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Home Ownership Drops - But let's not jump to conclusions, owning a home rocks! Great stats here too.

By Charlie Dresen

Real Estate Agent with The Group, Inc

February 15, 2011 05:40 AM

There's been a lot of discussions lately regarding home ownership. And frankly, there are solid arguments in favor of renting versus owning a home today. The primary argument against home ownership today revolves around appreciation in the values of real estate. Over the last 2-3 year real estate has not gone up in value. In fact, home values have gone down - up to 50% or more in places. And home ownership is down as well.

Home ownership should not be taken lightly. Sure we'd all like to make gains on our real estate as we have done so almost consistently for 70+ years. But as we have learned from the past few years, nothing is guaranteed. Yet, now that we have weathered what seems like the worst of the storm, let's remember what home ownership is all about. And let's look at the past to help us in the future. Imagine that.

America is a nation of possibilities; a land of opportunities where seemingly anyone can obtain "A Better Life". And one of the components of the "American Dream" is Home Ownership. Home Ownership Offers:

• A sense of identity

• A sense of status

• Shelter

• Comfort

• An investment for the future

• A way to get ahead to "A Better Life"

Over the last 90 years, Home Ownership has increased substantially from 46% in the 1920 to 67.3% first quarter 2009 but has dropped over the last year to 66.5% for the 4^th quarter of 2010.

Much of this increase & decreases have a direct correlation to major national events that took place over the last 100 years.

1920's --Consumerism     45%
1930's --The New Deal: The National Housing Act of 1934    48%
1940's --Post WWII: GI Bill of Rights    43%
1950's --Grabbing the American Dream    54%
1960's --Society Shifts, The Good Life, Opportunity   62%
1970's --Inflation, Vietnam War, Oil Crisis    62%
1980's --Deregulation, A Free Market, Wall Street    64%
1990's --Debt Increases, Flat Earnings    64%
2000's --The Age of Real Estate, Easy Money    67%
2010   -- Mortgage Crisis, Banking fraud, Global Issues 66.5%

On average, homes have appreciated in value 5% a year - with a few exceptions (2000 - 2006 values rocketed up & 2007 through 2010 values dropped).

On average, inflation-adjusted home prices have fluctuated between $125,000 to $150,000 - with a few exceptions: Below average - $100,000 from (1920 through 1942 The Great Depression) and Above the average - $265,000 as a peak from (2000 through 2006).

Home Prices

So what do we do today when asked if home ownership is a good thing? I would say yes. Home ownership offers so much more than the potential investment. And I do believe that over the long-term, real estate values will go up. I'm not even going to talk about the tax-deductions here -that's another story.

There's nothing like painting a wall a special color, or gardening outside your front door, or coming "home" after a long day and just relaxing in what is yours - Home Ownership Rocks.

---For more on this topic or questions regarding real estate in Steamboat Springs, feel free to call Charlie at 970-846-6435 or write me an email at: charlie@steamboatsmyhome.com. I will answer your post or email promptly with candid and informed answers. Click here to view all properties in Steamboat Springs in "real time" --- This is one of the few real estate sites showing all foreclosed and all short sale listings in real time and updated every few minutes.

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Raiza Schwartz

West USA Realty - Ahwatukee, AZ

CDPE

Thank you, that was presented very well.

Feb 15, 2011 05:59 AM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Thanks Raiza - it's too easy to get caught in the mire of our current real estate market to forget the big picture.

Feb 15, 2011 06:12 AM

Joy Daniels

Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

I tried to "reblog" but it didn't work. There is a lot of good information with your graphs, etc. in the post - thank you! You are right, home ownership should not be taken lightly - it is a priviledge.

Feb 15, 2011 08:13 AM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Joy - Thanks. I'm fairly new here so reblogging should work. Hmm. Any thoughts? I have it checked so you can.

Phil - Like I said, interests deductions are huge and a major factor in buying real estate. And like most realtors, and home owners I'd assume would cringe at loosing that benefit.

Charlie

Feb 15, 2011 08:44 AM

Team Honeycutt

Allen Tate - Concord, NC

With a home, you own it and you aren't making improvements for the landlord. You make them for yourself.

Feb 15, 2011 09:42 AM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

So true John. That graph is about 6 months old so I expect we're getting pretty close to following what had been "typical" home prices for generations.

It's just amazing to me, looking back to 2001 through 2005 why more people didn't raise concern. I guess most thought we were just entering a new ear of real estate.

