Lynx, Destroyer of Worlds (with Science!) (lynxreign) wrote,
Lynx, Destroyer of Worlds (with Science!)
lynxreign

deceptive ad

Last night I'm watching some tv and on comes a real estate ad. I don't remember which brokerage, but they're trying to convince people to buy a house, no wonder with the market the way it is, no? Anyway, at one point in the commercial they state "The average home doubles in value every 10 years" trying to make it seem like a great investment. If you look at housing values from 1960 to now, it might even be true, but implying as they do that this trend will continue is horribly dishonest. We had a period of rather strong inflation there and a housing bubble. I doubt that factoid is even close to true if you calculate it in steady dollars instead of prices at the time.

Why do I say it is dishonest? Lets take an example.
Lets say I buy a house right this minute for $300,000 and everything progresses exactly as they say it should this means that in 2018 it'll be worth $600,000. I'll extend this out 60 years, pretending I'm 20 when I buy the place.
2008$300,000
2018$600,000
2028$1,200,000
2038$3,400,000
2048$6,800,000
2058$13,600,000
2068$27,200,000


So lets say I'm 20 and buy a house for half the starting price I mention. When I retire the house by their calculation would be worth 3.4 million by the time I'm 60. If, with longer life spans, I don't retire until I'm 80, the house is worth $13.6 million. And that's in 2008 dollars!
Subscribe

  • Exercise

    Neat exercycle When I'm on the elliptical at the gym I frequently end up watching ESPN and they show the commercial for that exercise bike quite…

  • Singing

    I like to think of myself as a good singer. I know there are other people who enjoy my voice, but I wonder. Am I a good singer or just a really good…

  • Osama bin Laden

    Last night's Presidential speech was a little political grandstanding and that's about it. Obama wanted to tweak Republican noses for doing something…

  • Post a new comment

    Error

    default userpic

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.
  • 15 comments

  • Exercise

    Neat exercycle When I'm on the elliptical at the gym I frequently end up watching ESPN and they show the commercial for that exercise bike quite…

  • Singing

    I like to think of myself as a good singer. I know there are other people who enjoy my voice, but I wonder. Am I a good singer or just a really good…

  • Osama bin Laden

    Last night's Presidential speech was a little political grandstanding and that's about it. Obama wanted to tweak Republican noses for doing something…