Published on January 2, 2015
This year, I sold one apartment and bought another. It was a reminder that the words “home” and “investment” don’t belong in the same sentence. Don’t get me wrong: I’m all in favor of home ownership. The tax breaks are impressive. Home ownership forces us to save: With each mortgage payment, we whittle down the loan balance, so eventually we own a valuable asset free and clear. Most important, a home provides us with a place to live. But what about the price appreciation? According to Freddie Mac, home prices have climbed just 3.7% a year over the past 30 years, not much above the 2.8% inflation rate. To make matters worse, this figure doesn’t reflect the hefty costs of buying, owning and selling a home. What if you include those? Consider one columnist’s sorry tale.