this post was submitted on 20 Aug 2023
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Homes as wealth-creators.
Americans take it as received wisdom that homes are meant to generate income through higher valuations over time. We just assume home prices go up over time and if it's not actively increasing in value, the home was a failure.
Many other countries don't treat homes this way. They are dwellings, invest what you want to your liking, but it's not a retirement account.
This focus on wealth generation creates lots of perverse incentives, such as exclusionary zoning, building on lots that are overly large, and suburban sprawl. These don't reflect people's actual, desired form of housing but rather maximize wealth for homeowners at the expense of everyone else.
We have a completely warped view of housing that causes us to be preyed upon by real estate agents, landlords, HOAs and the like.
You make good points, and it is a perverse line of thinking. However I do think that homes and land are the only real investments we can make. Not in a sense of trying to make a profit on it, but as something to put our money into.
Houses have not been an appreciating asset since 2008, and the only way to make money off of them in the current market is the buy massive quantities and hold them for decades until inflation does its thing
What? This is simply not true. Yes, there was a dip in 2008, but the real estate market has since recovered and we are already well beyond what houses were valued at on average in 2008 and this time there's no subprime lending bubble.
Buying real estate is still the #1 way for regular people to passively build wealth in America. It's just getting a lot harder for average people who are not already on the ladder to take the first step due to prohibitively high costs, taxes, and interest rates.
Such a good take.