Canada's Housing Bubble

Dec 31, 2009 Twist housingdoom.com

So the housing market is a little off here recently, over the long-term, real estate is a good investment, right? Not necessarily, according to [You aren't going to believe this.] the National Association of Realtors:

NEW YORK (CNNMoney.com) — Taking into account inflation, home prices are actually lower than they were 10 years ago, according to a report from the National Association of Realtors released Wednesday.

The median home price in November 1999 was $137,600, NAR said, and by November 2009 it had risen 25% to $172,600. But with cumulative effect of inflation, prices are actually 3% lower in real terms.

You know they are going to find a happy thought somewhere though.  They also said:

The good news is that wages have risen in the past 10 years, so homes are now affordable than they had been, especially at the height of the boom in the middle of this decade, said Walter Molony, a spokesman for the Realtors.

Affordable, however, is a relative term.  I’ve been renting for just over four years now, at rent prices that have been 30%-50% less than a comparable mortgage would be on the same properties.  I have had NO major home repair bills [although my landlords couldn't say the same] and remodeling expenses are no longer a line item in my budget.

Sure, not everyone has lost money in the past 10 years, [I did O.K. when I sold in 2005.] and there are still good reasons to own rather than rent.  The "fact" that real estate is always a good, long-term investment however, is not one of them.