It's cool on their skin

E-word,

Sorry if I sounded preachy there. I've been pretty obsessed lately with the real estate market across the US, and how so many people fool themselves by thinking they are building wealth by purchasing real estate. It certainly makes sense when rent and mortgage prices are similar, and when you're planning to stay for the long haul, but otherwise people are really fooling themselves. The term 'house poor' (which is a shortening of 'house rich, cash poor', at least for me. I'm not sure if it's commonly used) applies for far too many people. In my opinion (and please, dissent if you think I'm wrong!), there is nothing more dangerous than overextending yourself on a mortgage, or having all of your money tied up in the house you own, or both. People should not feel pressured to buy a house, because at inflated values, the tax benefit from homeownership is cancelled.

Ugh, I'm getting distracted and discombobulated. In short, how wealthy really is someone who owns a 600k house if all his cash is tied up in the house, and the mortgage payments are such that he can't go on vacation? Real estate investing is just like stock investing, and so we know that periods of unbelievable growth are followed by periods of painful stagnation, so people who think they are wealthy just because their house appraises for 2-3 times more than they paid need to chill out, because it's not something they can just liquefy like you can if you have cash. Plus they're idiots if they don't remember the dotcom crash. that was just a couple of years ago, but it's like it never happened.

Also, a thing I'm noticing that parallels the stock market bubble is the fact that people are greedy, thinking prices will go up and unwilling to lower prices even when houses aren't selling, assured that their price is justified and everything will keep going up. It's crazy, the greed is going to fuck these folks up. As if making say, 20k isn't enough, they have to make 30k! Dumb.

Anyway, off of the soap box. I'm all over the map anyway. I hope your day is going well, and my manic outburst didn't freak you out.