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Buy or Rent? Should It Matter

By Michael Jacobs

Industry Observer CalDRE #01165532

April 06, 2013 08:12 AM

Buy or Rent? Should It Matter?

A HOW Housing Matters Survey commissioned by the MacArthur Foundation released on April 3, 2013 raises some interesting points -- buy or rent your home -- should it matter?

Read the entire report here:

http://www.macfound.org/media/files/HHM_Hart_report_2013.pdf

I believe in home ownership but realize that this option may not be the right decision for everyone. Here are some of the points I found interesting in the study:

Financial concerns versus lifestyle. While important, finances are not the only reason that renting may make more sense than owning. As a society, we are becoming more and more mobile and it’s likely that this will continue to evolve. While the my market in Pasadena and the surrounding San Gabriel Valley is quite active -- there are many people who either purchased or re-financed during the 2005-2007 time period who continue to suffer -- it’s even more evident in other harder hit areas in the country.

Perception versus reality. Are homeowners more successful than renters? Should it matter - no. Does it matter? The report states that while the majority of renters think that home ownership is still part of the American Dream and one they aspire to. Among current homeowners over 40% commented they could see themselves as renters in the future.

Government influences. I’m not going to get political but Realtors know we have one of the most influential lobbies in Washington -- do we favor home ownership more than the rights of renters?

Michael Jacobs is a Realtor who serves the Pasadena and the San Gabriel Valley as well as the adjacent Northeast Foothill areas within the city of Los Angeles. Check properties for sale or lease at www.camoves.com/michael.jacobs. Representing homeowners selling or leasing their condos, townhomes, lofts, single family homes and residential income property, prospective buyers and qualified tenants since 1994, I can be reached at 818.516.4393 cell or michaeljacobs@coldwellbanker.com.

Buy or Rent? Should It Matter?

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Wallace S. Gibson, CPM

Gibson Management Group, Ltd. - Charlottesville, VA

LandlordWhisperer

MANY of my rental residents are homeowners elsewhere so where they may be TENANTS in my area, they are PROPERTY OWNERS elsewhere which makes a difference in the way many view their living accommodations

Apr 06, 2013 06:02 AM

David Popoff

DMK Real Estate - Darien, CT

Realtor®,SRS, Green ~ Fairfield County, Ct

Everyone has different requirements for renting vs owning, no right or wrong.

Apr 06, 2013 06:08 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Wallace - this is a very true -- especially when a job opportunity occurs in another city and the relocating person chooses not to sell their home and try on "for fit" the new city.

David - absolutely -- isn't it great to have choices?

Apr 06, 2013 06:30 AM

Roger D. Mucci

Shaken...with a Twist 216.633.2092 - Euclid, OH

Lets shake things up at your home today!

Probably a combination of gypsy, adventure and wanderlust Michael.

Apr 06, 2013 07:00 AM

Laura Allen, Lake Tahoe - Truckee Real Estate for Sale TahoeLauraRealEstate.com

Coldwell Banker Realty, Tahoe City, CA (530) 414-1260 - Tahoe City, CA

Tahoe Real Estate Agent Helping Buyers and Sellers

Michael - Another interesting topic to really think about. Does home ownership = success and stability? Or does it just mean more pressure to make another payment and all of the responsibility that comes with owning your own home, so being a renter has a lot of appeal? I can see both side of this argument depending on where you are at in your life. I love the diversity of topics you bring to your readers!

Apr 06, 2013 07:16 AM

Beth Atalay

Cam Realty and Property Management - Clermont, FL

Cam Realty of Clermont FL

Michael, you've raised a great question. While renting may not be suitable for everyone, many choose to rent vs ownership for different reasons, one is the current economic state of our country. Whatever the reasons might be, there's absolutely nothing wrong with renting.

Apr 06, 2013 07:21 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Roger - and what a great combination it(and you) are!

Laura - it is interesting to think about and you can thank the MacArthur Foundation for their support($$$) of the research that led to this study(I sound like one of those voiceovers for Pledge Week at PBS or NPR, do you think?).

Beth - after going through the report, it raises some issues and points of views that may be biased but it does raise an issue in our country that has faced and continues to face many challenges.

Apr 06, 2013 08:06 AM

Pamela Seley

West Coast Realty Division - Murrieta, CA

Residential Real Estate Agent serving SW RivCo CA

Vews are changing on home ownership. When many lost their homes to short sale or foreclosure, they have no choice but to rent. In time they may or may not choose to become a home owner again. Some areas it may make sense to buy as it is less expensive than renting, but those may be areas struggling to come back and not the most desirable. There's no doubt investors flooded the housing market in last few years. Soon they will want to sell and if the price is right, to owner-occupied home buyers. Thanks for your thoughtful post today,

Apr 06, 2013 08:18 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Pamela - the economic downturn and the effect of short sales and foreclosures was addressed in the study. In fact, there were two groups of participants from Riverside CA - an area we both know was impacted heavily by distressed sales a few years ago and now a haven of sorts for investors. Will those former owners/now renters return to home ownership-- only time will tell. Thanks for your comments.

