[throwaway99951]

>What appreciating assets should people get in debt to buy?

You should go into debt to buy any assets that you know will appreciate at a rate greater than the interest you pay on debt incurred to finance them.

>Surely you aren't trying to label houses as appreciating assets.

Real rate of return on real estate is slightly positive in historical data.

[creepydata]

You absolutely can't "know" ahead of time what assets will appreciate at all, let alone their rate of appreciation. If you knew that for sure you'd be a guaranteed millionaire. Even if you say "real estate historically appreciates," most communities (esp small ones) are prompted up by 1-2 big employers or industries thus house prices in a community are not as secure as you might believe (see Detroit). Plus neighborhoods change over time. Plus you're ignoring the carrying cost of a property and the transfer costs.

However, a house can provide a lot of enjoyment so I am not advocating you don't buy one, just be realistic about what you are buying.

[throwaway99951]

>You absolutely can't "know" ahead of time what assets will appreciate at all, let alone their rate of appreciation.

Also, water is wet.

I "knew" when I bought corporate bonds paying 15% in 2008 that they would appreciate.

>house prices in a community are not as secure as you might believe

You're grabbing anecdata as evidence. I'm looking at the data. Yes, Detroit is bad. How about we look at Mountainview, too?

>Plus you're ignoring the carrying cost of a property and the transfer costs.

Real returns

[creepydata]

>I "knew" when I bought corporate bonds paying 15% in 2008 that they would appreciate.

No, you're ignoring the case where they might have defaulted.

The housing market oftentimes works in cycles and changes with time. In my life I've watched the neighborhood I grew up in go from highly desirable to highly undesirable and now it's back to being desirable again. 30 year mortgage is enough time to see wild swings in technology, the economy, industry, and plenty else.

These all effect housing prices. Dramatically sometimes.

Mountain View is currently dependent on the tech industry and the flow of VC capital to maintain housing prices. Another .com crash and Mountain View house prices will crash accordingly. "Silicon Valley" may even move to the South or something in 20 years.

Right now the neighborhood I currently live in is in a boom due to a large employer here heavily ramping up production and the associated influx of people moving here from other parts of the country for work. I don't really expect the sort of growth we are experiencing now to last in the long term but who knows what will happen.

There's always the unknown.

A house is a house, enjoy it, but don't count on making money on it.

[throwaway99951]

>No, you're ignoring the case where they might have defaulted.

How on earth do you know what I'm ignoring? I most certainly accounted for the fact that the companies could default.

>The housing market oftentimes works in cycles and changes with time. In my life I've watched the neighborhood I grew up in go from highly desirable to highly undesirable and now it's back to being desirable again. 30 year mortgage is enough time to see wild swings in technology, the economy, industry, and plenty else.

And yet, the long term real rates of return are positive (but small). You have your strategy, I have mine.

[creepydata]

I'm not sharing any sort of "strategy," (strategy for what?) I'm simply pointing out you can't predict the future, you can only make educated guesses.

[kijin]

> Real rate of return on real estate is slightly positive in historical data.

How does this rate of return compare to prevailing interest rates from the same period?

[derekp7]

If the house is your primary residence, you also have to factor in how much typical rent would be. In many cases, you are able to finance a house for lower monthly payments (principal, interest, taxes) than rent on an apartment.

[throwaway99951]

>How does this rate of return compare to prevailing interest rates from the same period?

Sometimes higher, sometimes lower, depending on a million variables. Does that surprise you?

[brewdad]

If there are a million different variables, how can you "know" anything about whether an asset will appreciate or not?