The Myth of the Real Estate Pioneer

[See 5 Smart Ways to Buy a Foreclosure.]

A game for the rich. Both Staiger and Simon say real-estate speculation should be left to the rich. "Your primary housing vehicle should not be considered an investment—it should be a consumptive asset," Staiger says. "You shouldn't be betting with your family's security, which is what a house really should be. It should be a savings vehicle that costs you less every year."

Staiger says the current availability of cheap mortgages—Federal Housing Authority mortgages rates are currently below 4 percent—compel people to make speculative bets in questionable neighborhoods.

"It shouldn't be easy," to get a mortgage, Staiger says. "A home is a gift that keeps on taking, a depreciating asset."

"We're already recreating the sins of the past," he adds, referring to the speculation of the last decade that led to the real estate bubble. "The American psyche of ownership still has not changed."

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