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> Given that, you buy your house to remove risk of local changes to your detriment. If you own real estate you're buying into local risk. Real estate generally

> Given that, you buy your house to remove risk of local changes to your detriment. If you own real estate you're buying into local risk. Real estate generally isn't insured against things like acts of war, so if NYC gets nuked or whatever then you lose all your money. If you're buying real estate right now then you're basically betting against war, automation, AI, climate change, energy price spikes, etc. Even if you don't think that any of those things will happen imminently, do you really want to bet against all of them over the next 30+ years?

ThrustVectoring 8y ago
What should be more worrying than all that is the correlation between local housing prices and the local labor market. Take Detroit, for example: it had both plummeting real estate prices and mass layoffs from the big automakers in 2007/2008. And if you're working, you're already exposed to changing conditions in the local labor market. Owning your house exacerbates this in the worst way, just like how the very last company you should own stock in is your employer.
- Alex3917 8y ago
  Exactly. I like the idea of owning a house, but the idea of not only investing in the real estate market, but investing where I live is insane. If I'm in the NYC labor market then I feel like if I were to own real estate then I should be hedging my risk by owning in Austin or something.
  - ThrustVectoring 8y ago
    Different careers have different amounts of local correlation - I'm planning on waiting on buying a house until I get established as a remote programmer, then buying in a relatively low COL area.
mikeash 8y ago
What alternative do you propose that doesn’t involve betting against all of those things? Hoarding gold?
- Alex3917 8y ago
  I think betting on the tech industry (minus adtech) is reasonable.
fwip 8y ago
If my house gets nuked, I'm probably dead.
- Alex3917 8y ago
  Most scenarios where the U.S. gets nuked are at high altitude just to fry our electronics. If a nuke went off directly over your house you probably wouldn’t even notice for a couple hours if you were sleeping, but you probably wouldn’t be able to live there afterwards either.
  - dillonmckay 8y ago
    I recommend watching the first season of ‘Jericho’ to see how a small town deals with a similar scenario.

ThrustVectoring 8y ago

What should be more worrying than all that is the correlation between local housing prices and the local labor market. Take Detroit, for example: it had both plummeting real estate prices and mass layoffs from the big automakers in 2007/2008. And if you're working, you're already exposed to changing conditions in the local labor market. Owning your house exacerbates this in the worst way, just like how the very last company you should own stock in is your employer.

Alex3917 8y ago
Exactly. I like the idea of owning a house, but the idea of not only investing in the real estate market, but investing where I live is insane. If I'm in the NYC labor market then I feel like if I were to own real estate then I should be hedging my risk by owning in Austin or something.
- ThrustVectoring 8y ago
  Different careers have different amounts of local correlation - I'm planning on waiting on buying a house until I get established as a remote programmer, then buying in a relatively low COL area.

mikeash 8y ago

What alternative do you propose that doesn’t involve betting against all of those things? Hoarding gold?

Alex3917 8y ago
I think betting on the tech industry (minus adtech) is reasonable.

fwip 8y ago

If my house gets nuked, I'm probably dead.

Alex3917 8y ago
Most scenarios where the U.S. gets nuked are at high altitude just to fry our electronics. If a nuke went off directly over your house you probably wouldn’t even notice for a couple hours if you were sleeping, but you probably wouldn’t be able to live there afterwards either.
- dillonmckay 8y ago
  I recommend watching the first season of ‘Jericho’ to see how a small town deals with a similar scenario.