Price of home = $100k
Down Payment = $20k
5% DEPRECIATION = -$5K
Annual return on investment = -$5K/$20K = -25%

Why would you want to be in the market during a down cycle? Take San Diego for instance which just experienced a drop in 2006 that exceeded the ENTIRE early 1990s bust.

Historical Homes Prices of 50 Major US cities

I mean to invest $20,000 in the stock market you have to invest $20,000. Currently a $20,000 down payment gets you into anything from a $100,000 to even $400,000 dollar house depending on the mortgage.

Then when the house rises in value you get a pretty decent return on your investment. Not to mention you aren’t paying rent.

But I do think that your commentary is loaded. The article never said to sell your home and live in a mutual fund. Tons of studies have shown that equities do better than real estate over the long haul. This is just another one pointing out this fact. You can be distrustful of the results, but this is not the first organization to publish these types of results.

Secondly, Fidelity sells tons of stuff tied to real estate. You want those gains? You can get GSE bonds, you can buy home builder stock, you can buy durable goods stocks. You can even buy ETFs for commodities that run up during housing bubbles. The financial sector (Fidelity included) has done extremely well during the real estate run-up.

I think it’s time that Fidelity and other companies start singing from the hilltops. So much of this country is convinced that they should go way over their heads in debt to get on the real estate gravy train and they don’t understand that the last ten years have been an historical, statistical anomaly.

I will keep my salt.

First of all I do not sell real estate, so you can hold on to your salt.

Second, I am as distrustful of NAR as I am Fidelity as I am of Cigarette companies when they put out studies.

I think that real estate as a long term investment is a viable part of anyones investment strategy. Housing does appreciate and provides both financial and intrinsic benefits over the long term.

Personally I am invested in both real estate and stocks, and both have had their ups and downs but the diversification has done very well for myself.

I vehemently disagree with the statement that it is irresponsible to point out that a study paid for a company in one market sector that takes aim at another should be looked into carefully and taken with a grain of salt.