Many people assume that a house is good investment but it is only good investment if one can flip it or buy it as a rental property, most people are not in this category. Lot of people Investing or buying for longer period, which is not wise investment.
For home prices variations, largely depends upon the supply and demand. As prices rise, companies build more houses and the supply floods the market, keeping prices down.
Home is a dream for everyone and we have our own exceptions, a wonderful setting of one's life, and a place one can enjoy in privacy and comfort. As an investment, though, it is essentially illiquid, and its rate of return is no sure thing. Home prices is rising and might keep the pace as the unemployment rate lowers and income level increase in a house hold but perhaps, not as some investors hope because wage growth keeps pace with rising real estate values. Sadly, this is not happening now.
Housing market is very speculative and no one knows which way the price go from now. Buying a house for investment can be related to buying a car, after 20 years the prices depreciate it might be that no one wants your car when new styles and models are available with easy money. Any homeowner knows that you can't sell a home with 30-year-old roofing, carpet, and kitchen appliances. Sure, the home price might go up, but you have to adjust for years of maintenance and renovations. After few years the trend or style changes then the value depreciates.
As i conclude i would point out what Robert Shiller (an American Nobel Laureate, economist, academic, and best-selling author. He currently serves as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center for Finance) says about the housing as investments ''Absolutely! Housing traditionally is not viewed as a great investment. It takes maintenance, it depreciates, it goes out of style. All of those are problems. And there's technical progress in housing. So, new ones are better...''
