Prices are down, mortgage rates are low--it might be a good time to buy a house if you have a compelling reason to do so--but read this first--"Why Entrepreneurs Should NOT Buy Homes."
The reality today is that most working people (exluding those working in government jobs) by necessity are "entrepreneurs"--lifetime employment for one employer in one location is a dying, if not already dead, concept. Which is why Robert Bridges, professor of clinical finance and business economics at the University of Southern California's Marshall School of Business, wrote last year in the Wall Street Journal that "today's young people would be foolish to imitate their parents and view ownership as the cornerstone of personal finance"--
“. . . . the average single family house has never been a particularly stellar investment. In a society increasingly concerned with providing for retirement security and housing affordability, this finding has large implications. It means that we have put excessive emphasis on owner-occupied housing for social objectives, mistakenly relied on homebuilding for economic stimulus, and fostered misconceptions about homeownership and financial independence. We've diverted capital from more productive investments and misallocated scarce public resources. . . .
. . . a dollar used to purchase a median-price, single-family California home in 1980 would have grown to $5.63 in 2007, and to $2.98 in 2010. The same dollar invested in the Dow Jones Industrial Index would have been worth $14.41 in 2007, and $11.49 in 2010”
“. . . . A nation of house buyers becomes captive to the economic cyclicality caused by bursts of construction activity, and it is not lifted or sustained by the limited levels of service employment related to existing housing. By contrast, a nation of business startups and investors supports our capital markets and creates long-term employment, income, exports and the myriad technological advancements desperately needed by an expanding American society.”
I cited the above in a post last year and then posed the following (still relevant) question: I wonder if anyone in Washington D.C. gets it?