Feb 15, 2011 10:01 AM

Sherri Smith

RE/MAX Integrity - Eugene, OR

You Know there not making any more land...so investing in a home will never be a bad thing to do even in this economy!

Feb 15, 2011 10:08 AM

Kerrie La Guardia

ActiveRain, Community Manager - Kirkland, WA

Let it Rain!

The reblogging feature is currently disabled. We've disabled a few of the tools on AR to focus on making the current ones superb.

Feb 15, 2011 10:26 AM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Erica - That's easy to say but over the years we've begun to really expect real estate to appreciate. And it has for the most part. Many home owners have just come to expect their home to go up in value. Many of us have never seen such troubling times in real estate. Sure there was the early 80's but I for one was not a home owner then and the expectation of those buying first or seconds homes is that it will go up.

I agree home first, investment second. But I feel over the last 10 years we've seen such great gains that our mind set changed to the other way around. It's turning around though.

Feb 15, 2011 11:32 AM

Kate Elim

Dockside Realty - Spotsylvania, VA

Realtor 540-226-1964, Selling Homes & Land a

Hi Charlie...First our home is our shelter and second it's a piggy bank. The first is the most important. Not only here in the U.S. but in many places around the globe owning your own home is a very important goal.

Kate

Feb 15, 2011 12:38 PM

Shirin Sarikhani

Seattle Staged To Sell www.seattlestagedtosell.com - Seattle, WA

RESA-Pro

Hi Charlie. I am a big believer in investing in real estate properties. It's true that the value of my investment properties dropped by 5% or so, but the rent didn't. It actually went up. Some of my friends lost their stock market investments, but my properties are still standing.

As a home stager, I come across some great investment properties, I just wished that I could buy them all.

Feb 15, 2011 12:57 PM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Shirin - Over the last few years there was a lot of losses in both real estate and stocks. But I'd say real estate has been traditionally more stable than stocks. At least over the last 80 years.

Kate - Here's some home ownership stats for the world. Keep in mind these are 1991 stats but it's interesting.

Ireland         82%      Japan           60
Spain           80       Portugal        59
Luxembourg      77       United States   59
Norway          73       Finland         58
Belgium         72       Sweden          55
Greece          72       France          54
Italy           68       Netherlands     46
United Kingdom  67       Germany         40
Canada          64       Switzerland     29
Denmark         60

Feb 15, 2011 01:37 PM

Margaret Woda

Long & Foster Real Estate, Inc. - Crofton, MD

Maryland Real Estate & Military Relocation

You're right... these stats are interesting. You put a lot of work into this post, and I'll be bookmrking it because I suspect it's information I'll reference from time to time.

Feb 15, 2011 11:49 PM

Brian Madigan

RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON

LL.B., Broker

Charlie,

There are a lot of attractive reasons for home ownership and so far, it's proven to be a good investment in Toronto. The rate of return over loneger periods of time is about 5% per annum.

Brian

Feb 16, 2011 12:18 AM

Harry F. D'Elia III

WEDO Real Estate and Beyond, LLC - Phoenix, AZ

Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Yes, there is a correction in the market. There is a segment of the population that must rent at this time. However, they will come back stronger than ever over the next five years.

Feb 16, 2011 01:32 AM

Armando Montelongo

Armando Montelongo Companies - San Antonio, TX

Excellent presentation! While things may not look fantastic right now, that doesn't mean that they won't ever look up in the future. Home ownership is always a good idea, even in the "bad" times.

Feb 16, 2011 02:34 AM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Brian, Harry, & Armando,

I could not agree more. Home ownership is great and will always be a good long-term investment. Although I'm finding that having gone through a few years of real estate doubt, people are still a little reluctant to see the light at the end of the tunnel. I feel we are starting to see it.

Feb 16, 2011 02:42 AM

Kent Anderson

Coldwell Banker Resort Realty, Sandpoint, Idaho - Sandpoint, ID

from Schweitzer to the Lake

Hi Charlie - Good post! I think the "self-correcting" market is a good thing. We should be buying homes for the right reasons. I agree with Erica above, "a house should be a home first and an investment second."

Feb 16, 2011 02:57 AM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Kent,

I feel a self correcting market is extremely healthy and great news for most. I mean I don't like to see the value of my real estate drop, but it had to happen to make things healthier.

Feb 16, 2011 02:43 PM