We previously discussed our thoughts on the question: Is a house a good investment?

We were interested in finding out what experts in the field as well as average people were thinking about a house as investment. A Google search brought a number of expert opinions (most decidedly negative) towards considering a house as an investment:

ExpertSome of Their ThoughtsMore...
Charles Farrell, J.D., LL.M. is an investment advisor with Northstar Investment Advisors in Denver, ColoradoThe basic return you get from a home is that someday you’ll get the mortgage paid off, and you’ll have a rent free place to live. That’s a nice goal for your retirement years. But remember, if it’s a big house, it will cost you a hefty amount just to maintain. That means less money to do other things you might find important during your retirement years.

Bottom line. Don’t commit a huge percentage of your income to buying an “asset” that may turn out to be a liability.		Is Your House An Asset Or A Liability? Read more: http://moneywatch.bnet.com/retirement-planning/blog/retirement-roadmap/is-your-house-an-asset-or-a-liability/2508/#ixzz1SZ8jSKHX
Robert Bridges, professor of clinical finance and business economics at the University of Southern California's Marshall School of BusinessIs it wise for coming generations to continue to view ownership as the cornerstone of personal finance? Young people planning for retirement increasingly face a choice between house payments and contributions to retirement accounts. They simply can't afford both. With the specter of looming cuts in Social Security and other entitlement programs, or even possible systemic insolvency, the challenge for tomorrow's retirees is income self-sufficiency.A Home Is a Lousy Investment
The EconomistThe one advantage a home might have over other kinds of investments is that a typical person can leverage up, which isn't possible with most other forms of consumer investment; no bank will lend you four times your salary and ten times your equity investment to buy a stock portfolio. This means that much larger gains are possible in a climate of home price appreciation than would be the case in, say, a rising stock market.A home is a home
Carl Richards, certified financial planner in Park City, UtahSo part of the reason people who lived in the same house for 30 years claim their home was their best investment comes from it probably being the only investment they actually held for 30 years. The power of compound interest, even if the return is just over inflation, is amazing, but only if you actually let it compound.Maybe Your Home Really Is Your Best Investment
Karen Pence, head of the Federal Reserve’s household and real estate finance research group

  1. Unlike stocks and bonds, you can’t dump only part of a home to generate cash. “You can’t just slice off your bathroom and sell it on the market,” Pence says.


  2. Homes constitute undiversified investments. You’re betting on a single neighborhood.


  3. Selling your home is expensive thanks to broker fees, mortgage fees and moving costs.


  4. While it’s easy to take money out of your home when prices are going up, it’s difficult to do so during declines, when refinancing terms are strict.


  5. Your home price is dependent on your neighbors’ employment status. When they’re out of work, home prices in the neighborhood often drop.

Top Fed Official: Housing Is a Terrible Investment

Jane Bryant Quinn succinctly captures the view of many experts: "Homes are a lifestyle choice, not a good investment – even with the tax deductions."

What about the opinions of average people?

Fannie Mae, the quasi-public government-sponsored enterprise (GSE) whose mission is to provide liquidity, stability and affordability to the U.S. housing and mortgage markets, periodically conducts a national housing survey. The most recent published survey was conducted between January 2011 and March 2011.

While the number of Americans who perceive homeownership as a safe investment has been declining (from 83% in 2003 to 66% in first quarter of 2011), 57 percent still believe that buying a home has a lot of potential as an investment, more than any other investment tested.

According to Fannie Mae's survey, a majority of Americans (66 percent) continue to believe that buying a home is a safe investment, although this has been trending steadily downward and is 17 points lower than in 2003. Housing, once considered the safest investment, now ranks behind putting money into a savings or money market account (76 percent) or into an IRA or 401k plan (67 percent).

graph showing peoples views of their house as investment

A house is still considered a "safe" investment by most people, but the trend is decidely downward.

What do you think of your house as investment? We've posted a survey form nearby where you place your vote. Also, feel free to tell us your thoughts in the comment space below.

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