Why Land and Homes Actually Tend to Be Disappointing Investments
Sorry, I&#x27;ve never been able to reconcile these claims. On the one hand, any retirement-investment seminar is going to give the stat that real estate on average has returned just a little above inflation.<p>OTOH, pretty much everyone&#x27;s social group is full of people who bought a home that has significantly appreciated in value if they&#x27;ve held it 20+ years (and also saved them a ton in housing costs). What gives?<p>- Is there a huge chunk of homes pulling down the average?<p>- Is the home appreciation understating the return, after you account for interest&#x2F;maintenance&#x2F;tax costs?<p>- Is our recent experience dominated by anomalously large returns that aren&#x27;t likely to continue?<p>- Is it an artifact of the calculation, which excludes relevant things like the imputed rental income (and not having to pay current rates)?<p>Does this statistic really translate into &quot;don&#x27;t worry, you won&#x27;t be priced out of any booking metro area&quot;?