminish those expectations.

    2) It was the tail end of double digit inflation when interest rates felt like “half price” compared to the previous couple of years.

    3) During double digit inflation, my salary increased 33% in a 24 month period.

    4) My soon to be husband of the time (we bought in my name only while we were engaged due to his credit issues) was finishing up his Master’s Degree as a computer science engineer. Undergrad in Computer Science (on of the first under this “new” field) and Master’s in Engineering. So our future income expectations where bright.

    As I recall, my income at the time was about $25,000 and his was $17,000 and our mortgage payment was $385 a month. We were both salaried with no commission based income.

    My children on the other hand have always had nice homes and still don’t have their careers in line. They have school and jobs etc… I was well established and a bank officer by age 21. Started working at the bank straight out of high school and attende the Wharton School while working full time.

    Often I think the most go to college and not getting established in a career at 18 has hurt as many as it has helped. I grew up in the days of “specialized education” where you FIRST decided WHAT you wanted to be, by working. Then you went for elevated training in that field.

    Today they put the cart before the horse with college first and work second, without trying out their chosen field first. Many angry people with student loans and education in a field they didn’t “choose”.

  21. P.S. My daughter Andrea was on the news last night in L.A.!!!!!!! She’s the youngest. The 20 year old.

    Tattoo Artist.

    I believe in letting them BE what they truly love and want to do. I’m hoping there’s a link to the news story. They filmed her in Venice Beach giving a tattoo.

  22. I believe in letting my children be what they want to be.

    Tina loves what she has chosen as a field, medical, and so is getting top grades in everything and loving it.

    Jacquie loves accounting, no people interaction, just the numbers and the facts. She just got her old job back at a higher salary, coming back to Seattle.

    Andrea, the youngest, was on the news last night! Tattoo artist in Venice Beach

    When parents started PUSHING their children into what they thought they SHOULD do, including college, instead of letting them find what they LOVE to do…well, I think that was a sad day in history.

  23. This is an interesting topic, because it was just this week that I realized that the house we just bought is very similar to the house that my parents (mother and step-father) built when they were about my age. Their’s was a big rambler on a lake, while mine is a two story on a golf course, but other than that they’re very similar. Mine’s about 5 years newer, so they’re very close in age, which is a lot of what makes them so similar.

  24. I agree Ardell, I’m just saying that the notion that today’s youngster wants to much to early and comparing what we or our parents started with is pretty redicolous since it would reset one or two generations hard work. They want more because they can and they can because we and our anchestors enabled it because we wanted to.

  25. I don’t think there’s anything wrong with wanting more than what our parents had/have…I was a homeowner before my parents (they both still rent today). I feel very fortunate and I’ve worked hard for what we have. But I do see more “young buyers” wanting to bite off more than they can financially chew.

  26. tj,

    But that brings us back a couple of year’s when I freaked out on Mr. Having a Baby whining that his friends parents gave them a downpayment and his didn’t.

    You have to play with the cards you are dealt with and be realistic.

    Agents often set their clients up for failure by asking what their clients “WANT” right off the bat.

    I show them what they can afford first, then I say now go home and figure out what you WANT based on the realities of what you can afford that I have just shown you. The last one I recommended that they wait, rent a year at a low rent, save more and come back next year when prices may be lower and their ability to purchase better.

    That your ancestors intended or wanted to enable it…doesn’t mean all did. If you can afford more, great! But when you can’t…then get real and no whining!

  27. Rhonda said: “I don’t think there’s anything wrong with wanting more than what our parents had/have…”

    There is if their parents had A LOT. When I was in the trust business many of the children of the wealthy spent their lives depressed and feeling like failures. Sad but true.

    Kind of depends if your parents were second generation or first generation immigrants like mine. Easy for me to have more than they did or do to this day. But if you are Donald Trump’s kid or Bill Gate’s kid…good luck earning enought to have “more” than your parents. The goal of that is a terrible thing for a child.

