I couldn't disagree more.
Never buy a home as an "investment". Buy a home because that's where you want to live. The value of a home is dependent on a lot of factors beyond your control. Where are you on the demographic curve when you buy? What are interest rates when you buy? Are jobs plentiful in the area? Are the schools good quality? Also, you never really own it, try not paying the real estate taxes and see what happens.
The Case-Schiller index just showed another 5% decline in median home prices.
The vast majority of the "smart" investors are upside down with the "best investment" they made. One of the key factors in home pricing is the median income in the area. Wages are flat, or declining, which means the % able to buy is in decline as fast as the home values are declining.
IOW, buying a home is a TERRIBLE investment. It's only smart if the monthly cost is 38% or less of your income and it's where you want to live.
You forget the simple fact that you have to live someplace, and you are going to be paying the rate someone else needs to make in order for them to pay their bills of owning property.
There’s no getting away from it Wm.
“Investment” in terms of “capital gain” is not the issue. Investment in terms of financial security is something else entirely.
Since people have to have someplace to live anyway, then they will be paying someone for living space. NOT having that expense at all is a whole lot cheaper than having it.
As I said, owning your own home is like having an annuity that pays X amount each month. That’s not to say that your annuity made a good return all those years, but it is saying that at the end of the term, it will be yours.
Property taxes don’t approach the cost of property tax + payment. Rest assured, though, that ANY rent will include all of the costs of the property owner...to include his property tax.
Owning property is security. That’s why the call it REAL estate.