In the Long Run, Sleep at Home and Invest in the Stock Market - New York Times

I've had this discussion with various friends and colleagues as well: too often buying a house is viewed (incorrectly, in my opinion) solely as an investment item when it should be viewed more correctly as an important consumption item. Taking nearly all of one's savings and dumping it into one, non-diversified asset (a house) is not generally considered wise investment strategy - but if one enters into home-buying to "consume" a place to live (and hopefully to reap some modest investment benefits) it makes much more sense.

Good article in today's NYT about real estate and the stock market.

Houses are generally not bad investments, but I think it's important to remember that they're best not viewed as only an investment.

From the article: "The biggest value of the house is the shelter it provides," said Thomas Z. Lys, an accounting professor at the Kellogg School of Management at Northwestern University. "Too many people are fixated on speculation whereas most of the benefit really comes from usage."

In the Long Run, Sleep at Home and Invest in the Stock Market - New York Times