Has the American Dream changed?

By
Real Estate Agent with RE/MAX Ideal Brokers
  Has the American Dream changed

As a realtor, over the last few years I have seen the personal devastation of many people losing their homes to foreclosure or having to shortsale their homes and become renters. And even though prices have dropped dramatically along with mortgage interest rates, I have also seen how difficult it is for people to buy, either again or as first time home-buyers. What is more difficult to determine are the attitudes of people toward home ownership.

When prices were going up I often heard people say "they're not making any more land", rationalizing why real estate would always be a great investment. I don't hear that phrase any more. Investment choices are limited however. What choices are there for safer investments than real estate, with reasonable rates of return? Would you rather have your life savings in the stock market or in real estate? Real estate has taken a huge hit, but many people have lost everything in the stock market. Of course there are other benefits to buying real estate than investment potential. You can't live in your stock portfolio, or raise a family in one. So it seems like there are good reasons why owning real estate would still be viewed favorably.

Trulia does a national survey twice a year, in part to determine the public's attitudes toward home ownership. It might seem reasonable that the number of people has declined who put a high value on buying a home, but that is not what Trulia's most recent survey discovered. They actually found that about 70% of Americans consider owning a home to be an important part of their American dream. The survey also found that 57% of current homeowners still believe that buying a home was one of the best long term investments available and that 80% of people who have lost their homes to foreclosure are looking forward to buying another home in the future. And among homeowners who are 55 or older, 69% said they plan to buy another home.

Based on Trulia's survey it would seem that the American dream of home ownership is still very much alive. Of course, the barriers to home ownership are still formidable, with higher down payments the new norm, tighter-fisted lenders, and high unemployment. The motivation to overcome those barriers is there however, and as that happens demand will increase. As we all tell our clients, real estate is cyclical and will come back, however gradually.

Image credit: American Dream Infographic Sept 2011 by Ken Shuman/Flickr, Creative Commons License

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