I have never thought of my home as an investment.

When I bought my first one for $35,000 nearly 45 years ago, I never thought of it as a retirement asset.

It was our home. We would bring new babies home from the hospital to change the ambiance of it. With plenty of sweat and hard work, we would plant, weed, and groom it as part of the American dream. There was no plan to flip it, or resell it for a profit.

Five houses later, we could say that it has treated us well. Our 10 percent down payment has grown substantially, but still not as an investment. It is a place where grandkids and now great-grandkids can come and bond with grandma and grandpa.

Your home is an expression of your lifestyle, it is a positive setting for your life, and a place you can enjoy in privacy and comfort. As an investment, though, it is illiquid, and its rate of return is no sure thing.

Although we have never lost money on a residential purchase, it has happened. Buyers learned that lesson in the Great Recession. Using the S&P/Case-Shiller home price index as a barometer, house prices today are roughly where they were in 2007 – it has taken the residential real estate market that long to recover from the mortgage meltdown. Values have been a little better in the Napa Valley when compared to the national real market.

Will they continue to rise? Hard to imagine, but I have been saying that for all these decades and pricing has defied logic.

Home prices can be linked to wage increases. Over the past year, hourly earnings have grown 2.5 percent. This has mystified many economists and frustrated others. Normally, when the jobless rate is below 5 percent, you have much greater wage growth. Six months before the start of the Great Recession (March 2007), the unemployment rate was 4.4 percent (right where it is now), and wages were growing at 4.2 percent a year.

Many have said the dramatic rise in home prices had eliminated many from buying in our idyllic Napa Valley. Check the real estate ads in any newspaper or online. Housing prices are outlandish.

Real estate has been a substantial hedge against inflation, but so has the stock market, and other commodities. Will it continue? Who knows?

Some other investments are simpler to own than real estate. A $20,000 new roof proved that to me. You must also pay property taxes, insurance and other maintenance costs.

If you bought your home at the peak of the 2007 real estate market, you are probably close to break-even, but if you are like most homeowners, you are probably ahead in value from your original purchase price.

Does this mean you are living in a gold mine? If so, where do you live to after cashing in? Many Californians are cashing in for Oregon, Arizona, Utah or states east.

Good luck to them and giving up on all that California offers.

Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155, MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.

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