Since June is Designated as National Home Ownership Month, let’s look at the state of the Homeownership with the statistics, facts and reasons for the same.
As a background, some of you might not know, since the early ‘70’s there has been an obsession by pundits and statisticians to monitor and track Home Ownership Trends. As a Beverly Hills Realtor, who has been in the local greater Los Angeles Real Estate Market for over 22+ years, I always appreciate and enjoy these types of discussions. Partly because I can get a better understanding of what directions the Home Ownership Trends are heading to. As well as when I hear blatant misinformation, I can educate and correct the misinformation with facts and local statistics.
Headlines from the news media often paint a gloomy picture and provide stories to substantiate the declining home ownership rates in the United States. The “experts” like to focus on Age Groups as one of the reasons for this “decline”. Then when that is refuted, they shift directions to focus on ethnic and cultural reasons.
The Reality is far from it.
According to Statista.com The homeownership rate in the United States amounted to 64.8 percent in 2018. The homeownership rate is the proportion of occupied households which are occupied by the owners. This reached its peak in 2004 before the 2007-2009 recession hit and decimated the housing market. The rate continued to fall until 2016 but has begun to increase again since then.
There isn’t one single reason why people buy or not buy a home. Let’s look at the numbers. What is 35.2% of the country’s population? (Population 328,231,337 per US Census Feb,2019) Now with that said 64.8 % of the population translates to about 212,693,906 reasons why people buy homes!!
I remember my father talking about buying a home and he had two main reasons. Not sure which had a higher priority for him. They both were equally high on his list and they motivated him to buy a home for his family.
One of them was, if he does not buy now, he will be priced out of the home buying opportunities. Keep in mind, this was in the early 1970’s when Inflation started getting out of control. Prices and Interest rates began to climb. He read an MIT Study and was convince with facts and data. The second reason was, that he was tired of the various landlords who would tell him what he could do and could not in his home. Just to mention a few examples, such as what color for painting, or putting nails where he wanted to. The on-sight landlords were complaining, that we were always laughing and being too cheerful most of the time. As I was growing up and writing school reports the incessant sound of my typewriter was bothering them. Anyway, you get the idea.
My take it is, the primary reasons why people buy or do not buy can be boiled down to the willingness to Sacrifice and make Commitment coupled with a Lack of Affordability. When my father bought his house, he paid $41.500.00 and had double digit interest rates. Our family had to sacrifice on luxury items and my parents sacrificed on vacations etc. They were stretching to be able to buy their home, but they had a Commitment to the concept of Home Ownership as well as had the responsibility that the Mortgage gets paid first and then everything else follows. So today in the greater Los Angeles area the median home price is around $850,000.00 hence the affordability is equally challenging and the same three ingredient calls for homeownership.
In case you are interested this is the voice of experience, I was a homeowner in Waterbury, CT when I came out of the US Army. This was thanks to my father’s influence and help with the down payment. I was not responsible enough to save money, I was having too much fun in Europe…
Then when I moved to Boston, MA and ultimately Los Angeles, CA I transitioned into becoming a Tenant. Why because I had a different attitude, I was experiencing a different perspective.
What I call in hindsight, is the “Champaign Taste & Beer Money” concept. I lived in more desirable parts of Boston as well as in Los Angeles. Keep in mind by the late 1980’s to 1990’s these areas became out of reach for my budget to buy, but not what my tastes wanted. Hence, I had a few choices to make ‘rent’ or move to less desirable areas to buy.
This of course is a normal process all potential buyers face and decide what to do. Ironically choosing the direction becomes a judgement call and some people make good judgements for the long run and make sacrifices for the short term others do not.
I am a believer of Homeownership will bring you peace, tranquility and in a long-term financial stability. This is not just a Beverly Hills Realtor speaking but a home owner who has been on both ends of the spectrum.
If you are looking for a knowledgeable, focused and goal-oriented Realtor in the Beverly Hills area who will help you achieve your Real Estate goals, please reach out to me directly!
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