Half of Americans are saving next to nothing

[spookyturtle 9,465]

Damn, I been doing it wrong. Can I deduct the 100K from my taxes?

Well, it was a loss, so you should be good to go.

[OriZ 3,157]

Three simple questions that any child should be able to answer.

Are prices today lower than they were in 2006? If the answer is yes, is it safe to say that prices went down since 2006?...

If the answer is yes, would it be accurate to say(not talking about whether the statement itself is true or not which it very well may not be and is yet to be seen, but rather the wording of it) that imho, prices are not done going down? Of course, it is simple logic.

But, some people just can't grasp even that, which makes one wonder; How did humans ever evolve beyond hunting mammoths and carrying a club?

[spookyturtle 9,465]

Three simple questions that any child should be able to answer.

Are prices today lower than they were in 2006? If the answer is yes, is it safe to say that prices went down since 2006?...

If the answer is yes, would it be accurate to say(not talking about whether the statement itself is true or not which it very well may not be and is yet to be seen, but rather the wording of it) that imho, prices are not done going down? Of course, it is simple logic.

But, some people just can't grasp even that, which makes one wonder; How did humans ever evolve beyond hunting mammoths and carrying a club?

But they've much higher than they were in 1932. I think I'm gettin' now.

[OriZ 3,157]

But they've much higher than they were in 1932. I think I'm gettin' now.

You just go play in the snow

[spookyturtle 9,465]

You just go play in the snow

It's melting. I can actually see some of my lawn. And it did snow here all day Saturday, but it didn't accumulate at all. Tomorrow's April 1st, I've had enough snow!

How's Gary? :devil:

[OriZ 3,157]

It's melting. I can actually see some of my lawn. And it did snow here all day Saturday, but it didn't accumulate at all. Tomorrow's April 1st, I've had enough snow!

How's Gary? :devil:

Wow! You can actually see part of your lawn, that's amazing. Yes it's April 1st tomorrow and it is 27F here tonight and supposed to go below 20 By the time the sun rises. But hey, spring is in the air!

Isn't Gary still in Ankara?

Edited April 1, 2015 by OriZ

[spookyturtle 9,465]

Wow! You can actually see part of your lawn, that's amazing. Yes it's April 1st tomorrow and it is 27F here tonight and supposed to go below 20 By the time the sun rises. But hey, spring is in the air!

Isn't Gary still in Ankara?

Lying on the beach, soaking up the sun.

[GandD 5,966]

78 degrees here this afternoon. Enjoy your snow and inflated house prices Yankees.

[OriZ 3,157]

I think the last time we had 78 degrees was what, 6-7 months ago?

[Teddy B 17,252]

It's melting. I can actually see some of my lawn. And it did snow here all day Saturday, but it didn't accumulate at all. Tomorrow's April 1st, I've had enough snow!

How's Gary? :devil:

If your lawn is not as green today as it was in July of 1974, then your lawn is in serious decline. Sell your lawn now and cut your losses. I hear coal fired steam engines are going to be the new economic boom, prices are on the rise because they cost more today than they did in 1892. Put everything you have into coal fired steam engines. If you really must diversify than you might want to look into asbestos stock.

I think the last time we had 78 degrees was what, 6-7 months ago?

Does that mean temps are on the rise or the decline? Should I buy or sell?

[DavenRoxy 1,073]

Going down? Home prices have been rising steadily for a few years now. There is a home shortage going on right now. There are 3 or 4 buyers for each home on the market causing bidding wars, and homes are selling for more than asking price. Home prices are going nowhere but up.

I reckon that all depends on where you live, eh? In my locale, there are multiple (I know of at least 8 myself, and there's probably a lot more than that, since I haven't looked all over the area) brand new, modern homes that are sitting empty after building. Some for more than two years. The 4-bdrm house next to me (13 years old now) has been empty for over 2.5 years. And the strange thing is, no one seems to be dropping the price of these homes to move them. I guess they'd rather sit on them, paying interest each month, and hope for someone to buy them.

OTOH, I know the Seattle area has been selling houses like hotcakes for the past two years or more.

[Teddy B 17,252]

I reckon that all depends on where you live, eh? In my locale, there are multiple (I know of at least 8 myself, and there's probably a lot more than that, since I haven't looked all over the area) brand new, modern homes that are sitting empty after building. Some for more than two years. The 4-bdrm house next to me (13 years old now) has been empty for over 2.5 years. And the strange thing is, no one seems to be dropping the price of these homes to move them. I guess they'd rather sit on them, paying interest each month, and hope for someone to buy them.

OTOH, I know the Seattle area has been selling houses like hotcakes for the past two years or more.

