Owning a house.

[BradleyT]

Well if you include 115 years of property taxes + maintenance the chart would probably be close to breakeven.

[TheMetetron]

[ QUOTE ]
Well if you include 115 years of property taxes + maintenance the chart would probably be close to breakeven.

[/ QUOTE ]

So after 110 years it has doubled. And all of that is the last 10 years before which it simply went up 10% after 100 years. Are you trying to make my point for me?

Also, that doesn't include any of the costs (interest, property tax, maintenance - because homes don't last forever) in that graph.

[scotchnrocks]

[ QUOTE ]

Yeah because with a house you're going to pay $200K in interest rather than a few K on a car or credit cards. Obviously you didn't get my point whatsoever which is that the bank wins when it's all said and done.

[/ QUOTE ]

True that the bank always wins, but so do intelligent home buyers. Tons of people made out like bandits in the recent real estate run up. When the market goes up, leveraged homeowners sell out and wait for the next rush. And like I said earlier, if you're a savvy buyer and choose good locations you stand to do a lot better than the average IMO. Whether right now is the time to buy is based on your local variables.

RE: the graph of home price vs. inflation. As stated in a previous post, that graph is very questionable because of different sizes of houses it's comparing etc. Search the forum it wasn't too long ago. Even if the graph is pretty close to accurate, it would be pretty easy to identify good times to sell and make the most out of it. If I buy a $400k house in 1999 and I know I can get $750-800k for it in 2004, isn't it obviously time to sell?

[bwana devil]

[ QUOTE ]


Results oriented-thinking about the short-term. Long-term houses appreciate at almost exactly the rate of inflation. And there are costs that go along with this (interest, taxes, maintenance, etc). Sure, you are leveraged so that can help, but it is often a much better idea to put that money elsewhere and rent.

[/ QUOTE ]

in a typical market, a house appreciates about 8% every year or another way to think about it is it doubles in value every 10 years. that does much better than inflation.

regarding leveraging, my current house i used about $8,000 and bought the house under market value for $125,000. in four years it has done exceptionally well due to various market conditions and i expect to sell it for around $250,000 this summer. after broker fees i expect to net a bit over $100,000. not bad for an $8,000 purchase four years ago.

you may not like the occasional headaches that go along w/ owning but it's hard to argue w/ the numbers.

[prohornblower]

[ QUOTE ]

So after 110 years it has doubled. Are you trying to make my point for me?


[/ QUOTE ]

That's what I was thinking. This chart actually looks way worse than what I thought the housing market yields. He made your point, and then some.

[TheMetetron]

[ QUOTE ]
[ QUOTE ]


Results oriented-thinking about the short-term. Long-term houses appreciate at almost exactly the rate of inflation. And there are costs that go along with this (interest, taxes, maintenance, etc). Sure, you are leveraged so that can help, but it is often a much better idea to put that money elsewhere and rent.

[/ QUOTE ]

in a typical market, a house appreciates about 8% every year or another way to think about it is it doubles in value every 10 years. that does much better than inflation.

[/ QUOTE ]

Where did you get this from? Back up your stats please. The graph posted disagrees with you.

[TheMetetron]

[ QUOTE ]
regarding leveraging, my current house i used about $8,000 and bought the house under market value for $125,000. in four years it has done exceptionally well due to various market conditions and i expect to sell it for around $250,000 this summer. after broker fees i expect to net a bit over $100,000. not bad for an $8,000 purchase four years ago.

you may not like the occasional headaches that go along w/ owning but it's hard to argue w/ the numbers.

[/ QUOTE ]

You are posting incredibly short term results where the real estate market has done abnormally well. This is not even remotely typically and I'm actually pretty surprised that so many people think this way in this forum.

[TheMetetron]

[ QUOTE ]
[ QUOTE ]

So after 110 years it has doubled. Are you trying to make my point for me?


[/ QUOTE ]

That's what I was thinking. This chart actually looks way worse than what I thought the housing market yields. He made your point, and then some.

[/ QUOTE ]

Yeah I'm not so sure what the point was. I understand it is inflation-adjusted, but I can come up with a ton of investments with much better inflation-adjusted returns.

[SurferEd]

[ QUOTE ]
[ QUOTE ]


Results oriented-thinking about the short-term. Long-term houses appreciate at almost exactly the rate of inflation. And there are costs that go along with this (interest, taxes, maintenance, etc). Sure, you are leveraged so that can help, but it is often a much better idea to put that money elsewhere and rent.

[/ QUOTE ]


you may not like the occasional headaches that go along w/ owning but it's hard to argue w/ the numbers.

[/ QUOTE ]

It's also a quality of life issue. Owning your own home is almost always an upgrade to your quality of life.

[scotchnrocks]

[ QUOTE ]
Where did you get this from? Back up your stats please. The graph posted disagrees with you.

[/ QUOTE ]

That graph is almost useless IMO and it was made to get the result that the author wanted. However, the trends that it shows are real and clearly point out to the reader that buying low and selling high works.

While renting is likely the best thing to do right now depending on your location, keep your eyes open for good foreclosure deals or motivated seller's who are down on their luck and need to sell. That's an easy way to win at real estate if you're smart and do some research.