Purchasing a home to grow old in....

[Brett Sorenson]

Out of college (5 years ago) I "house-hacked" a duplex (Minneapolis) and it worked out great. I am closing on a second duplex in July and a SFH rental in July as well. My wife and I (both of us are CPAs) are beginning to plan on a single family purchase with the thoughts of raising a family there. With that being said we still want to look at it as an investment of sorts. In Minnesota plenty of suburbs have new SFM construction that can be purchased for 350-500k. Nice 3k sq ft "big box" houses that are great for raising a family....however there is still so much land that 15 years from now these houses will still be being built brand new ..and in my opinion that will inherently limit any potential appreciation for houses 10-20 years old. This had already happened in many of the burbs but another round of it will come a decade from now. So...we were debating purchasing a lakeshore property.. I wanted to get opinions on if I am missing something here. Obviously lake properties are more expensive however based on the current delinquencies in student loans and sub prime auto loans we see a recession coming. Would making a purchase like this help to "shelter" from a recession because the "McMansions" are theoretically hit the hardest when things go south. I am thinking that the long term appreciation (because of lake of inventory) will be far greater on a lake shore property. Any insight would be appreciated. Hopefully you enjoyed my ramble.

[Marc Jolicoeur]

In twenty years we will have 50% more population and cars.  The Met Coucil is not going to allow expansion of the metro due to high infrastructure costs (water treatment, sewers, roads).  Buildable land is actually quite limited.   The governments are going to want is to build up not out.

Current commute from a far out suburb might be a reasonable 30-40 minutes today but once that burb gets all of its lots filled with Mc Mansions, and those houses have teenagers, can you imagine how many cars will travel the same road?  The local cities will be forced to add traffic signals for the higher amounts of traffic and that just extends your daily commute.

The fact is that McMansions in the outer burbs are not a good investment.   Even if they do appreciate for a while with the overall market they will be hit hard during recessions, and last to re-appreciate due to the undesireability of the longer commute times.

I think your idea of a lakefront place makes a lot of sense versus buying tract homes.  However, if its far from the action and the jobs, future commute times could also be a major impact to these values long term.

I really like the suggestions of West Bloomington, Edina, or Kenwood.   Stay within 10 miles of 494/694 or you will go crazy on your daily drive.

Then again, self driving cars will probably make the commute more efficient and we may not even need to go the office anymore due to telecommuting.