Wall Street Journal, Your Home Isn’t the Nest Egg That You May Think It Is:

"economic studies have demonstrated over and over that houses (1) cost more than most people make when they sell and (2) rarely match the long-term returns of stocks or other investments."

"the costs of owning a home -- buying it with a long-term mortgage and then paying taxes on it, insuring it, repairing it, renovating it -- sap most of what most homeowners think they make in price appreciation."

"And that's doubly true today, with much of the U.S. well into a real-estate recession. It's unlikely that homeowners in once-booming areas will see a return of skyrocketing prices anytime soon."

"It may be late for a lot of homeowners to read this, but here it goes anyway: It's risky and bad planning to have too much of your net worth in your principal residence. No prudent stock-market player would put 60% or 70% of a portfolio in just one stock, but millions will hold that much or more of their total net worth in just one house."

"the typical buy vs. rent argument clouds the more important point: A house is an inefficient way of building wealth."

"Mortgage interest is rent that you pay to your lender for the use of its money rather than to a landlord for the use of his house."

" "I have to pay something" is a rationale that home buyers use for going deeply in debt and paying tens or hundreds of thousands of dollars in interest to buy a house that, they mistakenly believe, will make a big profit for them down the line."

"you almost certainly lost some investing opportunities along the way while you were spending your money buying the house."

"If you don't already own your own home, do the math. Don't buy if you think you'll be moving in just a few years. Don't buy a house that's too big for your needs or so expensive that you will strain to pay for it simply because "it's a good investment." It's not."

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The Motley Fool, The Worst Investment Ever:

"A house is a place to live, not a road to riches."

"Think about it for a minute. What characteristics do Fools look for in a great investment? Positive cash flow, low expense ratios, low transaction fees, and historically proven returns. Using these criteria, the average house falls well short of the all-time best."

"Those who think renting is "throwing money away" should consider that mortgage interest, maintenance, taxes, and insurance are also "thrown away." Having a place to live costs money no matter what, and a rational evaluation of your local market should let you know which one is a better value."

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SmartMoney.com, Renting Makes More Financial Sense Than Homeownership:

"Shares have been remarkably consistent over the past two centuries in their 7% real returns.

The average real return for houses over long time periods might surprise you. It's zero."

"House prices and rents have been closely linked throughout history, with both increasing at the rate of inflation, or about 3% a year since 1900. A house, after all, is an ordinary good. It can't think up ways to drive profits like a company's managers can. Absent artificial boosts to demand, house prices will increase at the rate of inflation over long time periods for a real return of zero."

"So to sum up why I rent: Shares right now cost 16 times earnings and over long time periods return 7% a year after inflation. Houses right now cost 19 times their "earnings" and over long time periods return zero after inflation. And they look likely to return less than that for a while."

Note: Continue to page 2 where the author addresses questions and objections such as these:

"Are you saying I should sell my big house and rent an apartment instead?"

"No, unless you have more space than you need and moving wouldn't be disruptive to your family, and you want to cash in on recent housing gains, make more money over the next couple of decades, use less energy while simplifying your life, and you don't mind seeming odd to friends. In which case, yes. But really, I'm not trying to win anyone over. Strong demand for houses keeps my rent cheap."

"Renting is for poor people."

"True. But it's for rich people, too. The average renter makes about $34,000 a year, but while the percentage of renters declines after incomes exceed $20,000 and rents exceed $600 a month, it jumps again once incomes top $150,000 and rents top $1,200 a month. In other words, poor people rent modest apartments for lack of choice. Middle-income people buy houses. High-income people, presumably with a dose of financial savvy, often rent nice apartments instead of buying."

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CNN Money, Stocks vs. Real Estate:

"Yale finance and economics professor Robert Shiller, author of Irrational Exuberance, who looked back to 1890, contends that only twice has real estate produced truly outstanding returns: after World War II, when returning troops were starting their families, and from 1998 to 2005, a period he thinks is a bubble.

Housing's rate of return, he argues, has to trend back to the mean of about 3% a year - barely above the inflation rate. If that's starting to happen now, he says, we could be facing many years of losses."

"What leverage gives you, transaction costs take away.

In their study, Francis and Ibbotson didn't deduct such costs when they calculated returns. Had they, real estate would have fared worse. Stocks, by comparison, are incredibly cheap to own and sell."

"Some folks may thrill to the drama of termites and broken pipes, but that's a pretty small group. If you consider such events nuisances, you're better off sitting in a plush chair and choosing from a manageable list of big, well-know stocks"

"we're still a ways from knowing whether the current slowdown in the housing market is about to end or is only getting started."

"Stocks roll up large margins of victory in performance, costs, diversification and effort you need to expend as an investor.

Real estate's only big win is in leverage. Using that leverage to buy a home you can afford makes sense. You're building equity and collecting other benefits as well. (And no landlord can stop you from owning a big, hairy dog or throwing a party for 200 of your noisiest friends.)

But jumping into the real estate ring thinking you'll use others' money to score an investing knockout is plenty risky. And the big prize, as you may have noticed if you've tried to flip a condo lately, is more elusive than it might have seemed."

