Financially, it may make sense to sell high (an appreciated residence) and buy low (stocks that have been clawed by the bear market). In reality, though, that may be hard to do. It’s emotionally difficult for people to take money from a house and put it into stocks. Moreover, you still have to live somewhere so you’ll probably be forced to downsize after selling your house and investing some of the gains, which might not appeal to you.
Nevertheless, there may be opportunities for fitting an appreciated residence into a financial plan. Say you’re expecting to retire at 65, with a house worth $500,000. At age 80, you might consider moving into a less expensive but easier to maintain house.
You can project a sale at that age. After recognizing the need to purchase or rent another home, the anticipated sales proceeds can be factored into future cash flow. That can make a difference as to when you anticipate becoming financially independent and able to retire.