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> I'm not blaming the victim, I'm appealing for a more nuanced viewpoint than "fuck Wall St." I think we can amicably disagree. I'm not in the "fuck Wall St."

> I'm not blaming the victim, I'm appealing for a more nuanced viewpoint than "fuck Wall St." I think we can amicably disagree. I'm not in the "fuck Wall St." camp. I understand what it is supposed to do and the value it is supposed to provide. > Maybe I'm wrong and I'm one of the lucky, shrinking few who still has this option, the option of mobility than once made the US great? Because I'm young and employable? Yes. You have the option of mobility because you're young and employable. Probably just because you're employable. The average person has horrible job prospects where they are. Moving into uncertainty of even worse job prospects probably isn't a realistic option. I think most people would try to make it work with the job they have (and get stuck with rents because of it), than leave their job and possibly not be able to find one where they move (and to have spent money moving). > Also, if a homeowner considers their home an "investment" that means they should be willing to liquidate that investment at some point when it makes financial sense to do so. People get sentimentally attached to their homes, which is not true of most "good" (read: fungible/liquid) investments. I'll go ahead and say this. Your home is NEVER an investment. A house that you own, maybe. But, I repeat, your home is never an investment. > We're definitely both against fraud, but unfortunately these government programs that make life better for some by subsidizing mortgages, home renovations, tuitions, etc. can and will always be gamed by unscrupulous individuals. Question is - is the payoff to society (higher homeownership, literacy, energy efficiency) worth it? I agree here, but I think the better question is, "When the unscrupulous individuals form a large, easily identifiable group, why sit idle and do nothing?"

roymurdock 10y ago
Yeah I think we're in agreement in general, just coming at this issue from different perspectives. I'd like to see things changing on the consumer side as well as the gov/regulation side described in the article: Riverside County, Calif., has opened an investigation into marketing practices for PACE loans, and California Gov. Jerry Brown signed into law in September new requirements establishing uniform disclosures for PACE loans, an effort to make lending terms closer to those for mortgages. Homeowners who get a PACE loan now have three days to back out. The largest PACE lender, Renovate America Inc., is accused in three lawsuits filed in November by borrowers of double-charging interest and administrative fees and failing to immediately credit loan payments. The suits seek class-action status. The company denies the allegations and says it will “defend PACE, our company and the program vigorously.” In November, the Energy Department urged administrators of the loan programs to clearly explain loan costs and other terms, allow borrowers to cancel their loan during a short period and deter kickbacks to contractors. It would be nice to be able to trust financial institutions/loan originators, have them explain things to consumers in easy-to-understand and fair ways, and have some type of more personal relationship than we have now with those who provide us with places to save/borrow money.
SubuSS 10y ago
>Your home is NEVER and investment. A house that you own, maybe. But, I repeat, your home is never an investment. Can you expand a bit more on this? Usually it might not directly turn into an investment, but it does act as a 'savings vehicle' in many cases. For example when I moved to US a long time ago, the choice was between a 1200 rent and a 1600 mortgage (assuming I put a down of 25k or so). At that point it felt like a very reasonable investment and the market worked out afterwards where in it turned in a great ROI. If it wasn't for that move, I would've still been pissing off money in rent. Also the actual investment options today are not as cut and dry as it seems either: There is no real 'assured' gain anywhere even though I do see the 3.5-6% returns number touted in the reddit personal finance circles. In the long term, I would ideally split money between these, not eschew home as an investment vehicle. With the right amount of thought and reasonable location choices, it can indeed turn out into a great investment. This is not to ignore the risks people take by overextending themselves / doing 'home flipping' but to each their own.
- chillingeffect 10y ago
  It's an illiquid investment that appreciates at a rate that varies in conjunction with inflation. You might win or lose, but it's tough to predict, varies with geographical area and in relation to inflation and wages. There are many graphs that show aspects of this, here is one useful one I found: http://lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/ http://lesjones.com/2008/11/25/inflation-adjusted-us-house-p...
- John23832 10y ago
  You don't typically consume an investment. If I buy a house and live in it, how quickly can I reasonable divest myself from the house? For the average American, not quickly at all. Why is that? Because I need to a home to live in. If not this one, another. And generally the equity in my current home will be used to secure my future one. A house that you buy and don't live in (or is easily divested) could be seen as an investment because you don't live in (consume) it. If you need to sell it, that money could easily go to other things. And you can sell in a timely manner. Edit: I was trying to be layman about it, but chillingeffect did a good job on the technicals.
jholman 10y ago
> I'll go ahead and say this. Your home is NEVER and investment. A house that you own, maybe. But, I repeat, your home is never an investment. I'll go ahead and say this. My home is certainly an investment. I allocated some capital to some real property, and this real property generates value for me every day, which I might have purchased otherwise (indeed, would have been nearly forced to). Because of the ability of my home to generate value in this manner, I expect that others might want to own it, and so it can probably be resold. I also am pretty optimistic about my ability to resell it for more than I bought it for, although perhaps not at such a price such that the purchase was as profitable as, say, buying an Vanguard ETF.
- John23832 10y ago
  I'm not saying you can't make money by buying and selling houses, but the average person's home is not an investment.
  - tormeh 10y ago
    Well, it is if you plan to sell it and move to a cheaper place once you retire, using the profit to fund part of your retirement. That's well inside the definition of retirement saving.
    - John23832 10y ago
      Using a layman's definition, yes. However, strictly speaking, the average person's home is not an investment.
- jdmichal 10y ago
  Everyone is born short housing. Buying your first house is covering a short position. Renting instead of buying is maintaining a short position. Buying your second house is taking a long position.
- dxhdr 10y ago
  Your home is a durable consumer good. You spend (lots) of money maintaining it and paying insurance, because it's in a constant state of decay. Your home isn't paying you anything, quite the opposite. Maybe someone will come along later and pay you more than what you've spent on it. Maybe not. On average you're likely to get back what you paid plus inflation. It's a speculative investment at best. Now, owning a home where someone else is paying you to live there? That's an investment.
ethbro 10y ago
> and to have spent money moving Point that at the ~52k median US income, a long distance move + the inevitable missed weeks without a paycheck is not a trivial decision for a lot of people.

