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Shiller explains why owner-occupied housing is a poor investment


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2013 Feb 7, 11:23pm   63,156 views  127 comments

by golfplan18   ➕follow (1)   💰tip   ignore  

http://ochousingnews.com/news/shiller-explains-why-owner-occupied-housing-is-a-poor-investment?source=Patrick.net

Despite the fact that house prices crashed, wiped out millions of loanowners, and wiped out the illusory equity of an entire generation, people persist in believing owner-occupied housing is a good investment. Most people believe house prices appreciate 5% to 10% or more each year and by simply owning real estate they can become wealthy. It doesn’t work that way. Over the long term, house values increase with wage inflation as buyers bid up prices with their increasing incomes. An amortizing loan is a forced savings account — assuming the owner doesn’t refinance or HELOC this money out and piss...

#housing

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126   jahstah   2017 Jul 31, 1:17pm  

This will be debated until the end of time. In my experience, purchasing an owner occupied home has been a great investment for me, so far. I got lucky and purchased at the exact right time and have gained about $200k in appreciation on a $229k purchase. My monthly payments (including HOA, taxes, insurance) are about $800-900 less than what I could rent the property for. Had I been renting over this same time period my rent would most likely have been increasing every year or two.

Yes, you can get screwed financially with an owner occupied property purchase if you have to sell unexpectedly and can't ride out the current real estate cycle.

127   Dan8267   2017 Jul 31, 2:09pm  

Damn, resurrecting a thread from four years ago? There should be a PatNet classic tab.

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