Lentinman: Here is why I think real estate is different.
1. You can't watch the price of your home fall from minute to minute. You don't wake up the next morning and see your house gap down 25K. It tends to slowly erode and people who have no need to move don't sell.
2. It is not easy to sell like stocks. Big commissions and long lead times to sell. Especially in a bad market, sales can take 1 year or longer even with price reductions.
3. Some people will always trade up, even in a down market, your house my drop in value, so will the one you lust after.
4. It's your home. And if it's your second home, most of the same problems exist.
I agree with the author and obviously not you that renting is not a good deal usually.
If my house went down 25% in value tomorrow, I would not be happy but I would still have a substantial free and clear asset that I feel would eventually recover. In my case I have no job to worry about or employer who could force me to move. Which of course would help your side of the arguement in most peoples case.
If I could easily trade the housing market I would, so I suspect would you.
Signatures are so yesterday!
