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[quote=Anonymous][quote]You need to first ask yourself why you think the stock market is safer bet than the DC housing market. The stock market is NOT the place to gamble your down payment money with, unless you plan to put it into a very low risk investment. The real estate market in the DC area almost never suffers the same type of downturn that the rest of the country does. yes, it can and has gone down but not to the degree of the rest of the country. [/quote]

Historically, the stock market has outperformed the housing market by quite a bit.  Adjusting for inflation, the average historical rate of appreciation of a house is estimated to be less than 1% per year, versus the stock market is 8% per year.  The DC real estate market outperforms other markets, but you can't assume that the rapid appreciation seen in the mid 2000s will continue on.  I don't think that putting your money in a low fee index fund is that risky, especially if you hold on to it for multiple years.  Statistically, you are more likely to make money on a diversified investment in the stock market than on a house.

[url]http://www.dailyfinance.com/2012/05/29/6-simple-reasons-why-you-shouldnt-buy-a-home[/url]

"Home prices always go up in value, right? After the recent real estate bubble burst, we all now know this isn't true.

But what you may not know is this was true even before home prices began falling.

Homes appreciated at an inflation-adjusted 0.4% annually from 1890 to 2004, according to Robert Shiller in his book Irrational Exuberance. Consider this: A $100,000 home is historically worth only $112,723 after a 30-year mortgage is finally paid off. Whereas $100,000 invested in large-cap stocks -- assuming that market segment's historical rate of return -- would be worth $719,677 if they earned their long-term average return, even after adjusting for inflation."

Of course, you might always buy a house in a neighborhood that shoots up in value as the area becomes more desirable, but that is just as much gambling as speculating on stocks.[/quote]

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