Re:Economic Pessimism Growing in U.S.
by baskethead on Tuesday May 31, 2022 @03:43PM
(#31573968)
Homes have been going up in price for far longer than 40 years. The only time they have dropped is the Great Depression and the Great Recession. Otherwise there isn't an asset class that is more reliable over the long haul than real estate.
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Re:Economic Pessimism Growing in U.S.
by ChuckNorris89 on Tuesday May 31, 2022 @04:00PM
(#31574198)
>Homes have been going up in price for far longer than 40 years.
Homes going up is not the problem though. Yes, they've been going up for longer than 40 years, but back in the 1950's their growth was basically tracking inflation and wage growth, or even going down in value since they were seen an any other depreciable asset, just a place to live in till you die.
It's in the last 40 years that housing massively outgrown wages, as it became a speculatory investment vehicle instead of just being a place to live, plus the introduction of NIMBYISM regulations to restrict supply, and that's where the issue is.
I strongly disagree with this. First off homes fell sharply in value just as recently as 2009. Secondly over time, globally, real estate barely keeps ahead of inflation. About 3% per year. For much of the last century you did about as well parking your money in a savings account. Finally, equities in globally have returned about 6.5% per year. That's much better. Better still in the US where they did more like 10.5%. Real estate as an appreciating asset is a lousy investment. If it's a place to live that's sometimes a different matter. If it's a rental property that's also different.
I think 2009 counts as part of the Great Recession.