Seattle Residential: I Do That: Your Home Not a Nest Egg Anymore?

Your Home Not a Nest Egg Anymore?

Your Home Not a Nest Egg Anymore?

In This Post

I strongly disagree.

 

The Seattle Times shared this article by Dave Streitfeld of the New Your Times with us this morning entitled Your home a path to wealth? Experts say no. Stan Humphries of Zillow is quoted as saying, "There is no iron law that real estate must appreciate."

Streitfeld supports the opinion with a vague, "Instead, Humphries and other economists say, housing values merely will keep up with inflation. A home will return the money an owner puts in each month but will not multiply the investment." And Dean Baker of the Center for Economic and Policy Research says that after adjusting for inflation, values will never catch up.

Never? Never seems like a mighty long time. I remember hearing about a war to end all wars. I have to wonder what the purpose of such an article is. I have to wonder why an executive at Zillow would make the statements he made in the article. Is the entire history of home ownership completely reversed because of a three year aberration caused almost entirely by greed on EVERYONEs part.

I will concede that there are people who make a living from buying and selling houses, but they are not the people that drive the market.

Home ownership is a great way to build a nest egg. You won't be able to retire next week or next year because you bought a home today, but you will find rewards if you do continue to pay it off over thirty years, with a payment that never changes.

And if you decide to rent instead, then what happens? Well, the rents will go up every year or so. After all the landlord has to cover the taxes and other expenses. What happens is, you've created a nest egg for the property owner.

 

 

 

 

Glenn Roberts
Retired

 

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Comment balloon 9 commentsGlenn Roberts • August 23 2010 10:23AM

Comments

Glenn:  Isn't it amazing that a Zillow Executive would make such statements when he is, indeed, being supported by the very industry he disses!!!!!!!!!!  Aaaaarrrrgggghhhhh.  Where I come from they call that peeing in your own back yard -- not a good thing to do.

Posted by Tish Lloyd, Broker - Wilmington NC and Surrounding Beaches (BlueCoast Realty Corporation) almost 8 years ago

Glenn, I wonder what he would think would be a better investment that would at the same time give you a roof over your head?  There are lots of ways to look at value I think.

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) almost 8 years ago

I agree, but deep down I hope you are mistaken ( Nice one Tish )
You are one busy person Glenn!
Paul

Posted by Paul S. Henderson, REALTOR®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) almost 8 years ago

Tish - The Seattle Times newspaper headline writer made a big negative deal out of it. Perhaps it's because most reporters can't afford to buy.

Charles - Likely he thinks the best way to get wealthy is with a zillow executive bonus at the end of each year. Just jealous cause I didn't get that job.

Paul - I'm disagreeing with the article. I hope I'm right.

Posted by Glenn Roberts (Retired) almost 8 years ago

Glenn - I think Zillow exec is just saying this to get the public to trust him/her.  I think this is a ridiculous notion. We will see appreciation in certain areas of the country.  Oceanfront real estate for example.  There is only so much beach available for residential homes.  I think it's a matter of location and what you do with the money saved.

My parents bought their home in Sacramento CA in 1973 for 29,900.  Their payment was $390 a month.  In 2001 their home was worth 300,000 with no payment.  They were easily able to pay it off early as their wages increased.  Once rent exceeds a mortgage payment (in a scenario) how much does one make with the difference in savings if invested in the stock market with an annualized 6% rate of return.  What about tax savings that are calculated as savings with a rate of return.  

 

I think real estate still is and always will be a great investment.

Posted by Nevin Williams, Raleigh Mortgage Pro (Sierra Pacific Mortgage Raleigh) almost 8 years ago

Nevin - They miss so much when they just compare this months rent with this months house payment. Perhaps they perceive of no future but the immediate.

Posted by Glenn Roberts (Retired) almost 8 years ago

The only thing that I believe would get the real estate market moving again would be a dynamic economy, low employment, improved credit for the casualties of the mortgage mess, and confidence in the American consumer.

When that happens, real estate values will begin to improve.

How long does anyone believe that will take???

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 8 years ago

Lenn - And I suspect that will be very local for the long term. When a geographic area can show job growth, people will mover there and the housing demand will grow....there.

Posted by Glenn Roberts (Retired) almost 8 years ago

History also shows those who own a home retire with an average of 130% more money than those who rent their entire life and the kids of the families who own are more likely to go to college than those who rent. If not a nest egg, then certainly is the nest!

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) almost 8 years ago

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