A home is not a good investment. No joking, it is indeed a fallacy pushed by the boomer generation, and a good reason to criticize that generation. This fallacy is essentially the cause of the 2008 Great Recession.
It's like how Koreans believe in "fan death", that leaving a fan on in a room will suck out all the oxygen and suffocate people. It makes no scientific sense, things can't work anything like this, but the older generation still believes.
Home ownership is our fan death.
Home ownership is our fan death.
The mind boggling obvious fallacy here is that government policy is going to make it easy for new home buyers to buy cheaply, but that old home owners will be able to sell their homes for an expensive price. The two policies are incompatible, yet government pursues both.
You essentially buy a home "on margin", putting 10% in. This is an incredibly risky investment strategy (meaning "gambling"). It can lead to great riches or great losses.
If you buy into a market that happens to be growing, then your gamble pays off. If you happen to buy into a market that crumbles before retirement, you'll get wiped out. Ask the homeowners in Detroit how that went. Either way, it means gambling for your retirement.
In practice, most markets are stable. So while home ownership is unlikely to make you rich, it's unlikely to make you poor.
It's at this point I want to remind people that few businesses own buildings. Microsoft has a huge campus in Redmond, Washington, but almost the entire campus is leased, not owned. They don't own their own buildings.
In practice, they occasionally have to own buildings, like maybe those with SCIFs for government work. But owning instead of leasing is for reasons other than good investment reasons.
I'm not sure what the original tweeter meant by this, but it demonstrates exactly why Microsoft doesn't own real estate:
Sears has $billions of dollars of real estate, which they've been able to steadily sell in order to stave off bankruptcy as their business declines. Is this good for Sears? That's not the question. The question is whether it's good for Sears's share holders.
Sure, selling off real estate allows Sears to hold off the inevitable a little while longer, but the outcome is still inevitable. Having all that real estate to thrown down the drain with the rest of the company just magnifies the loss to shareholders.
