In the greater Wilmington, NC area, where so many homeowners are hurting due to falling house prices, folks are looking for and deserve anwers to the question that make sense. That our area home vales rose 60% between 2004 and 2007 didn't make any sense. That irrational growth meant a long fall and protracted recovery. We may be at the bottom but no one knows for sure. My message to todays buyer is be prepared to rent out your home if circumstances take you outside the area before appreciation kicks in again.
I know that ours is an inherently transient area. Many folks come, fall in love, stay forever and encourage their families to migrate too. Then, there is the other side of it. Folks who came and go. Folks who decide for all manner of reasons that the Wilmington area is not for them. Perhaps the hot summers seem a poor trade for the cold winters of their previous homes or they simply miss their old friends more than they like their new ones. In addition, we have local pocket markets driven by military buyers whose PCS (Permanent Change of Station) orders call the shots on how long they will stay here. Folks in the greater Wilmington area are always coming and going which historically kept values from rising or falling dramatically but our last 10 years broke the model on that one.
Home ownership is now what it mostly always was - a long term investment! Live in it long enough and you'll get something out of it. That still makes it unique among the the other living expenses in your life
There's not a chance you'll get a significant rebate on your energy bills or that todays current full price fashion purchase will be worth more than you paid for it when you take it to the consignment store. The brand new car you drive off the lot will never again be worth what you paid for it today
Real estate, in the form of your home, has the potential, to allow you to patially recoup the expense of living there and the long term potential to grow in value.
Whether home ownership still make sense is a broader question way beyond the potential financial incentives. The value you place on living in your own home is a whole other factor for consideration. I grew up in rentals and dreamed of the day I could paint my bedroom any color I chose and put up as many pictures as I wished. Those dreams never were about appreciation.
Those were lifestyle dreams and the essential reason I know home ownership still makes sense for me!