I have bought houses in many parts of the country, which, of course, shows you the problem with buying a house. If you move, you’re not going to recoup much of the cost you put into the house.
We’ll get into that in a future video, but here, I want to use the Case/Shiller historical housing price index, going back to 1890 to show you the REAL returns of housing.
You can find Shiller’s vast databank of info here. http://www.econ.yale.edu/~shiller/data.htm
Robert Shiller, an economist at Yale, best known for his call on the bubble of 2000, is prominent in academic circles when it comes to valuations of stocks and real estate.
His CAPE valuation tools has been used by naysayers for nearly two decades now to “show” that stock prices are too high. While the CAPE hasn’t been “proven” correct yet, in terms of anticipating a bear market, Shiller remains a widely admired analyst for his research prowess.
I follow Shiller. I do pay attention to the CAPE model, because it does tell us something about valuations. Shiller won’t say that high valuations = a doomsday for the markets though. But the markets are highly valued…relative to historic norms.
But back to buying vs. owning. You’ve all heard buying a home is a GREAT investment. But is it?
Basically, when inflation is factored in, the average American has made no money in owning a home since 1952. None.
Certain areas has done incredibly well. The DC area, Bay Area, San Diego, but other areas have tanked.
So, while some have anec
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