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Savage wrote:

. . .cataclysms and wars have occured. So in this worse case scenario, depending on how long it took the
market to recover...if it did. It would be better to own your home.

Hummmm, things one would prefer not to think about. . .

Good point, Savage. However, most of the intangibles we have to deal with in paying off a loan early are not nearly as terrifying. Moreover, the misery can go both ways in some more common disasters.

It can also be better not to own before the bad news hits:

I remember in the 80's there was an oil shale boom here in Colorado. The population of the little town that was the center of the new industry (Rifle)swelled with well-paid workers all looking for housing, the cost of which shot up--driven by the new demand. When the oil industry later decided that oil shale production was not economical and shut down their development facilities almost overnight, a huge number houses came on the market and the prices fell to a fraction of what they had been worth. Unable to find work and faced with a move back to California or Texas to find employment, many people lost 10's of thousands of dollars on their home investment. The only ones who were able to keep their shirts were those who decided to pay what, at the time, seemed to be exhorbitant rents instead of buying, or who just walked away from their house loan--they had just made the minimum downpayment and weren't worried about their credit ratings.

I have heard similar stories of slumping house prices in Hawaii when the Japanese stopped buying vacation homes due to their economic slump and when towns that were dependent upon a military base or shipyard finally closed.

On the other hand, if I had bought a house in Silcon Valley at the beginning of the tech boom, things could be very different by now.

At least those poor people on the Atlantic coast who got their housing markets trashed by those big hurricanes were able to keep their jobs and wait till the markets recovered. Retiree's can do that too. For many, that makes owning your own home a little safer an investment the older you get.

In a sense, owning a large house is a lot like owning a large bond that pays a dividend of 'free' rent and has high maintenance fees.

Thinking about all this scary stuff almost makes figuring your taxes seem easier. 8^)

-- John

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