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
ThePessimisticChemist says:
The good news is that any home value loss will be a fairly insubstantial hit for us.
Yay for living beneath our means!
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14th February 2013 at 8:52 am
Stucky says:
The house you live in is a HOME ……. NOT ever an “investment”.
Take it or leave it, that’s the best advice I have.
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14th February 2013 at 9:17 am
ThePessimisticChemist says:
@Stucky – Thats pretty much how we viewed it. It turned out to be a smart deal anyways, as even a decent apartment in this town costs more than what we pay per month for this house.
Rental homes are even worse. I know people with 1/3 the financial means of me and my wife, yet their rent is larger than our house payment by 50%.
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14th February 2013 at 9:21 am
IndenturedServant says:
Stucky says:
“The house you live in is a HOME ……. NOT ever an “investment”.”
I suppose it’s a matter of semantics but I look at my house as an investment in my own future. It reduces my current living expenses and if all goes well, it will greatly reduce my future living expenses while simultaneously allowing me to more than double my savings/retirement investing. Fortunately, I have enough knowledge and skills to make any needed repairs to my own home and I consider that knowledge and skill another investment that reduces expenses.
I wonder how many people my age who are now waking up wish they had skipped college (like me) and acquired some real world skills that can be used anywhere? I have never looked at the path my life has taken with an ounce of regret or wish for things having been different. In hindsight, it’s almost as if most of my conscious decisions in life have prepared me to weather what is now unfolding. How or why I managed to avoid falling for the quick, superficial veneer of “success” versus the slow, unrelenting effort of lasting success always amazes me. The funny part is, I’ll bet most who meet me would consider me to be FSA based on appearance and the car I drive.
I_S
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14th February 2013 at 12:23 pm
Administrator says:
Indentured Servant
We would never consider you a member of the FSA just because you drive this.
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14th February 2013 at 12:51 pm
BUCKHED says:
A friend recently had a celebration at his home…he just paid off the mortgage. He was soo happy. “Now” he declared to everyone, “I own this place”. I told him ” No you don’t the government owns the place…you have the deed but the local government owns it “.” I don’t think so”, he said,”yep” I said “they do…don’t pay your property taxes and you’ll find out who truly owns this house” !
Good thing he wasn’t drunk…he might have asked me to leave .
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14th February 2013 at 1:03 pm
Eddie says:
I S says
“I’ll bet most who meet me would consider me to be FSA based on appearance and the car I drive.”
You drive an Escalade with 20 inch blades?
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14th February 2013 at 1:42 pm