2
0

Real home prices may decline for the next 30 years


               
2014 May 4, 10:05am   16,457 views  61 comments

by John Bailo   follow (0)  

Here's Why Your Home Is Not A Good Investment

Shiller also mentions that certain homes go out of style over time, dragging down prices. "What kind of houses will they be building in 20 years?" he wonders aloud. "They may have lots of new amenities. They will be computerized or something in some way that we can't anticipate now. So people won't want these old homes."

His animation peaked with a line I'll never forget.

"To me, the idea that buying a home is such a great idea is just wrong. They may very well decline for the next 30 years in real terms."

http://www.fool.com/investing/general/2014/05/02/the-uncomfortable-reason-your-home-is-not-a-great.aspx#ixzz30nLMxkJd

« First        Comments 58 - 61 of 61        Search these comments

58   corntrollio   @   2014 May 9, 4:05am  

Tim Aurora says

On top of it I get the appreciation ( tax free till 500K). Assuming that to equal to inflation, it is equivalent to 30% return ( 18% + 4*3% ) after tax. This translates to 41% return before tax.

That's some fuzzy math there.

59   clambo   @   2014 May 9, 4:20am  

Sorry to snark Tim above, I have nothing against what he does with his money if it suits him.

But in 2009 I bought some Apple shares and unlike buying a house ($10K fees) I paid a $2 broker commission at Vanguard.

This investment is up about 600% but of course this is unusually good.

The frosting on the cake is that Apple now pays $1+ per share per month in dividends. If I live long enough, Apple will have paid me back all of my original investment!

Oh and I have no "property tax" on this but I do owe tax on the dividends except for the shares I have in my Roth IRA.
Below a certain income the dividends aren't taxed.

I won't have to fix the roof of my Apple shares, nor buy insurance for them.

Other investments in mutual funds are doing great and the nice thing is that they are very liquid and you can sell a share or two if you need some dough.

I suggest Vanguard Dividend Growth among other funds.

60   bubblesitter   @   2014 May 9, 4:39am  

corntrollio says

That's some fuzzy math there.

Can't get fuzzier than that.

61   bg   @   2014 May 9, 10:46pm  

P N Dr Lo R says

the 1930 built house in Forest Hills at 8122 Santa Clara Dr

That is my neighborhood. I actually grew up in Lakewood which is nearby. My best friend's parents still live about 2 blocks down on Santa Clara. FWIW, their house is falling down. We are trying to get them to move this year to a house that will be better as they age. THe house will certainly be a tear down that is replaced by a Mc Mansion.

« First        Comments 58 - 61 of 61        Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   users   suggestions   gaiste