The story you posted probably does sound like a dream scenario for some people, but you have to be very lucky and stumble into the opportunity. The odds of a young person buying in a cool market, then watching their equity explode in ten years as the market turns red-hot, and then cashing out to live the good life... are very slim.
Even if you *were* sitting on a mountain of equity that you could cash out tax-free (married couples get 500k tax-free gain on the sale of their primary home, single people get 250k), you'd still need to be willing to relocate far away, and many people have things preventing them from doing that.
I can actually use my brother's neighborhood as an example. In 2021, he bought a very modest house in an area of Los Angeles county that was clearly working class (mostly 3 bedrooms, all built before 1950), but since it's LA, these simple homes are still worth like 900k now. When I look around his street, I notice that all of his neighbors are normal blue-collar folks who bought these homes decades ago, when it was affordable for average-income earners to actually do that. They're now sitting on mountains of equity, yet hardly any of them move out.
All the areas around them have grown more expensive too, so like you said, they'd have to move to completely new places at this stage of their life. Also, their grown children, who usually live with them because they are priced out of getting their own places, would be totally screwed. So you have situations where the house is worth a million bucks, but it's a cluttered piece of crap with multiple generations living inside and like five cars parked outside.
They could move to the country buy a house and acreage for a 3rd of that equity and have 600k left
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I was born when she kissed me. I died when she left me. I lived a few weeks while she loved me-