[squiffy]

If your premises are correct, then long-term it should be a good buy.

In the short term, you could see your prices drop as interest rates rise. But over 20 years, you will probably be way ahead having bought the condo.

Now if you buy a condo that was poorly built and has tremendous construction problems. All bets are off. Or if you are wrong that the neighborhood is up and coming, you could lose value.

But overall, in a crowded urban area where everyone wants to live and there is just no more land to build, over time prices will go up a lot. History bears this out. NYC, SFO, CHICAGO, LA, HONOLULU, TOKYO, HONG KONG. If it's a major city where people want to live, or have to live, land, over the long run, is a goldmine. Period.

Unless someone explodes a dirty nuclear device there, the land will probably be worth a lot more in 20 years. In NYC or nearby, land does not just keep pace with inflation, it generally will keep you way ahead of inflation.

But also remember that it's kind of like a forced savings plan and much of your wealth will be on paper and not necessarily easy to tap. So in the meantime, you will feel cash poor and may not have as much fun. But at least you will die richer.

A good plan would be to sell when you are ready to retire and when prices look like they have peaked, and then move someplace cheaper. Otherwise how do you cash out and benefit from the equity you have built.

And if you think you might die at age 50 of a heart attack, then you may not want to be saving so much for the future.

But if you plan to live to 75 or 80, then think long term.