In the meantime, Robert Shiller of the Case-Shiller Home Price Index made the dramatic statement that, with Americans’ growing shift to renting and city living, suburban home prices may never rebound in our lifetime. “Except for some exceptional boom periods, housing has never been a good financial investment,” he said. Shiller, the world’s leading student of bubbles, housing and otherwise, found that from “1890 to 1990, the rate of return on residential real estate was just about zero after inflation.”
According to Richard Florida, author of The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity, “Mobility and flexibility are key principles of the modern economy. Home ownership limits both. According to one important study, cities with higher home ownership rates also suffer from higher unemployment rates.” Linda and I can attest that mobility and flexibility were key qualities in our quest for a leaner style of living.
And Nassim Nicholas Taleb writes in his bestselling book The Black Swan: The Impact of the Highly Improbable: “Also consider the number of families who tunnel on their future, locking themselves into hard-to-flip real estate thinking they are going to live there permanently, not realizing that the general track record for sedentary living is dire. Don’t they see those well-dressed real-estate agents driving around in fancy two-door German cars? We are very nomadic, far more than we plan to be, and forcibly so. Consider how many people who have abruptly lost their job deemed it likely to occur, even a few days before.”
All of which suggests that Linda and I made a smart move when we escaped house arrest and adopted a more mobile means of living. Just the other day, a prominent regional magazine announced that our new hometown of Franklin, Tennessee, beat out another place we’ve called home, Savannah, Georgia, as the best southern town. And since we’ve mobilized our lives, we’ve had the pleasure of living in other popular destinations like Celebration, Florida and Nantucket, Massachusetts. While it might not be for everyone, we are loving the leasing lifestyle!