Apr 06, 2013 08:29 AM

Debbie Reynolds, C21 Platinum Properties

Platinum Properties- (931)771-9070 - Clarksville, TN

The Dedicated Clarksville TN Realtor-(931)320-6730

Michael, While I am a huge proponent of owning real estate I am also realistic enough to know it is not for everyone. If you don't want to take care of the property in regards to regular maintenance don't buy it. If you don't how long you will be in an area don't buy, etc.

Apr 06, 2013 10:08 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

When I lived in Newport Beach, the only way I could afford to buy an oceanfront home was to move to Ventura. Sometimes it is better to rent than to buy. Of course, living in Sacramento, most homes are so affordable here (by comparison) that almost everybody is better off buying.

Apr 06, 2013 10:39 AM

Michelle Francis

Tim Francis Realty LLC - Atlanta, GA

Realtor, Buckhead Atlanta Homes for Sale & Lease

Michael,

Interesting. When I was younger I was disappointed I missed buying my first home before I hit 25. (I was 25 and 2 months!) Now, if I moved to a new area (a few decades after my first purchase), I would be renting first.

In some countries its very normal to rent your whole life. What works for you is best, it's just not as simple as it used to be.

All the best, Michelle

Apr 06, 2013 12:09 PM

Dorie Dillard Austin TX

Coldwell Banker Realty ~ 512.750.6899 - Austin, TX

NW Austin ~ Canyon Creek and Spicewood/Balcones

Hi Michael,

What an interesting question! Many strive for the American Dream of home ownership..others like change and may be picking up and moving every other year..better to rent in that case! What ever works for you and floats your boat!

Apr 06, 2013 12:31 PM

John McCormack, CRS

Albuquerque Homes Realty - Albuquerque, NM

Honesty, Integrity, Results, Experienced. HIRE Me!

Michael, So many X-Factors are involved in ones choice to rent or own. Home ownership is not for everyone especially if they are very transient or mobile. Its hard recover hard cost over a short period of time and of course an unusual market never helps either. It still remains the American dream for many and we are here to help them find realize that dream.

Apr 06, 2013 01:51 PM

Amanda S. Davidson

Amanda Davidson Real Estate Group Brokered By Real - Alexandria, VA

Alexandria Virginia Homes For Sale

Michael, this is an interesting post. I'm going to read the article after this. I agree with home ownership not being for everyone. If they move a lot and don't want to rent a place out that they've purchased it's not a good idea. Real Estate is more often than not a long term investment. I'm a believer in owning but, it all depends on each persons circumstance.

Apr 06, 2013 11:11 PM

Curtis Van Carter

Better Homes & Gardens Wine Country Group - Yountville, CA

Your Napa Valley Broker Extraordinaire

Michael

I found this good read via a repost by Wallace Gibson. Glad she did for it does contain several points I can use in a future blog I was planning on the same subject. cheers cvc

Apr 07, 2013 01:52 AM

Scott Larson

BHHS/Utah Properties - Park City, UT

Park City, Utah Real Estate News

Michael, interesting report and some great points. I do think for most people if they are smart about their purchase, home ownership is the best way to go for long term financial well being, but as mentioned that is not the only factor to consider. There are lots of compelling reasons to rent depending on one's current situation, but for me, for the time being, I know I choose to be an owner.

Apr 07, 2013 05:35 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Debbie - you mention two excellent reasons why it may more sense to rent versus buy/own.

Elizabeth - the cost of real estate in certain communities can be quite prohibitive to many and Newport Beach CA is definitely one of the pricier cities in the country.

Michelle - in some cities and other countries, it's quite common to see life-long renters.

Dorie - maybe even living on a houseboat!

John - and with investors, we can assist them with purchasing investment property where tenants can be happy too.

Amanda - I agree with you.

Curtis - I'm glad you stopped by. Thanks.

Scott - I've seen reports that say most financially successful people own real estate but it may not be the right thing for everyone - I agree with you owning real estate is good for long term financial well being.

Apr 07, 2013 05:49 AM

David Grbich

Realty One Group - www.FindCARealEstate.com - San Juan Capistrano, CA

Orange County Real Estate - 949-500-0484

Hi Michael - an interesting post. Guess it depends on someone's needs - certainly times when renting makes sense. When it comes to the long term buying makes a lot of sense. Regards Dave

Apr 07, 2013 08:02 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Dave - for many people I agree owning your home is a good -- very good -- thing but there are others who are just not meant to be homeowners --- whether it be financial or just personal --- home ownership is not for everyone. I'm okay with that -- afterall, I represent investors as well --- everyone has to live somewhere.

Apr 07, 2013 09:37 AM