How much did he overpay? Compared to what? Imagine if he had put that money into Microsoft stock. Assuming a 20% down, he put down 30k. Now I dont have the exact multiplier, but if I remember right 10k in 1991 in microsoft stock is now worth 900k. So, it could be worth 2.7mil if he invested another way. That is about 9 times more than the value of his house. Sounds like a bad investment to me.

My point isnt that anything that wasnt the best investment ever is underperforming or anything. My point is that hind sight is 20/20 and we all remember the successes. Imagine if he had lost his job back in 1996. There is no way he could have known that he wouldnt lose it in 1991. So in 17 years things worked out for him. Good for him. I have a feeling that it is a safe bet that in 2025 RE prices will be nominally higher than now. Id guess that cars, tennis shoes, and lollipops will be more expensive too.

Work inflation into this guys return and it isnt all that great. We need to take into account the fact that this investment also fulfilled a basic need of shelter, so the return has been better than the numbers show. But still, to me this shows that in the long run housing acts like gov bonds, sure it all goes up but the return just isnt that great.