In This Day and Age - What Good is Owning a Home?

By
Real Estate Agent with The Buyers' Counsel

Front Door to a HomeA recent cover of Time Magazine featured the phrase, "Rethinking Homeownership" and dwelled on the downside of owning a home since we have been through some turbulent times.

This is doom and gloom of the worse kind.  A home may not be the ultimate piggy bank that it once was, but does that mean we should become a nation of renters?

Before we turn in our welcome mats and put away the "Home Sweet Home" plaques we may want to look at the opportunity that is here and the reasons to buy a home right now.

  1. Quality of Life.  A rental property is not going to give you the standard of living that home ownership will.  Have you looked for a rental lately?  Regardless of the location you are in, you will not find the same quality as in a purchased home. 
  2. There are deals to be had.  Yes, it difficult to sell a home right now - and that makes is easy to buy one.  Many buyers have left with the tax credit expiration so the competition is not great for all of the houses that are languishing on the market. Take your pick.  Prices are low.
  3. Loans are inexpensive.  As recently as two years ago interest rates were over 6%.  They are now in the low 4's.  That is unprecedented. 
  4. Tax Savings - You still have the mortgage interest deduction and can also deduct your real estate taxes. If you sell, you will get a tax break on your capital gains. All these items together make buying a much better deal than renting.
  5. It is a forced savings account.  You may end up renting an apartment for a bit less than it would cost to buy a home, but that money is still going out the proverbial window.  With your mortgage payment you are putting that money towards equity that will be there for you when you retire or decide to sell.
  6. There is a lot to choose from right now.  With a glut of unsold homes, inventory is well above average levels. This means low prices as well as great choices.
  7. Pride of Ownership and Stability.  You can decorate the kitchens and bathrooms exactly the way that you want them to be.  Create an addition.  Finish the basement.  It's yours!

It was once said that homeownership could "change the very physical, mental and moral fiber of one's own children."  Studies have shown that homeownership creates social stability and safer neighborhoods. There is also the fact that children actually do better in school when their families own the homes they live in.

None of this has changed.

So, is this still a good time to own a home? Absolutely!

  

Copyright 2010 "In This Day and Age - What Good is Owning a Home?"

Written by

Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

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Re-Blogged 10 times:

Re-Blogged By Re-Blogged At
  1. Leslie Ebersole 09/28/2010 03:08 AM
  2. Lenn Harley 09/28/2010 03:27 AM
  3. Cynthia Larsen 09/28/2010 05:16 AM
  4. Andi Grant 09/28/2010 06:24 AM
  5. John Zappia 09/28/2010 01:10 PM
  6. Jane Peters 09/28/2010 05:00 PM
  7. Crystal Pina 09/29/2010 06:50 AM
  8. Kay Van Kampen 09/29/2010 03:22 PM
  9. Janice Roosevelt 10/02/2010 03:53 AM
  10. Chris Ann Cleland 10/05/2010 02:58 PM
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Claudette...

There has always been the value of "pride of ownership" I love my house, and I am glad that it belongs to me and not some landlord!

Sep 28, 2010 11:21 AM #48
Rainmaker
403,067
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Chris: 

Looking at it as a long term commitment is important.  But if someone is looking out at five years plus ownership will beat renting any time. 

Katerina: 

She did not seem to think that people have the right to make their own decisions about home ownership. The article had a tone of disrespect for individual rights. I agree that most people are perfectly qualified to decide for themselves what the value of home ownership is in their lives. 

Michael:

 I think our equity position in our homes will remain crucial no matter what.  

Chuck: 

Some will obviously believe that but everyone should have to right to decide for themselves. 

Barbara: 

I think those tax deductions will be staying in place for the time being - they are far too popular for politicians to fool with. 

You, retire? Perish the thought... 

Tom: 

You have just outlined one of the biggest problems with renting. You can literally loose the roof over your head without much notice. 

Ken: 

As you can see; my piece is quite different from his. 

Kim: 

That must have been a great feeling for them.  I am looking forward to that day. 

Richie: 

Good to hear that you are so busy.  I am finding plenty of people who still want to buy as well. 

Michael: 

Well said.  This is not only about an exact dollar value, but a lifestyle. 

Janet: 

The thought did cross my mind that the article bordered on irresponsible journalism. 

Dorie: 

Thanks for that.  I think those facts are extremely important and they drive many people in their decision to become home owners. 

Mary: 

Wow - sometimes they just do not listen to you, do they?  Your son has to make his own decisions and I am sure you support him in that.   I wish him the best. 

Bryan: 

Great points all. Emotional health could be affected by not being able to do what you want in your environment.  Also, being evicted could impact a person pretty severely. 

Phil: 

That is a great point!  I haven't either. 

Dave: 

We only hope for that. 

Sep 28, 2010 11:29 AM #49
Rainmaker
403,067
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Mindy:

Interesting.  I suppose they do exist and do like the mobility. But you are right - they are in the minority.

Richard:

I feel the same way about my house. Now, currently in the midst of major redecorating.  I would not be able to do that if it were not my own.

 

Sep 28, 2010 11:33 AM #50
Rainmaker
449,563
Jon Quist
REALTY EXECUTIVES TUCSON ELITE - Tucson, AZ
Tucson's BUYERS ONLY Realtor since 1996

Every point you made is correct and valid.

Sadly, a good example of rent areas versus owner areas is what happens to a neighborhood that starts out as owner occupied and has now turned in to a rental neighborhood.

Original owners moved away for better work opportunities, and, since we know how hard it is to sell if you are underwater, chose instead to rent out the houses.

