In this episode, Professor Richard Green joins us. He’s the Director and Chair of the University of Southern California Lusk Center for Real Estate, and he’s been obsessed with data and cities since he was about nine years old. He’s here with a counterintuitive finding. If you bought a house in the Detroit metropolitan area back in 1987, you did better financially than if you’d bought one in San Francisco and even beat the stock market. Not because Detroit went up more in value. It didn’t. But because the rent you don’t have to pay is income, and that income is worth more in a stable market than a speculative one.

Richard also walks us through the “buy, borrow, die” strategy of the wealthy: borrow cheaply against an asset instead of selling it, invest that money elsewhere, with no need to pay taxes on a sale. Turns out an ordinary homeowner can do a version of that too, just by refinancing smartly when mortgage rates drop. And a fun fact from a hundred and fifteen years ago: a Pasadena newspaper ran complaints about ugly new houses ruining the neighborhood. Those houses were craftsman bungalows that are highly valued landmarks today.