Quote:
Originally posted by Moneyguy1
sammy:
The only problem is, within your neighborhood, other houses have gone up 3 1/2 times inmarket value as well. So, buying another house in the same area is a wash. It still is a paper gain.
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Plus sammy is measuring trough to peak RE appreciation, which is misleading unless he plans to be a timer - sell his house right now and move out of CA or rent. Measure the S&P trough to peak over a 15 yr period and you get similar appreciation, with no carrying costs like maintenance, property tax, insurance, etc.
It is true, though, that with RE you can lever up 10:1 or more, and have tax benefits, which you can't do w/ stocks. But leverage works against you on the way down too.
In general I think RE is a good LT investment, but not so good that you can forget about cycles or take on crazy debt to buy it, which is what too many people did in the last few years.