As we know, a home is an appreciating asset—it’s worth increasingly more the longer you have it. That has been the case for years, but it looks like it might be changing. Where a home used to be considered an investment as well a place to lay your head, economists are moving away from that perspective.
The Bubble Popped, And Has Yet To Be Repaired
The New York Times reports that the housing bubble that expanded from the 1970s to the 1990s is unlikely to be replicated in the near future, and that recovering from the loss of housing value—about $6 trillion—will take at least 20 years. Economists estimate that homes purchased in the present and future will appreciate enough to keep up with inflation, but that they won’t turn the massive profit seen in recent years.
Homebuyers Are A Ray Of Sunshine
Yet it’s also reported that homebuyers seem to be a dependable source of optimism in a situation that’s otherwise clouded by hopelessness. Real estate experts and those sunny economists are quick to point out that this optimism is rather deluded, as a home providing a stable investment isn’t a law of nature, but rather the pattern over the last three decades. Whether or not that’s true, the fact is that those who can afford it are still purchasing homes and hoping for the best.
To Buy A Home Is Decidedly Personal
Not being real estate gurus or in possession of an economic Magic 8 Ball, it’s beyond us to advise for or against purchasing a home. What we can do, however, is provide our usual two cents. And those cents are these: There is quite enough Sturm und Drang in the news today. There’s enough instability, and joblessness, and homelessness. More than enough anxiety and desperate withdrawals from cash reserves. If we can afford to buy a home—something where we know we can afford the taxes and costs—we’re going to do it. Let the storm rage outside, while we stay safe in our port.
Tell us in the comments: Do you think housing will continue to be a trustworthy investment over the next decade?