Home price freefall

Home prices are tumbling (registration required). But you might be able to find some bargains in Las Vegas.

Prices fell 32 percent in Las Vegas, the most of any metropolitan area measured, in September to an average of $110.35 a square foot. In Sacramento, the decline was also 32 percent to $137.01, Radar Logic said.

Real Estate Investment

Real Estate can be an investment instrument. Real Estate that can generate income works as investment income. Apartment houses, warehouses, farm land, and other kinds of income producing real estate are investment instruments.

Your house is not an investment instrument.

When a real estate broker or mortgage banker tells you that you don't have to worry about finance costs of buying a house becuase it's just an investment that will increase in value and the appreciation in value will magically take care of all those nitty gritty mortgage finance problems you need to pack up your papers and run. Stay far, far away from those people.

Your home is a place to live. It has maintenance costs attached. It does not generate income. It is not an investment.

Double Blind has a nice post explaining this idea.