[CoachKandSportsguy]

Originally Posted by melpetezrinski

Our plan was to sell in 3-5 years, which we did, and reap the capital appreciation. How is this NOT an "investment decision from a finance point of view."

executive summary: housing is a consumption decision, with no expected income generation, and conflating consumption with investment because there is a price attached, and potentially a taxable gain.

The truth? Your house is not an investment | Money Under 30

A House Is a Home—Not an Investment - The Atlantic

A Wharton Professor Explains Why a Home Isn't an Investment

Why Your Home Is Not An Investment | by Adam Del Duca | Making of a Millionaire

What you are engaging in is human bias, and in this case, mental accounting and resulting. Understanding Common Types of Bias in Investing

https://www.investopedia.com/terms/m...accounting.asp

The other being resulting, which is a really hard one to grasp
https://www.bjjmentalmodels.com/resulting

best explanation
https://www.amazon.com/Thinking-Bets.../dp/0735216355

this all comes under the heading of behavioral finance, which is infinitely more accurate in understanding hoomans handling money, than the 1950's rational man model. Economics is actually the study of hoomans handling money, so behavioral economics and behavioral finance explains much more of reality of decisions than the rational man, which we know we are not. If we all were rational, many industries would not exist

[manaboutown]

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[melpetezrinski]

Originally Posted by CoachKandSportsguy

executive summary: housing is a consumption decision, with no expected income generation, and conflating consumption with investment because there is a price attached, and potentially a taxable gain.

The truth? Your house is not an investment | Money Under 30

A House Is a Home—Not an Investment - The Atlantic

A Wharton Professor Explains Why a Home Isn't an Investment

Why Your Home Is Not An Investment | by Adam Del Duca | Making of a Millionaire

What you are engaging in is human bias, and in this case, mental accounting and resulting. Understanding Common Types of Bias in Investing

https://www.investopedia.com/terms/m...accounting.asp

The other being resulting, which is a really hard one to grasp
https://www.bjjmentalmodels.com/resulting

best explanation
https://www.amazon.com/Thinking-Bets.../dp/0735216355

this all comes under the heading of behavioral finance, which is infinitely more accurate in understanding hoomans handling money, than the 1950's rational man model. Economics is actually the study of hoomans handling money, so behavioral economics and behavioral finance explains much more of reality of decisions than the rational man, which we know we are not. If we all were rational, many industries would not exist

Did you just search for your post from months ago and copy and paste those links? I can search google and post counless links also to substantiate my stance but all you need to do is think about the decision I made. Can I make more money by investing in a bigger house than in another investment vehicle. Can I realize more capital appreciation than the gains in bonds, treasuries or equities. It was a financial decision of how to invest my inheritance to realize the highest ROI, PERIOD.

[CoachKandSportsguy]

Originally Posted by melpetezrinski

Did you just search for your post from months ago and copy and paste those links? I can search google and post counless links also to substantiate my stance but all you need to do is think about the decision I made. Can I make more money by investing in a bigger house than in another investment vehicle. Can I realize more capital appreciation than the gains in bonds, treasuries or equities. It was a financial decision of how to invest my inheritance to realize the highest ROI, PERIOD.

Whatever you want to believe, you can. My only comment is confirmation bias can be a real beetch! I answered your question, you don't like / agree with the answer, that's fine. There's common knowledge and there is expert knowledge. I am not an expert, but worked in the finance industry in many capacities, and i read the experts when i can to learn from them.

I could say that our purchase of our house in 2018/9 was a brilliant investment decision, with an ROI gain, yada, yada, yada, because I am in finance and that's what i do. .

but i don't, it was an impulse and pure luck. it was nothing more than planning for the future in a good area with a custom design which we love. after that, nothing was planned nor thought to be an investment, even being in an LLC and generating revenue and income.

peace out

[GoRedSox!]

I'm not sure that there's any one right answer to the question.

It's certainly reasonable to have a low-interest mortgage to free up cash for investing.

The last mortgage I had was low interest, but I still made conservative investment decisions. I did consider paying the minimum on a 5 year ARM at 2 3/8%. But in that time frame, 2014 forward, I could not find a risk-free investment that was going to significantly provide a better return. Interest on US Treasuries and CD's was far below 2 3/8's. So I paid every extra dollar I had against that mortgage and paid in off in 7 years, and then sold it at a profit and that's the money we used to buy our home in The Villages.