roymurdock 10y ago

Yeah I think we're in agreement in general, just coming at this issue from different perspectives. I'd like to see things changing on the consumer side as well as the gov/regulation side described in the article: Riverside County, Calif., has opened an investigation into marketing practices for PACE loans, and California Gov. Jerry Brown signed into law in September new requirements establishing uniform disclosures for PACE loans, an effort to make lending terms closer to those for mortgages. Homeowners who get a PACE loan now have three days to back out. The largest PACE lender, Renovate America Inc., is accused in three lawsuits filed in November by borrowers of double-charging interest and administrative fees and failing to immediately credit loan payments. The suits seek class-action status. The company denies the allegations and says it will “defend PACE, our company and the program vigorously.” In November, the Energy Department urged administrators of the loan programs to clearly explain loan costs and other terms, allow borrowers to cancel their loan during a short period and deter kickbacks to contractors. It would be nice to be able to trust financial institutions/loan originators, have them explain things to consumers in easy-to-understand and fair ways, and have some type of more personal relationship than we have now with those who provide us with places to save/borrow money.

SubuSS 10y ago

>Your home is NEVER and investment. A house that you own, maybe. But, I repeat, your home is never an investment. Can you expand a bit more on this? Usually it might not directly turn into an investment, but it does act as a 'savings vehicle' in many cases. For example when I moved to US a long time ago, the choice was between a 1200 rent and a 1600 mortgage (assuming I put a down of 25k or so). At that point it felt like a very reasonable investment and the market worked out afterwards where in it turned in a great ROI. If it wasn't for that move, I would've still been pissing off money in rent. Also the actual investment options today are not as cut and dry as it seems either: There is no real 'assured' gain anywhere even though I do see the 3.5-6% returns number touted in the reddit personal finance circles. In the long term, I would ideally split money between these, not eschew home as an investment vehicle. With the right amount of thought and reasonable location choices, it can indeed turn out into a great investment. This is not to ignore the risks people take by overextending themselves / doing 'home flipping' but to each their own.

chillingeffect 10y ago
It's an illiquid investment that appreciates at a rate that varies in conjunction with inflation. You might win or lose, but it's tough to predict, varies with geographical area and in relation to inflation and wages. There are many graphs that show aspects of this, here is one useful one I found: http://lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/ http://lesjones.com/2008/11/25/inflation-adjusted-us-house-p...
John23832 10y ago
You don't typically consume an investment. If I buy a house and live in it, how quickly can I reasonable divest myself from the house? For the average American, not quickly at all. Why is that? Because I need to a home to live in. If not this one, another. And generally the equity in my current home will be used to secure my future one. A house that you buy and don't live in (or is easily divested) could be seen as an investment because you don't live in (consume) it. If you need to sell it, that money could easily go to other things. And you can sell in a timely manner. Edit: I was trying to be layman about it, but chillingeffect did a good job on the technicals.

jholman 10y ago

> I'll go ahead and say this. Your home is NEVER and investment. A house that you own, maybe. But, I repeat, your home is never an investment. I'll go ahead and say this. My home is certainly an investment. I allocated some capital to some real property, and this real property generates value for me every day, which I might have purchased otherwise (indeed, would have been nearly forced to). Because of the ability of my home to generate value in this manner, I expect that others might want to own it, and so it can probably be resold. I also am pretty optimistic about my ability to resell it for more than I bought it for, although perhaps not at such a price such that the purchase was as profitable as, say, buying an Vanguard ETF.

John23832 10y ago
I'm not saying you can't make money by buying and selling houses, but the average person's home is not an investment.
- tormeh 10y ago
  Well, it is if you plan to sell it and move to a cheaper place once you retire, using the profit to fund part of your retirement. That's well inside the definition of retirement saving.
  - John23832 10y ago
    Using a layman's definition, yes. However, strictly speaking, the average person's home is not an investment.
jdmichal 10y ago
Everyone is born short housing. Buying your first house is covering a short position. Renting instead of buying is maintaining a short position. Buying your second house is taking a long position.
dxhdr 10y ago
Your home is a durable consumer good. You spend (lots) of money maintaining it and paying insurance, because it's in a constant state of decay. Your home isn't paying you anything, quite the opposite. Maybe someone will come along later and pay you more than what you've spent on it. Maybe not. On average you're likely to get back what you paid plus inflation. It's a speculative investment at best. Now, owning a home where someone else is paying you to live there? That's an investment.

ethbro 10y ago

> and to have spent money moving Point that at the ~52k median US income, a long distance move + the inevitable missed weeks without a paycheck is not a trivial decision for a lot of people.