Give Me a Break

January 6, 2012

Posted by jim_gillespie in General

Last night someone sent me a link to an article that troubled me. It’s one thing to use a negative headline to draw people in, but writers must provide a balanced article for the reader. What really grinds my gears are articles which take a controversial position to communicate a biased opinion under the guise of ‘news.’

The American Dream is Alive & Well

The article, The New American Dream: Rent, Don’t Buy isn’t just one of those shocking headlines; it’s two pages of doom and gloom that frankly is getting old. First of all, how can this writer say that the new American dream is to rent, when the majority of Americans, 66 percent according to Fannie Mae, consider homeownership a safe investment? Sounds to me like the American Dream is still a dream that includes homeownership. Who doesn’t daydream about a place to call home – a place that’s all their own? A home is about more than its dollar appreciation. It’s about the color of paint you pick for the nursery, the school district in which your children will grow up and the neighborhood movie theatre where you had your first date…and I could go on and on. When people do move it’s not just for a return on their financial investment. It could also be that they need a backyard for their dog or mom got a great new job in another area.

Plus, how many times do we all have to read an article that only has one source that represents an extreme point of view and yet it serves as an overarching example? I know homeownership isn’t for everyone, and I routinely talk about the types of buyers best suited for homeownership. But if you are someone with the financial wherewithal and have a lifestyle need, I truly believe this is the best time in my 35 years in real estate to purchase a home.

Bottom line: some of the points found within the article have been tossed around for several years and I couldn’t disagree more strongly. Study after study shows how valuable homeownership is to individuals and to our economy. A Harvard study reports that housing accounts to 18-23 percent of the country’s GDP. NAR and Nandi say that a home sale adds $60,000 into the local economy and that a local job is created every time two homes are sold. And this isn’t even taking into consideration the immeasurable emotional value found in owning a home.

I’m confident that once we are finally out of the woods of this great recession, the American Dream of homeownership will thrive as it always has — as it does for millions of Americans even today.

Homeownership; American dream; buying vs. renting; Coldwell Banker; real estate

Guest

The guy who wrote the other article needs to rethink his philosophy on what a home is. It is a place to live, not an investment. If you think of a home as an investment, you will panic and sell your investment because the “market value” is declining. I know of several people who walked away from homes where they could afford their payments, simply because the perceived value of their home is now less than their loan amount. If you properly view your home as a place to live, then you don’t worry about any perceived value unless you actually have to move or sell. If you ever were forced to move or sell your house later and you still owed more than the value, you could still do the same thing and walk away.

Another thing he doesn’t consider is the fact that so many “homeowners” that are fleeing back to renting never really invested any money into the house in the first place. So they considered their home to be an investment, but they took out a 97.5% FHA mortgage, had the seller pay closing costs, and then had the government kick in the minimal down with the refundable credit.

I can’t buy now, but I hope to be able to within the next two years. I am hoping that interest rates remain low. With the return of so many buyers to the rental market, rental rates are much higher than a mortgage. A house on my street was recently rented out for $1,750 per month. Based on the approximate value of the home and the current interest rate, a mortgage including all property taxes would only be about $1,300.
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http://www.ExcellenceDuo.com Jonathon Villaescusa

Great article, and I’m tired of hearing all the negativity about homeownership when it is in fact the dream for all Americans! One way or another this thinking will shift just wish it was sooner! I’m a Realtor out in California and I’m really tired of the media selling all the wrong information….we need to believe in our country and get off the fence. Whether your rent or buy; if you lose your job you get kicked out! At least with owning a home you pay less(at least in Southern California Rents are higher then Mortgages) and you get the tax write off at the end of the year.

Keep up the better mentality & I’ll do the same on http://www.ExcellenceDuo.com