If you had only bought that house in 1890, you’d have made a nice 14% real return over the last 123 years. Housing as an investment has sure turned out well. Do you realize that it costs approximately 10% of your houses value per year to maintain it (mortgage, property taxes, utilities, repairs)? Never has a one chart revealed so much. The ignorant masses have no clue what Federal Reserve created inflation has done to their lives. Look at that housing recovery. It sure is a doozy.
Home Prices Are Back… To 1894′s Levels
Submitted by Tyler Durden on 02/13/2013 22:14 -0500
Six years after the onset of the traumatic US housing crisis, the optics are there that suggest a stabilization is occurring. Whether real or manufactured by record-low foreclosures, bank supply withdrawals, and fed-subsidized cash REO-to-rent trades, the sad truth is that jobs (and the GDP-enhancing multiplier effect that they create) are just not coming. Even Bob Shiller prefers the potential for 4% gains in stocks over housing risk in the medium-term as he points out that – inflation-adjusted – house prices are back at levels first seen in 1894… now that is a long-term investor.
Source: Goldman Sachs