Another problem with real estate, just like the stock market, is that too many people buy their houses counting on them to appreciate. True, for the last few decades, everyone got happy because selling their old house made them money in a big way. No one of this time period figured on their houses losing value, but they can and do. Other people bought multi family houses and apartments, and made a killing turning them into overpriced condos (well at least they were cheaper to buy that the traditional starter homes). Those smart greedy people used up a lot of cheap older apartment housing in the condo conversion wave. And now in order to get more affordable housing on the market, our government has to either build it or give private investors tax incentives to build them.
The dark lessons of the first depression in America have been forgotten in both the real estate and the stock markets. Well anyway, that is part of the reason it's foolish to spend too much of your hard earned money on new $25K and up cars and plasma tv sets imo. Think before you spend. I got hooked on my used little Civics in part because they were fun cars to drive and there was no good reason to spend anything more on a vehicle. Except for the Si, the rest of my cars have just been bought outright.
So when you are young and energetic, you are supposed to bust your ass working and get the worst house in the best neighborhood. You fix that up that house and sell it for a profit. You continue the process as you build equity in yourself. Later on, when you retire, you sell out your expensive nice house and buy a place in a less expensive but nice area...
