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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (63530)	10/8/2006 8:57:41 PM
From: XoFruitCake	Read Replies (1) \| Respond to of 306849

"Building equity has its own benefits" I think if I re-pharse what you said in a different context, you will understand why some of us thinking house as an investmetn. "continue to contribute to 401K has its own benefits, even if the investment lose money every year" of course we all know that we won't agree with the statement about the 401K. So why is building equity in a house so special and we don't have to worry if the house provide a positive return or not? We invest money in the house and we hope that by the time we sell the house, we will have more in our pocket. The difference between cost of ownership and rent are the investment we place on the house. For many people, it is the biggest and most leveraged investment they will ever make in their life. They also sign up for a commitment to pay the mortgage for 15-30 years of their life. Why shouldn't people question whether owning a house will give them a better return within their time frame? None of us know the depth of length of this coming housing slump. So selling a house here or buying a house here are all reasonable decision based on one's outlook on the local housing market and the deal that they can make. The only objection I have is people preaching faith based investing in housing, making buying housing sound like a no-lose situation. In reality is not true and a lot of people who purchased house in the last 2-3 years and has to sell now just find out that it can easily whip off all their net worth if they get the market wrong. May be you can explain to those folk how building equity in their house in the last 2-3 years has its own benefit.