Real Estate: An Investment or Just a Place to Live?
| May 17, 2012
A recent article by a an American pundit predicts that housing prices in the U.S. will never recover, and in fact, except for the boom of the mid-2000s, housing prices have remained relatively flat for the last century. Right now, with inflation taken into account, U.S. housing values are equivalent to 1895 levels.
The implication of this startling conclusion is that property may not be the strong, long-term investment it has often been positioned as. The article does not discourage buying property however, instead it argues that “… buyers should stop focusing on the vague hope that house prices will jump from here and focus instead on the functional value houses provide for the money.” In other words, buy your house for shelter and comfort, not as an investment.
In Alberta, real estate values plunged in 2008, but not nearly enough to offset the increase in home prices experienced in the boom years in Alberta.
Are single-family homes still a good investment in Alberta or should consumers start thinking of their house as “only” a home? What would you prefer – a home that is functionally perfect for your family or one that is less functional, but appears to be a good investment?
