Will someone please talk to Suze Orman?

By
Real Estate Sales Representative with Remax Results

This morning's Today show featured internationally acclaimed financial expert Suze Orman, interviewed by Matt Lauer.  Most of us are familiar with Suze's take on the housing market.This morning she was promoting her new book, "The Money Class," How to Create Your New American Dream.

There were three major points to the inverview: 

1. Homeownership; many people are upside down in their homes, and losing them.  They may have to rethink ownership and rent for the rest of their lives.

2. College Education; because there is no or little equity in homes, college students might consider a two year community college, and postpone the remaining two years.

3. Retirement; work until you are at least 65, and plan for the future. 

60 second sound bites make good TV, but rarely good sense.  A couple years ago Ms. Orman was advising buyers to offer $100,000 less than the asking price on a home because sellers had to sell. It wasn't a thoughtful strategy, it was a sound bite.

For the thousands of families who have lost their homes to foreclosure or short sale, is renting forever their best option?  Is converting a nation of homeowners to a nation of renters a good solution for the US economy?  I agree with Ms. Orman that the old American Dream died of tortuous strangulation in 2008.  What we need is a new American Dream that is affordable, sustainable, and permanent.  The day of the gated 7,000 square foot Garage Majal that served as an ATM is a dusty memory.

Home ownership is a cornerstone of the economy, rentals are not.  Renting is a temporary solution.  Do we want to tell a young family with small children that their kids will never have a back yard or a family room where they can invite their friends?  Countless studies show us that home ownership fosters both financial and emotional stability, not to mention better grades in school.   What the economy, and every family who has lost their home desperately needs is guidance to rebuild their finances and credit.   Renting forever implies an expectation that families will never repair credit, have stabile income, or a place to put down roots and call their own.  That isn't a New American Dream, it is an economic nightmare.   

While I'm writing this I can hear Ms. Orman arguing sound bites with me.  

"Yes, but they need to get their fiances under control!" she exclaims.

"I agree, but affordable home ownership is still a path to financial stability," I respond.  "Renting, contract for deed, sharing housing are all options for the short run.  Let's give them options, and a plan."

"Look, I'm the expert and I sell a gazillion books.  Let them rent.  Maybe I'll change my mind in another year," she retorts.

Will someone please talk with Ms. Orman so we can rebuild communities together?

 

 

 

 

 

 

Posted by

Mary Jo Quay

“That’s what I do: I move people—H O M E.”

 Phone: (612) 384-1360

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Topic:
Home Buying
Location:
Minnesota
Tags:
credit repair
economy
american dream
suze orman
rentals
today show

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Rainmaker
1,491,090
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Mary Jo-

I totally agree about the difference between renting and owning.  There are many studies that have indicated homeowners and children of homeowners do better in socio-economic, behavioral, educational, community involvement categories than renters do.

Renting is definitely a temporary solution that is sometimes very necessary.  But the goal while renting should be to save enough to purchase a home.

That's my opinion (but I haven't sold a gazillion books!)

Oh wait, I haven't even sold one!

Mar 08, 2011 03:53 AM #1
Rainer
103,190
Keith Vermilyea
Home Buyers Marketing II, Inc. - Boise, ID

Mary Jo ~ I think Suze is focusing her efforts on selling books rather than giving good advice!  I think people will continue to invest in home ownership but not for investment portfolio purposes, rather to build a life for their family in the community of their choice. 

Mar 08, 2011 05:07 AM #2
Ambassador
877,470
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Mary Jo, I am so with you on this one! No, everyone doesn't need to own a home, but most people should be striving for it!

Mar 11, 2011 05:16 AM #3
Rainmaker
172,664
Mary Jo Quay
Remax Results - Edina, MN
I Move You Home

She was at it again this morning on Sunday Morning.  This time she said that prices could keep going down, and that no one should buy a home unless they had 20% down payment, and 8 months of reserves. 

I don't think that anyone in the whole country with the exception of Warren Buffet and Bill Gates have 8 months in reserves.   Although it is a great idea, and even better discipline to have that much in reserves, it is not how people have been trained to control their money. Everything in our society screams at people to keep spending.  We even had a tax stimulus to encourage spending.

I understand that she is pushing for financal conservatism, but it is to the extreme.  How many homes would be sold if a 20% down payment was required?  First time buyers would probably be well into their 40's by the time they saved up enough.  Statistics show that 48% of all investment properties are purchased for cash, but even those numbers can be misleading.  If an investor has a line of credit with a bank, it is considered cash even though it isn't.  If ma and pa refi their home to pull out equity to give the kids a downpayment it is considered cash.   

No wonder the public is so confused.  

 

Mar 13, 2011 05:29 PM #4
Rainmaker
210,056
Marzena Melby
Coldwell Banker Burnet Realty - Richfield, MN
Realtor, Twin Cities Minnesota Real Estate

Let's assume that in my neighborhood everyone bought their home with a 20% down 6 years ago, and we all paid additional 2 % down with time, are we all sitting pretty today?.... No, we are all under water because the area has lost at least 25% in the last 3 years.  The "gurus" are there to maintain raitings so that the TV or radio station can sell advertising! 

Mar 23, 2011 12:25 AM #5
Rainer
90,099
Phil Hillerman
Crye-Leike Realtors® - Rogers, AR
Crye-Leike Realtors®

Good Morning Mary Jo, 

Seems to me she set herself up for another book next year rethinking this years book.  However someone has to buy the homes she wants people to rent.  Hmmm....

Have a great fall season!

Oct 18, 2011 01:55 AM #6
Rainmaker
456,647
Shannon Milligan, Richmond VA Real Estate Agent/Associate Broker
RVA Home Team - Richmond, VA
RVA Home Team - Winning with Integrity.

While I think she has some experience under her belt, she bothers me. Period. She is just so aggressive with the way she comes off. Renting for the rest of your life is not the best option as people have different situations and she shouldn't put everyone in the same basket.

Jan 14, 2013 08:20 AM #7
Rainmaker
689,828
Laura Filip
Laura Filip Broker , Opening doors for All Seasons of Life - Whitesboro, TX
What can we do for you today?

Yes I agree how is renting the next wave for the American's really this is odd .... So who owns the houses that we are supposed to Rent..... Hmmm 

Nov 11, 2014 07:58 AM #8
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Mary Jo Quay

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