Reply #40: it depends if it has really lost value, or not [View All]

[hfojvt]

It would be nice to sift through the housing statistics some. If a person buys a house for $90,000 and it's value appreciates to $400,000 in a decade and then suddenly plunges down to $150,000 a person may feel like they have lost $250,000 in wealth (and in some sense they have) but they are also really still ahead $60,000 plus whatever equity they have in the original $90,000.

Back in the days of the real estate boom, that seemed like a decent option. If you bought a house for $100,000 (say) and it suddenly appreciated to $300,000 in a fairly short time (like 5 years or so) then sell the darn thing and take you $200,000 profit to Lawrence, Kansas where you can buy a decent house for $80,000 and still have a $120,000 nest egg. I'd certainly do that in a heartbeat, but I am also the guy who withdrew his name from a job I wanted (statistician for the USDA), because they threatened to move me to California in a year.