If you're an established adult who owns a house and two cars, your assets have skyrocketted. You're having a great time.

how? can you capitalize on that upside somehow? sell them, live in a tent until prices are down?

Obviously most people can’t do this but a family member was recently approached by the dealer who sold him his most recent work truck. He’s driven like 30k miles on it in the past 2 years and it was a $75k Chevy diesel. Dealer offered him $90k to buy it back from him (to sell to someone else) and my family member said “Sure”. So he made $15k on an asset that should have lost 1/2 its value by now. Obviously rare and hard to take advantage of but some people are absolutely capitalizing on the weirdness.

I assume that in most situations like this the original person with the truck would have to replace that truck. In this case he now has to pay 90k for the truck he originally paid 75k for.

Perhaps, but it's not uncommon for these places buying new-off-the-lot high end trucks (my family members' included) to have a dozen+ vehicles at their disposal. He's planning on using his 5-year old similar HD truck until the market thaws a bit, but it's also overkill for most everything he does. One of the many work vans his business owns can likely do 95% of the work. They're mostly just buying the big ones for clout and due to generous tax writeoffs.

Or hobble along with a "free" $15k clunker until prices go back down.

But what does he drive now? If the truck was just a toy that didn't need replaced, then good for him. But that's not the case for the majority of people.

There are lot of construction workers driving around 20 year old trucks. Those who own a company and don't use the truck as a limo to show off to customers value the extra money in their pocket. The more the truck is abused, the older it will be (concrete and rocks are abusive to the body of trucks so those industries get the oldest ones)

You can pull out home equity in a cash out refinance. Borrow at 2.5%, then roll that into index funds averaging 8%, and turbo-charge your retirement goals.

"put it all on black!"

yeah. That might work out, but my investments are diversified more. I have real estate in the form of my house. I have stocks and bonds in my 401k. I have government in my social security. They are completely separate, so if any one fails I'm still okay. (well if the government fails I'm probably in trouble no matter what, but social security is limited at best)

Is this US real estate, US stocks, US bonds, and US social security? :-)

I've tried to diversify to more international mutual funds, but they also tend to have higher fees.

My 401k does have some international funds. While it is good to have a bit, they are as you say higher fees and so not always a good investment.

I'm not sure they are really diversification though. The major US companies have a lot of international exposure already so you don't gain much diversification. And of course they don't really protect you from a collapse of the US government (odds are either they are hit as well, or you can't prove you own them anymore)

You fret about not being able to trade up because everything is expensive, but at least you live without dread of housing affordability. Find satisfaction with your position. Try to find a way to leverage it for the sake of your children.

Heard of someone who sold while the real estate market here is superheated and plans to rent until it drops. Personally, I don't expect it to drop for a while yet (it hasn't really dropped for decades here).

HELOC's are very common. You can cash out on all that new home equity and install solar panels, build an extension, put in a pool....

That's assuming you have the cash-flow to float the new loan. If you bought the home 5+ years ago, that might be true, but for anybody who bought recently, that's probably not an option.

I capitalized on it by buying a new car and selling my old one. I sold a 3 year old camaro for $1000 less than I paid for it. I didn't get very much off MSRP of the new car, but I got way more value from a three year old camaro than I ever expected to get.

So... you got more for your used car and paid more for your new one.

Which is exactly the point being made by the parent comment that you can't capitalize on the upside. You'd have to sell and step out for a while.

What do you mean I can't capitalize on the upside?

Sure, my purchase costs went up some, but no where close to the additional value I got over normal for my sale. Put it this way, I paid a few hundred dollars, maybe a thousand dollars more for the car than I would normally, but I sold my old car for thousands more than I normally would have been able too.

That's capitalizing on the upside for sure.

Used cars used to be worth x% of a new car.

Today, they are worth x+y% of a new car.

If you trade up now, you will pay less for the new car than if you traded up two years ago.

Similar situation for houses. Even if we assume all houses have inflated by the same rate, you can still downsize and cash out. Your existing $600K house is inflated 25% and you can sell for $750k. You downsize to a $400k house which is inflated to $500k. You oversold for $150k, but only overpaid by $100k and you pocket the difference.

I bought another house and am renting the old one out. The new house has an interest rate at 2.3% while inflation is over 5% with conservative estimates.

Yeah they are not liquid assets… my concern is if one of my cars dies…

Trade it in. You'll still pay MSRP on the new car, but you will get way more for your trade in than it is worth.

The chasm between the lower class and even the middle class is widening by literally the week.