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Comment by ilikerashers | Hacker News Reader

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ilikerashers·

You're equating buying a house to buying a lottery ticket. These are opposite ends of the risk scale.

These are not alike in any way.

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Ten years ago a lot of people learned that housing is not as safe as they thought.

It actually is. You just can't be over-leveraged. The bank will give you waaayy more money than should ever responsibly be taken. Combined with emergency savings, you are quite safe as a homeowner.

Yes if you stay within your limits. But if you start loading up on debt because of low interest then things can go bad very quickly. So the advice go stop saving is bad.

And how do you bid in a market where every house has >1 bidder and banks are lending waaayy more than is responsible?

This! The housing market seems to have punished anyone with a conservative financial mindset.

It forces you to fight with the least conservative, and the banks pour on more and more credit to appropriate ever greater swathes of national surplus.

No doubt someone will say "you don't have to buy", but then you have to rent. Forever. Because they keep bailing out housing.

No. They learned that buying a house with ridiculous terms and unlimited downside is not as safe as they were deluded to believe. Even in 2008, most people paid their mortgages, and were fine, housing wise.

I agree that lotteries are close to one side of the risk scale but real estate is closer to the middle than to the other extreme. The other extreme is U.S. treasuries. The last recession was a great illustration of the risk inherent in real estate.

And the US treasuries won't even keep up with inflation. If you invested yesterday you'd need to lock in for at least 20 years before you got even 1% return.

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