In retrospect, had I invested the money in the stock market, I would have done a lot better than 2 3/8%. But I didn't have the benefit of hindsight when I was making that decision. I also had peace of mind. At the time of the financial crisis, 25% of the mortgages in the country went underwater.

That being said, in a rising interest rate environment, the investing paradigm has changed. If I still had a 2 3/8% mortgage, I would not pay it off early today because I can get a guaranteed 4.66% on the 10 year US Treasury, and the interest I pay on the mortgage is tax deductible if I can get over the threshold for itemized deductions. It's a no-risk decision.

Good luck to everyone on their investments in their homes, the markets and everywhere else.

[Aces4]

Originally Posted by retiredguy123

I agree. In 1980, I had a $35K mortgage with an interest rate of 7.75 percent, which was considered a bargain at the time. I couldn't sleep at night, so I paid it off in 3 years. I offered the bank a discounted cash payoff, but they refused. That is the only loan I have ever had. To me, borrowing money has never been a good financial decision.

That was a deal. In 1981 we had a land contract for 20 acres with a small home, rate was 18% and we negotiated to pay only the interest on the loan of $75,000. purchase price until our home sold. Our home at the time was under contract, contingent on the rezoning permission from county on the buyers home. It ended up taking a year for their home to rezone and then close on our home. That was painful but when we sold the home in 2000 for close to $300,000., we felt much better.

[Craig Vernon]

insight on housing costs in TV and financial discussion on finance v investing. Good Stuff thanks all!

[BrianL99]

Originally Posted by melpetezrinski

Did you just search for your post from months ago and copy and paste those links? I can search google and post countless links also to substantiate my stance but all you need to do is think about the decision I made..

A Leopard doesn't change its spots. I laugh every time I read the "ex-finance guy" line. I think I'm up to reading it, about 700 times now.

I once provided $10 in financing for my daughter's lemonade stand, so I guess I'm an ex-finance guy, too.

[NorineBerlinski]

Hi Craig, do you have any other statistics on home sales/prices, etc. you can share with us? Thank you for putting this together.

[Robnlaura]

Originally Posted by dewilson58

Sad if a retired person purchases in TV and has a mortgage.

That’s life for you

[Robnlaura]

It’s happening slowly but it will get a lot harder as they continue building the same boxes everywhere.. I look at used homes values and have to laugh at the current values..

[Dusty_Star]

Originally Posted by huge-pigeons

Why is it a good thing for an asset I own to come down in price/value so somebody else can afford to move here? Makes no sense at all!! That’s like saying it’s ok for my Apple stock to tank so somebody else can buy shares. I want all my assets to grow in value, and if somebody can’t afford to buy in this market, then they should look elsewhere

You are correct. It does not make sense, it only appeals to someone wanting to buy here, hoping for a lower price, then praying for prices to rise again once the house is purchased.

[Normal]

The Villages median price on a home from a year ago dropped 6%. Ocala’s median price dropped 9.2%. The crash is undisputed, speculators or investors are really the only ones that need to worry.

The Villages Housing Market: House Prices & Trends | Redfin

Ocala Housing Market: House Prices & Trends | Redfin

This brings great opportunities to bargain as a buyers and who should have been able to do that from the start. The inflexible will be left in the dust. Trending analysis demonstrates the downward movement till next Spring? Wages and inflation should push this in the other direction by Summer 24.

[Craig Vernon]

Originally Posted by NorineBerlinski

Hi Craig, do you have any other statistics on home sales/prices, etc. you can share with us? Thank you for putting this together.

If you go on YOUTUBE and look at Davids in Florida he does a weekly break down of real estate activity in TV.

[Craig Vernon]

Originally Posted by Dusty_Star

You are correct. It does not make sense, it only appeals to someone wanting to buy here, hoping for a lower price, then praying for prices to rise again once the house is purchased.

I disagree TV has a problem with speculators, flippers and AIRBNB short term rentals. The thirty percent increase over two to three years was a benefit to short term investors not full-time residents or individuals. TV has an excellent history of 6% a year in value growth if property values drop by 10% of the 30% they gained in the last few years it only takes incentives from short term investors and hopefully removes some of the speculators from the market. IMHO.