The point here is that we don’t really know what the future will bring. Market timing is foolish. Other than that, we do know that today (2005-2006) is a bad time to buy a house. When will it be a good time? That’s anybody’s guess. The best I can do is buy when it makes sense to me, both financially and personally, and not expect to time the market so that I can make a killing.
It was misguided treating your house as an investment vehicle on the market’s way up (all those GFs inflating prices more and more). Now that the bubble has bursted and we have x years of depreciation ahead of us, it’s still not a good idea to think of your house as an investment.
PD made the point that perhaps houses were too undervalued in 1920-1945. Perhaps. But a similar argument could be made of 1980-1997: that high interest rates and a booming stock market had kept money away from housing, making house prices artificially low, and that only in 2002-2004 prices reached their “true” level. I don’t believe the latter is the case. The point is that making predictions is very difficult, especially predicting the future, as Yogi Berra said.
