111–120 of 194 posts
The problem with this argument is rent. If you can buy a house (to live in) without a mortgage, or with a very low rate, you not only reap the capital gain, but save on paying someone else rent.
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Pretty much every capital asset depreciates. Even with basic maintenance everything wears out over time. Only legal entities are immune from the ravages of time.
My house was built in 1650 and doesn’t take much maintenance at all. Definitely not more than the equivalent in rent I’d pay for it.
I don't think your house is representative of the US housing market. I once lived in an apartment in a 17th century masonry building in Alsace, and it didn't seem to give my landlord nearly as much grief as my parents' 1960s-era suburban home in Houston did to them.
Whoever wrote this doesn't really understand what they're talking about. Side note: this is written in 2019. Can we update the title? First, terminology. "Flipping" houses has a completely different meaning. The author mentions buying a house and "flipping" it 5 years later. That's not what flipping is. Flipping is short-term and typically means rehabing a property. Done quickly, you can make a profit on this if you'…
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Property taxes,income taxes, fuel taxes, high utilities costs all limit growth of prices in blue states.
On the flip side, "red" states are seeing rapid population growth from climate and economic migration, so inflation is high for low wage earners in the low cost of living areas. We're probably going to see a smaller range in costs between LCOL and MCOL than we have recently.
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> House prices were bounded by wages and were understood to be depreciating assets. When was this ever true? If you literally abandoned a house and let it rot then yeah maybe in ten years it will have lost value because it will need a lot of work, but other than that I think it's never been the case they're depreciating in any meaningful sense.
Take just the roof alone. On a typical house roof replacement is at least a few thousand dollars and for a nice house in an urban area it will cost at least ten thousand and maybe much more. Even with good materials and installation roofs stay in good condition for around 30 years and become completely degraded in around 50. Some napkin math for a common and kind scenario is another $10k roof every 30 years which is…
I think it will be more interesting with "basic structure integrity" at the century scales. Do we really know economic impacts when tract housing/wood structures are tested well? I'm thinking past time scale of the electric and plumbing overhauls at the 50-100 year marks. There is a ton of housing out there that is less than a century old.
You can make money flipping houses. However it becomes a job and you need to treat it like one. You have to invest in the right house, a house that only needs paint and it will sell for a thousand profit vs a house that needs to have the main beams replaced to get $50000 profit. The above numbers are real required profit because of the risk you are taking, and also the time that you own the house paying intrest waiti…
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My house was built in 1650 and doesn’t take much maintenance at all. Definitely not more than the equivalent in rent I’d pay for it.
> 1650 I don't think your house is representative of the US housing market. I once lived in an apartment in a 17th century masonry building in Alsace, and it didn't seem to give my landlord nearly as much grief as my parents' 1960s-era suburban home in Houston did to them.
“Between 2006, the peak of the previous housing bubble, and 2019, average home prices have increased just 13%, according to the S&P/Case-Shiller Home Price Index. In that same time period, the S&P 500 rose 125%. In other words, stocks did 10 times better than real estate” I can’t take an article seriously when it purposefully ignores what’s happened in the last three years because it negates the point it’s trying to…
The problem with this argument is rent. If you can buy a house (to live in) without a mortgage, or with a very low rate, you not only reap the capital gain, but save on paying someone else rent.
Earlier quoted context omitted.
Pretty much every capital asset depreciates. Even with basic maintenance everything wears out over time. Only legal entities are immune from the ravages of time.
> Even with basic maintenance everything wears out over time. There's basic ongoing maintenance yeah, but I don't think that counts as deprecation in any sensible way does it? If you keep your oil paintings in a mouldy cupboard they'll rot, but we don't say art is a deprecating asset because of this. You just make sure they don't rot and clean them every now and again. Houses can stand for hundreds and hundreds of ye…
The house fundamentally is in a "moldy cupboard". Its entire purpose is to provide shelter from the "mold".