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Answers (5)
- hpvanc
- Contributions:2524
Bob Walters, chief economist of the online mortgage firm Quicken, is more optimistic. "You have to live somewhere," he says. "In three or four years, people will resume a normal course, and home values will continue to increase."
Let's remember that the normal course is appreciation at close to the inflation rate over time. That is with out factoring in the evolution of the typical home over time. When you factor in the improvements that have been added to the typical home (i.e. amenities and amenities that are now considered necessities), and the growth is size of the typical home, the real rate of return has probably been negative. So the only investment return will be the hedge against inflation, assuming we can get inflation restarted.
Let's remember that the normal course is appreciation at close to the inflation rate over time. That is with out factoring in the evolution of the typical home over time. When you factor in the improvements that have been added to the typical home (i.e. amenities and amenities that are now considered necessities), and the growth is size of the typical home, the real rate of return has probably been negative. So the only investment return will be the hedge against inflation, assuming we can get inflation restarted.
- Dunes....
- Contributions:3894
I think you would have to have some sort of agreed definition of "Wealth Builder" to have a discussion about was it or is it.
Do you mean the "Go ahead and buy because all RE appreciates?" or the "Get an ARM loan because it appreciates and you'll be able to refinance?", "I live in a $400,000 home I'm wealthy?"
or "It will appreciate and you can get an Equity Loan to buy that RV you want?".
Many of the "RE INVESTORS" I have met in my life were/are 2 bit millionaires...
25 cents in their Pocket and a million dollars on paper
Do you mean the "Go ahead and buy because all RE appreciates?" or the "Get an ARM loan because it appreciates and you'll be able to refinance?", "I live in a $400,000 home I'm wealthy?"
or "It will appreciate and you can get an Equity Loan to buy that RV you want?".
Many of the "RE INVESTORS" I have met in my life were/are 2 bit millionaires...
25 cents in their Pocket and a million dollars on paper
- broker_GRI
- Contributions:3454
*Now chuckling* at "investors who can can"
*men in business suits wearing the ruffled can can skirt dancing with $'s in their hands comes to mind :-)*
*men in business suits wearing the ruffled can can skirt dancing with $'s in their hands comes to mind :-)*
- broker_GRI
- Contributions:3454
I have a theory that something like this will happen again and probably again. Based on the fact that it has happened before and we (humane beings) seem to forget or discount the lesson.
Of course housing can be a wealth builder, so can stocks, long term saving, building a business, the lottery....
With potential gain comes potential loss...we were all optimistic for the gain, now let us realize without downplay and remember the potential for loss.
There are investors who can can take those risks while financially surviving and there are consumers who cannot.
Of course housing can be a wealth builder, so can stocks, long term saving, building a business, the lottery....
With potential gain comes potential loss...we were all optimistic for the gain, now let us realize without downplay and remember the potential for loss.
There are investors who can can take those risks while financially surviving and there are consumers who cannot.
- dacolan
- Contributions:1073
The housing market may stabilize, but some economists believe that real estate will never again be the investment it once was.
First, anything referenced from Realtor.org has suspect credibility.
Second, Yale economics professor Robert Shiller's research has documented the avg appreciation for the national residential RE market was less than 1% after adjusting for inflation for the 100 year period prior to the bubble. The housing market was never the investment the RE industry has led us to believe.
First, anything referenced from Realtor.org has suspect credibility.
Second, Yale economics professor Robert Shiller's research has documented the avg appreciation for the national residential RE market was less than 1% after adjusting for inflation for the 100 year period prior to the bubble. The housing market was never the investment the RE industry has led us to believe.
Housing to Be Wealth Builder?
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- 5.0/5.0
- (26 reviews)
Contributions:112The housing market may stabilize, but some economists believe that real estate will never again be the investment it once was.
Stan Humphries, chief economist for Zillow.com, predicts that in the future housing values will only keep up with inflation. "All those theories advanced during the boom about why housing is special ? that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land ? didn't hold up."
Dean Baker, co-director of the Center for Economic and Policy Research, says it will take 20 years for the market to recover the $6 trillion lost since 2005 and values will never catch up.
Bob Walters, chief economist of the online mortgage firm Quicken, is more optimistic. "You have to live somewhere," he says. "In three or four years, people will resume a normal course, and home values will continue to increase."
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