Homeownership in Today's World

When we bought our first home in 1989 the prevailing thought was to buy the most home you could afford.  The thinking was that we were young, our incomes would continue to grow and a home is a great investment.  A homes value at least grows with inflation and we would build equity with every mortgage payment.  Homeownership was valued and appreciated and no one questioned the overall value of being a homeowner.

The events of the past several years are now turning this thought on its head and some question the basic value of being a homeowner.  As I have said too many people, I would not be a Realtor if I did not believe in homeownership, but is being a homeowner a "crock" these days.  Should we all just turn into renters?  Have the events of the past 8 years erased decades, generations, and centuries of being as homeowner.  Of course not!! Greed and insanity caused this problem, but sanity must get us out.

The housing boom was as devastating for our county as the housing bust, but I can't see how we can let those events totally alter the value of owning our own piece of land on which to live.  I also see a stark difference in attitudes between young first time buyers and those in their middle-age's going on their 2^nd, 3^rd, or 4^th home. Older buyers, like me, don't question the inherent value of buying a home.  Whereas young first time home buyers have only seen the bust and many know someone that has lost their home or is struggling to keep up.  I am certainly not trying to lessen the devastating effort this market has had on many.  I don't know any Realtor that has not had to fight to help a client keep their home or help them sell it in a short sale.  I know several people that decided their best course of action was to just walk away; an unbelievable thought a few years ago, but today part of our national dialog.

The general consensus is that 2011 and 2012 will see a strengthening recovery in the housing market and broader economy.  However, I don't think the basic beliefs about buying a home has changed.  It has always been about location, location, location.  As Realtors our job is to help home buyers make good long term decisions about a particular home and neighborhood.  To be sure, the housing bust has proven just how vital home ownership is to America.  I do think home buyers need to be prepared to be in a home at least 5-7 years.  A client of mine just decided to back out of a contract for new construction since they really did not see themselves staying in the home more than a year or two.

I read an article in Ric Edelman's (www.ricedelman.com) Inside Personal Finance newsletter recently.  It was titled, "Neither the Best of Times Nor the Worst of Times".  In it he writes, "Sellers are asking too much and buyers are offering too little.  As a result, nothing is getting done.  Houses aren't selling because neither side is being realistic.  The impact on your life is huge.  You're stuck with a house you don't want to keep or unable to get the house you want to move into.  Until buyers and sellers are willing to accept the fact that current real estate prices are not as high or as low as they thought, their lives will remain on hold, the real estate market will remain sluggish and our economy will not recover."

So let's hope that sanity takes old in 2011 and people get back to making sound decisions.