  28. I think you got me wrong. I reject the tone that today’s buyers should fork out whatever money they have to buy whatever is available even if it’s a small little place in the sticks since that was good enough for earlier generations. A badly diguised self-interest attempt to get the market going. I absolutely 100% agree that you shouldn’t buy more than you can chew. But if ou earn good money and whine because you think prices are inflated and don;t want to accept living in the boonies you are right to whine. Prices are to inflated.

  29. If noone complained about issues we wouldn’t have a funtional democracy. If people just dealt with everything that are thrown at them it would be the equality of a nasty dictatorship where people are told to keep quite or else…I don’t think people are going to just accept $200 gas for example and just deal with it by cycling or walking. A little whining/protesting is not always as bad as it sounds. It can help making things better without resorting the violence ala revolts or terrorism. A bit extrme in the context but the fundamentals are the same, don;t be afraid to raise your voice if you see issues that can be fixed, keeping quite can be the larger crime.

  30. ok, first of all the real estate market never changes. people buy and sell real estate every day for reasons having to do with personal choices. the price stays the same. just because some one wants $850K for a property makes no difference; don’t pay it. you’re right why pay $200 a gallon for gas.
    there are fringes that make up a special segment that insist that the real estate market has ups and downs so based on that you, the consumer, need to react accordingly. it’s just baloney.
    real estate appreciates at a certain rate as a whole. there are always bargains, or over zealous buyers, but the core housing market is tied to inflation, Consumer Price Index, and the cost of money. Cost of money being last.
    real estate is a business. talking about schooling, children, or what my parents did has nothing, let me say that again, nothing, to do with business. if you want to rent go ahead. if you want to make money buy property.
    people talk about not having or wanting money like it’s a good thing. the fact is there is always plenty of money you just have to earn it. real estate, for all the bad mouthing, is a level playing field. anyone can buy, sell, and trade in real estate no matter what your color, country of origin, education, or religion. i tell my children to buy as much property as they can, as young as they can, and hold on to it forever.

  31. David,

    That sounds a lot like the position I took as in investment officer. I once had the accounts of two sisters who owned all private company stock of their father’s business. One day the Company was bought out by Monsanto (a carpet business) and they ended up with $8M apiece to invest in something other than “Dad’s company”. This was back when $8M was a whole lot more money than it is today.

    We bought some stock and some bonds. Was the market high at the time? Maybe. But we dollar-averaged in over a period of months or even years.

    I think if you are buying one house to live in, it’s not the same as an investment. Especially if you are young and not likely to hold it when you find the need to move. You can’t “dollar average in” if you are going to buy one and never hold more than one.

    Often one day you just have to up and sell it on a day you do not choose due to a divorce, change of job, etc… So while Real Estate is “a market”, each indiviudal in it does not always have “an investment” and is subject to the whims of the “changing” market.

    You can’t tell someone “first of all the real estate market never changes” when they can’t sell when they need to…because it did in fact…CHANGE since the time of purchase.

  32. I see no reason to whine at you Ardell, homes are mostly sold one at a time and the market changes when people one by one stop accepting to overpay in an overinflated market. You more than did your part by advicing the one transaction you did have some power over and then blog about it. So you can’t change it alone but you can be a part of driving change which you already are.

  33. Geez tj. I was recently asked by a person doing stucco repair on our home if “now” is the time to buy. It’s actually the first time I’ve been asked this during this market. I know nothing about him or his finances or goals…so I really couldn’t answer him at all without knowing his “story”. I think that’s what Ardell’s post is about…or at least, that’s what I take from it.

    If you “have to have” a house you’ve had your eye on, you’re going to make an offer.

    If you’re willing to lose a house over not getting it for x sales price, then you may not get it…but you’re willing to lose it.

    Every transaction is “one transaction”. Every person has their own story, their own goals and their own financial scenario. No two transactions are alike.

Leave a Reply