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That's the disease: the use of housing as one's primary source of savings and retirement funding. There are alternatives like pensions, improving social securi
by api 4y ago
That's the disease: the use of housing as one's primary source of savings and retirement funding.
There are alternatives like pensions, improving social security and medicare/medicaid, etc. The de-prioritization and gutting of these has probably contributed to housing taking their place.
But housing isn't a sustainable answer. It's basically done. Current generations can never see the kind of housing appreciation their parents did. Prices simply can't go up much more except in areas that are undervalued and never saw a run-up in previous decades. New buyers today risk the opposite: straining to buy into overvalued markets only to see them crash and leave them underwater. Housing as a source of retirement funding is a one-generation-and-done phenomenon.
Personally I would not touch real estate in overvalued metros today unless I were rich and could afford to lose 25-50% of the value of the home. If interest rates don't come back down to near-zero and/or if the trend toward telework and geographic decentralization continues, these areas could very well crash.
- xwdv 4y agoPensions, social security, and Medicare/Medicaid can all be wiped out with the stroke of a pen. A hard asset such as a home is not so simple. I think there is still room for housing to be the best investment a person could make in their life.
- api 4y ago> I think there is still room for housing to be the best investment a person could make in their life. If so, only at the expense of the next generation who will find it even harder to afford a place to live. When housing prices go up it means the next generation will find it that much harder to afford a place to live.
- mattmanser 4y agoA stroke of a pen can make your home someone else's too, so not sure what's your point?
- mindslight 4y agoThis myopic "but government" fearmongering is itself a cause of the disease. The "hard asset" value of a house is a very small component of its total value. The majority of the value directly relies on the government policy of overwhelming monetary inflation dumped into the financial industry. That policy can be changed much easier than bona fide entitlement policies, and perhaps it has even started changing already.
- saint_fiasco 4y agoApparently, someone repairing a car in their own garage can significantly reduce the value of this so called hard asset.