Shiller discussing who should buy a house – those who have stable employment!
Robert Shiller, an economist at Yale, won a Nobel Prize in 2013 for his analysis of asset prices, and his name is half of the much-watched Case-Shiller Index of housing prices. It turns out, he’s not too enthusiastic about home ownership, either as a lifestyle choice or an investment. Buying a house is “like a consumption choice, it’s not really an investment,” he tells Money magazine’s Susie Poppick in the video below.
Jim, my “tech guru” son has VERY stable employment. At the age of just 29, he makes over 6-figures. Not here to brag. On bubbleinfo, it’s all about real estate.
I encouraged him to buy something and live in it for two years because real estate where he lives is increasing by leaps-and-bounds. Won’t do it. Doesn’t know if he will be staying in that city long-term. So he continues to rent.
But there’s hope. He and his sister decided to live together. Right downtown–where they love it. Daughter already moved in; he moves in today. Have a 1-year lease from June 1st.
He pays more of the eye-popping rent: $1,800/month for 2/1 and 749 sq. feet. Crazy, right? But newest listings for 1/1 639 sq. foot apartment in same building has increased to $2,050 in last month. It’s a college town.
Why am I happy? If he shares the rent, he’ll save more for the whopping down payment since houses are going for over $500/sq. foot. He recently told me what he has in checking and savings. My jaw dropped. It’s more than me…
Susie,
The best tech housing story I’ve ever heard was about a guy that lived on a boat in the SF Marina. His boat cost 50k and the slip was $500 a month. He walked downtown every day to hang out with friends and caught the bart to work in SJ. He changed boats every 5-6 months and upgraded. All the rest of his 150-200k salary went to his piggy bank.
Regarding Shiller…
I find it amazing that people give him the time of day. Nothing he says is earth shattering and he gives himself 3 months lag time to make his market comments. I like how he’s able to talk from both sides of his mouth but never to far one way or another. Just enough to stay on the radar and get quoted + make $$$.
And none of the interviewers ever question his statements – just take them at face value and keep moving.
Shiller, I thought I was the only one who thinks he gets way too much attention LOL.
Tech savers, I like the story of the google employees with fake home addresses who actually live at the facility LOL. (free food, free sleeping area’s, free laundry), what a life LOL.