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Priced Out Forever, Renting vs. Purchasing:

"I will be the first to say that buying is a good idea if you intend to live in the house for the bulk of the mortgage period, you can afford it, and it is viewed as your nest, rather than your nest egg. If you are a transient, or you are trying to save for retirement by living in your 401(k), you might get lucky and you might get ruined. Houses are homes. They should not be investments."

"Real estate, like stocks, always goes up in value. It is a great investment, and the way for normal people to build wealth. At least that is what the Real Estate Industrial Complex (REIC) wants you to believe. They don't make as much money if you are skeptical."

"The REIC makes a lot of money fomenting a bubble."

"Is a home a good investment? If by investment you mean that it throws off the dividend of a place to call home, then yes. Renting provides the same benefit. If you are seeking a "forced savings program" and capital appreciation, you might be better off with payroll deduction and a quality, value oriented, contrarian investment portfolio."

"People always forget that using borrowed money for investing (whether it is a brokerage margin account or a mortgage) is leverage. Leverage works both ways. It amplifies your success or failures. What turns 4 walls and a roof into the American Dream is the same mechanism that makes it your financial coffin."

"Home ownership brings certain benefits like some level of sovereignty over the use of the property and any ephemeral value from "pride of ownership." It also brings other pitfalls, such as illiquidity, maintenance, acts-of-God, or even your overweight, aging hippie neighbors that insist on walking around naked as they oscillate between the hot tub and the "herb" garden.

Renters may need more than just the consultation of a sledgehammer and a case of Mickey's Big Mouth to knock out a wall, but if a heavy-metal band moves into the house next door, they can give notice, pull up stakes and move into a nicer home. If a renter gets transferred, they don't have to put up with the agonizing process of selling a home in a squishy market, and then paying 7%+ to the REIC. At worst, they lose their deposit and move on."

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Get Rich Slowly: Renting vs. Buying: The Realities of Home-Ownership (guest post by Tim Ellis, author of Seattle Bubble):

“Owning your own home is a forced savings plan.”
As you can see above, if home buying is like a savings plan, it’s probably the worst savings plan on Earth. Would you voluntarily sign up for a savings plan where well over half of the money you deposit in the first 20 years simply vanishes, and from which you can only withdraw money by relocating and paying a 6-9% fee (not on the amount you have “saved” mind you, but on the total sale price of the home)? Of course not. That doesn’t sound anything like a savings plan."

"If our potential homebuyer has that $85,000 saved up for a down payment and deposits it along with just half of the monthly savings over buying ($578 per month) into an account at 8% interest, the balance will be nearly $300,000 in just 10 years. That’s a liquid investment, that can be used for whatever you want, no relocation required. Buying a home is not a savings plan. Actually saving money every month is a savings plan."

"..in order to cash in on any “wealth” you build through your home you will need to sell that home and move. No, “extracting equity” does not count, since that simply results in a larger debt. Debt is not equal to Wealth."

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Consumerism Commentary: The Cost of Buying a Home Over 30 Years

"Would invest $300,000 in an index mutual fund—averaging anywhere from 8% to 10% over 30 years—if over that 30 years, you had to pay $710,000 in fees? Well, that’s what you’re doing when you buy a house."

"..if you plan on moving within 7 years like the average homeowner, renting and investing the funds you would have otherwise used for a down payment would be a better financial decision. Not only that, but with a long-term mortgage in which you’re paying almost exclusively interest to the bank on your mortgage, you’re just renting your house from the bank. And you still have to pay all the maintenance costs, taxes, and everything else.."

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New York Times: A Word of Advice During a Housing Slump: Rent:

"..buying has never been quite as beneficial as Realtors — and mortgage brokers, home builders and everybody else who makes money off home purchases — have made it out to be."

Hey, I'm not anti-Realtor (there are enough of those on the net already) nor am I anti-salesman.  But be who you are and don't step into a role that you are not (financial advisor) without any integrity.  In a few years, people will remember what was said on the way down and you can get some potent anti-referals for the survival methods you are presently employing.

 Mr. Tilghman, you can get a house for the lowest prices in years?  What the last three years?  This graph indicates that now is a good time to buy?

http://mysite.verizon.net/vodkajim/housingbubble/baltimore.html

http://mysite.verizon.net/vodkajim/housingbubble/

Mr. Kelly, you should be proud of all the money you made in stocks, I heard it all the time in the late 90s, what people were making.  Later nobody talked about the losses exept in whispers.  Several years ago, everybody was talking about the money they made in real estate (well so was I).  Now who's talking?  Nobody exept the renters and the paid shrills.  I can't even talk about renting and where the good deals are in public for risk of offending people who so easily let themselves be led astray.

Whatever the economy does, no matter how bad it gets, people will buy and sell.  Speak the truth, find out the uncomfortable facts and the buyers will come to you.  Every Realtor I'm going to interview when I buy my next house later this spring was identified on blogs such as this.  Spit out lies now and they will live on the web forever, just ask David Lereah or Lawreance Yun.