I’m not sure what happened. But it looks like the Wall Street Journal now hates our freedom and has sided with the terrorists:

Why Your Home Isn’t the Investment You Think It Is – WSJ.com
Unfortunately for both groups, however, houses are not very good investments. For the grasshoppers, there’s nothing quite as stupid as paying off your 2002 trip to Orlando in 2032, when you finally settle up your refinanced “cash out” 30-year mortgage. And for the ants, economic studies have demonstrated over and over that houses (1) cost more than most people make when they sell and (2) rarely match the long-term returns of stocks or other investments.

And that’s doubly true today, with much of the U.S. well into a real-estate recession. It’s unlikely that homeowners in once-booming areas will see a return of skyrocketing prices anytime soon.

“Real-estate investments suffer serious and sometimes prolonged downturns,” writes economist W. Van Harlow in a new study of home equity and retirement from the Fidelity Research Institute in Boston. “A real-estate ‘bust’ could be quite damaging to an investor nearing retirement who relied too heavily on home equity.”

It may be late for a lot of homeowners to read this, but here it goes anyway: It’s risky and bad planning to have too much of your net worth in your principal residence. No prudent stock-market player would put 60% or 70% of a portfolio in just one stock, but millions will hold that much or more of their total net worth in just one house.

Food for thought:
• If you bought a house in Los Angeles in 1990, just as the real-estate market turned downward, you would have had to wait a decade for your home’s value to return to what you paid.

• If you bought in Rochester, N.Y., in 1980, you would have seen only a mediocre 4% annual growth for the next 25 years.

• If you bought in Dallas in 1986, as the oil boom went bust, your home wouldn’t have appreciated at all before 1998.

Q: My home is my largest asset. Why shouldn’t I rely on it to provide my nest egg?

A: Because a house can be an inefficient means of investing, and it costs far more to buy and operate than you think. Homeowners can easily end up paying more to live in their houses than the supposed “profit” they make when they sell them.

When most homeowners figure their returns, they don’t do much more than subtract the price they paid from the price they received. Then they come up with a really big return because they paid only a 10% or 20% down payment. So they figure they made a huge “profit.”

But they didn’t. That’s because the costs of owning a home — buying it with a long-term mortgage and then paying taxes on it, insuring it, repairing it, renovating it — sap most of what most homeowners think they make in price appreciation.

Houses are nice financially because there are not many other things you buy that actually go up in value, and not many things can put a six-figure check in your pocket when you sell them. But don’t delude yourself: You’ve already spent most of that check, and you are likely to spend the rest in just a few days when you buy a new home.

Think that’s bad? Just wait… here’s the part that truly puts this piece right up there with the bad guys:

Q: But it’s certainly better to buy a house than to pay rent.

A: That depends on when you buy, and how long you own. Buy at the wrong time — like during the kind of buying frenzy that much of the country has just experienced — and you could well end up wishing you had rented instead.

Blasphemy! Blasphemy! Blasphemy!

If you don’t have a mortgage, you’re not driving up property prices. And if you’re not driving up property prices, you’re hurting your neighbors by preventing them from extracting equity to pay for college for their children.

Why do you hate our children, WSJ?

The only saving grace is that none of these negative examples were in the Bay Area. It’s not a coincidence. Here, houses don’t need any maintenance because of the weather, and it’s special. And desirable. And special.