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0 pointsPopAlongKid1y ago0 comments

>It's hard (even for successful, intelligent people) to wrap their head around the fact that their $1m house that ballooned up to $2m over the last 25 years has in fact, lost value.

Anything to back that up? I spent some time searching online and every source strongly disagrees with your assessment of house prices vs. inflation. And the tax argument also fails here, since two people who own a home can exclude half a million realized gain from tax altogether, or leave it entirely tax free to heirs.

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dirtdobber1y ago

Not saying a home isn't a good investment. But on average, home prices have risen 4% y.o.y. in the US. Inflation target is 2% but is much closer to 4%. If you sell your house for $1m more than you bought it for, you can exclude 500K from capital gains, but you're still paying cap gains on the other 500K.

Bottom line: assume a 1% real profit y.o.y. on your home, then factor in closing costs (8%), and. then cap. gains on the profit. You didn't make as much as you think.

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dirtdobber1y ago

Bottom line: assume a 1% real profit y.o.y. on your home, then factor in closing costs (8%), and. then cap. gains on the profit. You didn't make as much as you think.

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