As I'm In The Middle of a Major Housing Renovation

A good, succinct reminder:

PL: Housing isn’t an investment. A home is an extremely undiversified bet on a single structure in a single neighborhood in a single geographic region. A home is illiquid and indivisible (you can’t slice off a piece of your kitchen to buy milk). Worst of all, a home carries high transaction and carrying costs. Historically home prices have barely kept up with inflation – and only if you continue to pour money into it for upkeep and maintenance, not exactly something you want from an investment. Housing is consumption.  

Looking at it this way will allow you to make better housing decisions. Something I painfully had to cut out of the book was research on the happiness derived from housing. The quick summary is you don’t derive much lasting happiness from your home. There is plenty of research, however, that says your commute time is correlated to your happiness. The implication is it makes sense to place a higher value on your home’s location than whether it has a remodeled kitchen or extra closet space.

Thinking about housing as consumption only makes academic sense. I actually think my dad put it better to me a long time ago - a house is a place to live.