[Velorivox]

> If you pick a good location, buying a home is a fantastic purchase. It ties up that investment money in an asset that you can actually USE.

Also: It's a leveraged investment for most people (mortgage). If you put in 20% and your house tripled in value over the last ten years (which is what happened in SF & Seattle afaict), you make an annualized return of 27% (for a whopping 1070% total, i.e. more than 10x), after accounting for your payments (with realtor fees the number is slightly less but not meaningfully). Meanwhile as a renter your rent would likely have at least doubled over the same period, doubling the size of the nonrecoupable leak in your financial hull.

That's 1070% as opposed to 224%, i.e. 10x vs. 2x in the S&P. This is the reality of what has happened over the past 10 years, by the way, I am not using hypotheticals. Do note that home values tripling in price over the last decade is not common, even among these expensive cities, you have to be looking at specific types of housing in "luxury" neighborhoods.

TL;DR: Location matters. A LOT.

[ethbr1]

100%!

People underappreciate how valuable access to leverage can be in terms of boosting returns from a home. Putting 5% down, claiming the interest on taxes, and keeping 100% of the price appreciation is a solid deal.

Furthermore, since they're a hard asset, homes generally scale with inflation and thus serve as a hedge.

[DontchaKnowit]

I mean you can make any investment look great if you just make up the return.

What percentage of houses triples in value over 10 years? And home much are you spending in maintaining, insuring, and paying taxes in 10 years?

I think your point still stands but its not nearly as fabulous an investment as you are suggesting

[jrs235]

The home value didn't triple. Their equity did. Put $60,000 down on a $300,000 home. Live in it three years. Sell it for $540,000. Just made $240,000 in three years by investing $60,000. Granted there's also costs associated with carrying the home and mortgage one needs to count against the full profit and return.

[Velorivox]

> I think your point still stands

Thanks.

> its not nearly as fabulous an investment as you are suggesting

In case it wasn't clear, I'm not trying to give investment advice (my comment is very focused on what happened, not what will happen). I am however, implying that a lot of people made bad financial decisions by misapprehending their situation and consuming the wrong "content". I believe many people can be spared significant regret if they double-check, disbelieve, or replace much of what they’re told by the internet.