"DSK" wrote in message
news
NOYB wrote:
Housing prices have averaged an increase of 17-26% in Naples over the
last 6
years. Name a single investment that offered equal or greater return,
with
the same level of risk, *and* a tax deduction.
We already had this discussion, didn't we?
A house is not an investment instrument. The fact that house prices have
gone up steadily over the past 10 ~ 15 years in most areas, and
astronomically in a few, is no indication that a house should be
considered a bankable financial return.
wrote:
You've almost got it, Doc. The price of housing, expressed in dollars,
has increased 17-26% for the last 6 years. The owner of a single family
home in Nipples is no better off, however, unless he also owns
additional property that he doesn't need to *consume* in its entirety
every month.
If you bought a 3000 sq ft house for $350,000 ten years ago and it's
now "worth" $900,000, you aren't actually any further ahead. If you
sold your house for $900,000, you likely couldn't replace it with an
equally large, equally nice house in a comparable neighborhood for
anything less.
If the house is "worth" $9 million, but you have to pay the same $9
million back out again to replace it, all you have in the end is
whatever you had before (in addition to your primary residence) and a
primary residence with a ridiculous valuation attached. That and a
bigger property tax bill......the local assessors love those inflated
real estate values.
Yep. Them's the facts.
Another issue is a little more basic... no single commodity outstrips the
background rate of inflation in the long run.
None.... never... and part of why is that every commodity which increases
in value contributes to increased inflation.
The fact that housing prices in NOYB's neighborhood have gone up so much
for so long ought to be a warning sign to long term homeowners in that
neighborhood to sell & take the money while they can get it. NOYB is
playing a sucker bet, to the sure profit of the bank, the insurance co, &
his local tax collector... leaving him holding the risk and an uncertain
gain.
You don't know what you're talking about
:
The tax collector sees very little additional income from the rapid
appreciation. "Save Our Homes" ensures that the rate can't go up more than
3% per year.
The insurance company also gets very little money from the appreciation.
They're insuring the structure...not the land. The value is in the land.
The bank sees no additional money either. The principal doesn't increase.