sfobserver is right on, and I also agree that equity was not double counted in the initial example. But there are many other costs that make up for the accumulated equity. I mean, the example was for 30 years, and don’t tell me it doesn’t cost continuously more than a few hundred dollars per month if you include occasional remodeling. I have never owned a house, but it is apparent to me what some friends spend time and money on their houses.
REGARDLESS OF ALL THAT:
The main point I think is the one Rich points out in his bubble primers: Houses do occasionally trade at bottoms in terms of mortgage/rent or price/income. You just can’t afford to buy at the top of the range and then see it drop to the bottom. The loss is just too great (unless you don’t care about the money), and will be there regardless of most twists of comparing costs.
