Quote:
Originally Posted by DCReid
I don't agree with the analysis about real estate and stocks. Most Americans view both as wealth building, and probably more so their house. Most do not think their house is just shelter, and I hear it all the time down here in S Florida as owners talk about the house next door going for XXXX and selling in a few days. As for stocks, I think that the mentality is bordering on speculation now, especially in the US market, which has been in a bull market for nearly 12 years due to the euphoria over new tech while most others markets have lagged. Canada's stock market is preforming mostly similar to other non-US markets, but its US tech listed companies like Shopify have performed like US new tech. The cryto craze and electric car stock craze is just more evidence of US tech euphoric mania. Who knows when it will end, but it eventually does. Afterall, there was a Japanese euphoric mania in the 70s and 80s....remember Panasonic, JVC, Akia, Sony....for US remember IBM, Digital Equipment, Iomega (famous Zip Drives - that stock was always going up on Nightly Business News broadcast in the 80s/90s) and Kodak....
But this is not about stocks, it's about Toronto and Vancouver prices...Vancouver seems to have benefited from its west coast location - all large West coast cities in the US are expensive. And maybe Toronto is so expensive because it is the economic and cultural center of Canada, like NYC in US and other European cities.
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No, housing has historically been a very poor investment in the U.S. relative to stocks, going back since, well, ever.
1970:
Median Home Price: $27,300
Current Value if invested in home: $453,300
Current Value if invested in S&P 500: $1,112,759
Current Value if invested in NASDAQ: $2,631,000
1980:
Median Home Price: $73,600
Current Value if invested in home: $453,300
Current Value if invested in S&P 500: $2,036,000
Current Value if invested in NASDAQ: $4,688,000
1990:
Median Home Price: $149,500
Current Value if invested in home: $453,300
Current Value if invested in S&P 500: $1,700,480
Current Value if invested in NASDAQ: $5,155,000
2000:
Median Home Price: $202,900
Current Value if invested in home: $453,300
Current Value if invested in S&P 500: $577,000
Current Value if invested in NASDAQ: $1,058,000
2010:
Median Home Price: $275,300
Current Value if invested in home: $453,300
Current Value if invested in S&P 500: $822,000
Current Value if invested in NASDAQ: $1,337,000
Even if you invested at the height of the Dot.com bubble in the year 2000, you would have still made $600,000 more in profit by investing in NASDAQ than through real estate.
If you've been treating housing and stocks as equally fruitful investment vehicles, then you've been making a colossal mistake.