An unintended side effect of the current market. Scores of newer homes occupied by renters instead of the original owners. Not a good turn of events.

Sep 28, 2010 11:36 AM #51
Rainmaker
403,067
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Jon:

That is unfortunate since we all know that rental areas are not considered to be as stable as neighborhoods where ownership is high. Many buyers do not want to be in areas of multi-families for that reason.

 

 

Sep 28, 2010 12:17 PM #52
Rainmaker
277,377
Ken Patterson
TPR Properties - Rocklin, CA
Roseville Real Estate, TOP Rocklin Realtor

Yes, yours is different.  Very similar in content and paradigm discussed you must admit.  And the Time Magazine article you quoted is interestly just a click away from Mr. Arends article.  I will take you at your word that this is all your original material and thoughts though.  Congrats on the Featured Post!

Sep 28, 2010 12:19 PM #53
Rainer
139,135
John Zappia
Maine Custom Realty - Portland, ME
Maine Custom Realty

Leslie's comment #12 - "...I am struck by a line I heard recently "did our parents over-think investment issues when they bought their first home"? No, they didn't. They figured out what they could pay every month and found a house for that payment. The massive angst we're turned home shopping into looks silly in comparison...."

This reminds me of a conversation I had with my father many years ago when he was explaining how homes used to be purchased 'back in the day'...he mentioned how he went to the bank, shook someone's hand and signed about 2 documents and off he went into homeownership-land.  They focus wasn't on the investment, because it really shouldn't be looked at that way, but on the need for a roof over the family's head.  My mother still lives in that house going on 55 years.  If I had to guess I would say it's the insurance companies & lawyers who have pretty much taken all the fun out of buying property (with banks not too far behind).  Houses are still worth having...it's the additional 2nd, 3rd and so on property you buy that are the investments.

Sep 28, 2010 12:58 PM #54
Rainmaker
403,067
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

John:

Isn't it great that our parents did not "over-think" the purchase of the homes we grew up in. Imagine how different our lives would have been being raised in an apartment rather than a neighborhood?

 

Sep 28, 2010 01:03 PM #55
Rainmaker
838,719
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

I couldn't agree more.  I think TIME focused too much on the investment aspect of home ownership, with a starting point of 3-4 years ago.  I think if anyone askes their parents, and their grandparents, most will find that those folks will probably say that home ownership was the wisest decision they ever made.

Sep 28, 2010 01:29 PM #56
Rainmaker
449,606
Vickie McCartney
Maverick Realty - Owensboro, KY
Broker, Real Estate Agent Owensboro KY

Hi Claudette~ There is a big difference in a neighborhood that is mostly rental homes!  It is a glaring difference for sure!

Sep 28, 2010 01:32 PM #57
Rainmaker
584,667
Mitchell J Hall
The Corcoran Group - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Claudette,

Wonderful post. Excellent data. Homeownership offers both emotional and financial stability. Homeownership is not for everyone but it makes sen$e for most people. As an investment it is long term. Real estate goes in cycles. I think 10-15 year cycles. My parents stayed in the same house 40 years. If a buyer is not planning on keeping it for at least 5+ years, I don't think it's right. I know many wealthy renters. Manhattan is an anomaly, 75% of our housing is rentals. We have wealthy high end renters and also those fortunate that were bequeathed a "coveted" rent regulated apartment.

Sep 28, 2010 01:46 PM #58
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Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Well done. Claudette. 

Nations without Homeowners are called Fiefdoms, and the occupants of those countries are called Peasants, Vassals, or Serfs.  

Sep 28, 2010 02:03 PM #59
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Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

The media has to find something to sell magazines ... good post.

Sep 28, 2010 03:06 PM #60
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Claudette, if you can make the deal on the purchase side, and no one has a crystal ball on the future, home ownership can be SUCH the right thing to do. All good points you have there.

Sep 28, 2010 04:30 PM #61
Rainmaker
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Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX
Broker,CLHMS,GRI

What an excellent post, I just finished a long article about this same subject and it seems that no one is remembering all the good things about home ownership! I have been noodling around with a post on the subject myself but yours is great food for thought! Nicely Done!

Sep 28, 2010 04:31 PM #62
Rainmaker
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Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

I am reblogging this, Claudette.  You really put some great points together.

Sep 28, 2010 04:58 PM #63
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

These are great thoughts to countermand the idea that it isn't a good idea to own a home.

Sep 28, 2010 05:43 PM #64
Rainmaker
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Nina Rogoff
RE/MAX Executive Realty - Medfield, MA
Selling Norfolk County Homes

Wow, Claudette! Excellent post! I love the points you made! I especially like what you said about "a home may not be the ultimate piggy bank..". This is what got so many people into trouble. It's time people better managed their equity power of their home. Great response to "anonymous", too. You prove that a great realtor is always well-informed.

Sep 29, 2010 03:35 AM #65
Rainmaker
1,009,668
Fred Carver Personal Real Estate Corporation
RE/MAX Camosun Victoria BC Real Estate - Victoria, BC
Accredited Real Estate Consultant

Hi Claudette...Congratulations on your feature post!...when I first started in Real Estate people did not buy homes because they went up in value, they wanted to stop paying rent and bought a home knowing in 25 years they would own their home...that has not realy changed.

Cheers

Sep 29, 2010 04:24 PM #66
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

Claudette:  Don't know how I missed this one.   Outstanding post!  Congrats on the feature.

Oct 05, 2010 02:56 PM #67
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Claudette Millette

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