Of course it depends on where you live and where the real estate is located. I'm sure the housing market in Detroit or Ferguson isn't doing all that well right now either. My statement was in regards to over all home values across the US, they are and have been rising steadily for the last few years.

[LibCampFireClub 635]

As it turns out, the illusion of home purchase as a good investment is exactly that; an illusion.

Americans vs. Reality: Why Your Home is Not a Good Investment

I've come to believe that for millions of Americans, a house is a large liability masquerading as a safe asset.

Not just because of the recent housing crash, although what an eye-opener that was.

But because after watching real estate implode last decade, the average American still believes their home will make a great long-term investment. The best long-term investment, even.

As my colleague David Hanson wrote last week, a recent Gallup poll shows that Americans now believe housing is the best long-term investment, beating out stocks, bonds, and gold.

They might be right, only because the average stock investor does so poorly that a home may indeed be their best investment. But housing has historically been a terrible bet for people who think it will return more than inflation. To show you what I mean, I have to tell you about my visit to Yale economist Robert Shiller's office a year ago.

Shiller -- who won the Nobel Prize last year -- is regarded as the world's foremost housing expert. He has married historical data with deep insight into human psychology to offer some of the best housing analysis anyone's ever produced.

Not only is Shiller brilliant, but he's one of the nicest guys I've ever met, easy to talk to and puts things in clear, easy-to-understand language. As we sat in his office eating donuts and drinking coffee, I asked him, in the broadest terms I could, what homeowners should expect out of their homes in the long run.

"The housing boom in the early 2000s was driven by a sense that housing is a wonderful investment. It was not informed by good history," he said. Most people now agree on that much.

"If you look at the history of the housing market, it hasn't been a good provider of capital gains. It is a provider of housing services," he explained.

By that, he means a home gives you a place to live, a place to sleep, a place to store your stuff.

But that's it. Americans believed -- and still believe -- that the value of their home will increase above the rate of inflation.

And that, Shiller says, is wrong.

"Capital gains have not even been positive. From 1890 to 1990, real inflation-corrected home prices were virtually unchanged."

Shiller -- a pioneer of behavioral finance and one of the calmest, levelheaded economists I know -- becomes animated at this point, almost irritated. Debunking the notion that housing is a great investment is one of his favorite topics.

Housing prices, he argues, could decline over long periods of time -- decades, even.

"Why is that?" he asks me. I really don't know.

"Well, I think you have to reflect on the fact that it's done it before. Home prices declined for the first half of the 20th century [adjusted for inflation]. Economists discussed that back then. Why are they going down? The conclusion was ... of course home prices go down. There's technical progress. They are a manufactured good. Back in 1900, homes were handmade, you know, craftsmen. But now, in 1950, we can get all kinds of power tools and prefab. And [construction workers] were just better in 1950 than we were in 1900. So of course prices will go down."

Shiller also mentions that certain homes go out of style over time, dragging down prices. "What kind of houses will they be building in 20 years?" he wonders aloud. "They may have lots of new amenities. They will be computerized or something in some way that we can't anticipate now. So people won't want these old homes."

His animation peaked with a line I'll never forget.

"To me, the idea that buying a home is such a great idea is just wrong. They may very well decline for the next 30 years in real terms."

Real home prices may decline for the next 30 years.

The best thing about Shiller, and what sets him apart from your typical pundit, is that he has data to back up every point he makes.

In the early 2000s, Shiller wanted to see what nationwide home prices looked like over the long term. He was shocked to learn that no one had ever actually put that data together.

He dug around in libraries, crunched the numbers, and came up with an index that measured nationwide home prices going back to the 1890s.

This was a first. "The strange thing is, nobody else had ever made a plot like that. I can tell you, no one had ever seen that picture," he told me, shaking his head in disbelief. "People plot all kinds of data. Why wouldn't someone have done that? I still haven't figured it out."

The chart, measuring nationwide home prices adjusted for inflation, was this one:

http://www.fool.com/investing/general/2014/05/02/the-uncomfortable-reason-your-home-is-not-a-great.aspx

[spookyturtle 9,465]

Of course it depends on where you live and where the real estate is located. I'm sure the housing market in Detroit or Ferguson isn't doing all that well right now either. My statement was in regards to over all home values across the US, they are and have been rising steadily for the last few years.

They don't live in MA where liberal Democrats rule and unicorns fart rainbows of gold.

[decocker 7,198]

They don't live in MA where liberal Democrats rule and unicorns fart rainbows of gold.

unicorns fart the rainbows, leprechauns fart the gold.

just keeping it real.