Your fertility rate math is off - it might be 3.25 grandchildren/grandparent, but each grandchild has 4 grandparents (barring edge-cases like incest or remarriage). If you account for property typically being owned by couples, it's only 2 grandcouples, but this is offset by your spouse having 2 grandcouples as well. As long as fertility rate < 2, wealth actually accumulates during inheritance.

Your comment about timing is right-on though: most couples are expected to have the house & kid before the grandparents die.