The key point though is what is doing the appreciation? I believe it’s the land, not the house. The house itself is a maintenance cost and is depreciating over time. Take for example this case: imagine two pieces of land next to each other that are exactly the same size. Each has an identical house on it, except that one was built 40 years ago, and the other one was just built as a copy. If they both went on the market at the same time, would you expect the property with the 40 year old house to be valued at more or less than the one with the new house on it? If the answer is less, as I suspect it would be, then the only reason would be because newer is better, and the older has depreciated due to age (and may have higher near-term maintenance costs going forward than the new one).

Thoughts/comments?

I agree with most of your comments with exception to this one. Most homes across a 10, 20, 30 year period will certainly appreciate more than when it was initially bought. Sure it may fluctuate up and down throughout the years , however, across decades it will be a positively linear increase. History records of homes support this, so long as they were NOT used as ATM’s.

I believe there are several places to point fingers for this whole debacle. Govt deregulation, mortgage companies/banks lienient lending, fraudulent LO’s, and the consumer themselves for not doing their due dilligence understanding the loan program they actually signed their name to on the promissary note. People would think twice about walking away if it werent for mortgage debt forgiveness. http://www.irs.gov/newsroom/article/0,,id=205004,00.html

In regards to comment 65 by Sam Sterns:
Sure the ‘buy-and-bail’ scenario makes sense for a lot of people. Yet, there are several tactics that have guideline stops in effect. You might want to look up Fraudulent terms such as straw buyers, buy and bail policies, and rent skimming. Best of luck to those that get away with it knowingly.

PR’s: When is the last time anyone remembers the IRS letting someone go tax free on income or ‘equity’ in this case?? In the future, see how much $ you actually net from selling your home. There are some repercussions to PR’s.