Owning Your Home Still a Good Investment
History is on your side if you are a homeowner. While real estate prices go up and down, over the long haul you will generally see a rise in value in your investment. They give you significant tax benefits, especially if you can be an investor at the same time, for instance live in one part and rent out the other. And real estate provides good leverage: if you put 10% down and the home doubles in value (remember a few years ago? this was common) you get a 1,000% return on your money.
The intangible benefits of home ownership include a sense of independence, security (in good economic times), and hopefully a place you can count on as a roof over your head and to shelter your family. None of these are offered by a stock or bond certificate.
These advantages - as mentioned above - accrue if you buy and hold. If you decide to roll over the property in a short period, speculate and buy a foreclosure to fix up and sell - those types of real estate purchases - there may be a good return, but not in this market. Generally, if you own for more than 10 years, the market ups and downs will average out and you will at least break even in your investment.
Economists say home prices have risen by about 0.5% a year above inflation, about 4%, since the 1940s. Since the National Assn. of Realtors began tracking sales data in 1968, the median sales price has climbed 6% annually, from $20,100 then to $195,200 in 2009. Not a bad return on your investment!