_John Philip Mason is a residential appraiser with 20 years experience and covers the Hudson Valley region of New York. He’s a good friend and a true professional who believes that all appraisers need to have a macro-economic perspective in order to be effective. This week, his lecture gets us comfortable in the doghouse in Solid Masonry._ …Jonathan Miller
I’m not sure when it started or who said it first, but it’s been driving me crazy for years. And now that real estate prices appear to be declining, maybe I can finally get some respect for a pet peeve of mine. It’s a concept that’s been thrown at us so many times and from so many directions, people have come to believe it’s true. It’s been spouted by well regarded financial analysts, high ranking government officials, the media, almost every real estate agent on the planet, and even our own parents. It’s even been cited by some pretty smart people. Not that any of the fore-mentioned are dumb (I love you, Mom).
Countless Americans would shout me down and, surely, I am in the minority. But my faith and conviction keep me strong and I know that I am not alone. Although, if the truth be told, I personally don’t know anyone who agrees with me. None the less, this is my post, damn it, and what matters most is I believe.
And here it is: _A house is a home. It is not an investment._
There, I said it. With those few simple words, I can sense the displeasure of the masses (there’s no ego here is there?), feel their passions rising to a boiling point and anticipate the hate mail that is formulating in the minds of all those “non-believers.” (Or perhaps they refer to me as the non-believer.) Before you start throwing darts, please consider the following:
* If a house were an investment, it would earn money for you, not require that you spend lavishly on it. While home prices do trend upwards in the long run, so does the cost of health care, higher education, taxes and the overall cost of living.
* If a house were an investment, it would serve you, not enslave you. Either we spend many weekends painting, raking leaves, etc., or we pay vast sums of money for others to do our work.
* If a house were an investment, people wouldn’t add over-improvements. We all have a neighbor who doesn’t seem to be able to stop themselves.
* If a house were an investment, they would all be “well” maintained. Conversely, we also have neighbors who haven’t done anything since the day they moved in and nothing will be done until the day they move out.
* If a house were an investment, it would never be the biggest on the block. We all accept the fact that the best house on the block is rarely the one that does the best in the market place (in terms of rate of return).
* If a house were an investment, it wouldn’t need to be personalized. It would serve a function and the rate of return would be in direct proportion to its functionality, not personality.
This is not to say that one can’t buy a house and rent it out as an investment. I just think we are kidding ourselves if we continue to think of our primary residence as an investment. So while I enjoy our home, despite any work it needs, it is simply that, our home. We can’t eat it. It doesn’t work for us. It is simply our little piece of the world.
And at the end of the day, no matter what kind of a day it was, we can go home. Because a house is a home, it is not an investment.