Monday, May 14, 2012

Over: The Decades-Long Belief That A House is An Asset

A house is a consumable, just like shoes or apples.  Useful, but not a money-maker or "savings plan."   There is a 15 second ad before the video begins.  See related article.

1 comment:

Anonymous said...

Economist here. A house is *both* an asset and supports a stream of consumption. It's just like owning the asset we call stock. It can support consumption through the flow of dividend payments and, hopefully, generate gains though appreciation in its value.

The stream of consumption a house supports is represented by the rental income on the house regardless whether it's paid to you by a tenant or paid by yourself to yourself as in the case of owner-occupied housing.

I think what you mean is that a house is no longer seen as the high-return, low-risk asset it once was. It may be a bad asset (at least at the current downwardly rigid prices) but it's still an asset.