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Who Is Saying It is Time To Buy a Home? EVERYONE!

“Enough with the doom and gloom about homeownership.” – WSJ 9/16/2010

WOW! If that quote was attributed to the National Association of Realtors or the National Association of Home Builders, it would have been quickly dismissed. However, it was the Wall Street Journal that was calling for the end of the ‘doom and gloom’ talk surrounding real estate.

We are finally seeing a powerful backlash to all the recent claims that homeownership should never have been part of the American Dream. It is about time!

We have been posting on the financial advantages and the other non-financial benefits of homeownership for over a year. We must admit that, at times, we felt very lonely. It now seems that we are part of an ever growing army of believers preaching the advantages and opportunities available in today’s real estate market. Who have joined this cause? Let’s name a few.

The Wall Street Journal

In an article last week, 10 Reasons To Buy a Home, Brett Arends reported:

Sure, maybe there’s more pain to come in the housing market. But when Time magazine starts running covers that declare “Owning a home may no longer make economic sense,” it’s time to say: Enough is enough.

He then posted 10 reasons to buy a home today:

  1. You can get a good deal.
  2. Mortgages are cheap.
  3. You can save on taxes.
  4. It will be yours.
  5. You’ll get a better home.
  6. It offers some inflation protection.
  7. It’s risk capital.
  8. It’s forced savings.
  9. There is a lot to choose from.
  10. Sooner or later, the market will clear.

The Nation’s Real Estate Pricing Expert

Karl E. Case is a professor emeritus of economics at Wellesley. Professor Case is also co-creator of Standard & Poor’s Case-Shiller House Price Index and is recognized as the one of the foremost authorities on real estate today. In a New York Times op-ed piece earlier this month titled, A Dream House After All, he said:

I have never quite understood what the American dream really means when it comes to housing. For some people, it means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive.

Others, however, think the American dream is owning property that appreciates by 30 percent a year, making a house into a vehicle for paying bills. But those kinds of dreams have become nightmares for the millions of foreclosed property owners who have found themselves sliding toward bankruptcy.

But for people with a more realistic version of the American dream, buying a house now can make a lot of sense.

The Wealthy

The only segments of the housing market that are showing sales growth are the price points over $1 million. That market is up 6.1 % in the second quarter of this year vs. the second quarter last year. A recent survey showed that over 30% affluent buyers are planning to either build/buy a new primary residence or a second/vacation home in the next twelve months. It appears the wealthy believe now is the time to buy!

Everybody Else

Fannie Mae just released their National Housing Survey. The survey reported:

  • 82% of respondents consider homeownership important to the economy, up two points from January.
  • 70% of respondents think it is a good time to buy a house (of which 36% think it is a very good time to buy), up six points from January. This is also four points higher than the 2003 survey – well before home prices peaked – when 66 % said it was a good time.

Bottom Line

Our iconic financial newspaper, our nation’s real estate pricing expert, the wealthiest people in the country and 70% of everyone else think now is the time to buy a home. It probably makes sense to listen to them.


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13 replies
  1. Gene Taylor
    Gene Taylor says:

    Thank you once again for providing positive and factual information! This is the type of information we need to help us as we deal with our clients on a daily (hourly) basis!

    Reply
  2. Richard Blake
    Richard Blake says:

    All of the reasons listed above for owning rather than renting are valid, but they miss the single reason most important to me and my own family over the past 60 years of home ownership.

    During several short periods when we moved to a different state, we had to fit our family, with all of our personal likes and dislikes, into whatever our landlords decided to offer – rooms, property treatment, especially interior finish ( carpets, paint, built-ins, etc.).

    In each home we’ve owned since 1951, in Detroit, in Oak Park, then Los Angeles, in Birmingham(MI), in Ohio, etc., etc., we no sooner moved in that we bagan the changes, large and small that made that place “Ours”, a reflection of who we were. As each year passed, the home and the property became more a oart of what we were as a family.

    Most of our home buys actually made us a modest profit when we moved out. Some were small losses. That is truly beside the point. Sure they were mostly good “Financial Investments”, but what they gave us was far more important – a chance to form the place where we lived into that special place where a family is most happy, most secure together.

    Rentals – Bah Humbug!

    Speaking for my wife, for our 9 children, plus uncounted grand and great grand children,

    Sincerely,

    Richard Blake

    Reply
  3. Marianne LeBar
    Marianne LeBar says:

    The reason I am a 20 year homeowner has nothing to do with the historically flucuating real estate market conditions. I actually enjoy having a wonderful place to live, a roof overhead that I keep in good repair.
    I like my neighbors and make a point of getting to know them and our surroundings. My home is safe and quiet, my children can study and thrive in a peaceful enviornment.
    If you let the 24 hour news cycle dictate all you do in life you will never do accomplish anything you can be proud of. You will just be full of useless never ending chain of media fueled everchanging headlines.

    Reply
  4. Chris Head
    Chris Head says:

    Steve and KCM Crew, thanks for putting all these together. I remember when Time was THE news magazine to read. Now it seems like a communist publication and I’m glad the Wall Street Journal called them out on that ridiculous article against home ownership. As usual, great stuff from you all!

    Reply
  5. william klingman
    william klingman says:

    For what it’s worth…

    I am a Realtor, I have bought 3 more properties in the past 24 months. My investor clients are buying them at a sprinters pace. That should tell you something about what’s going on. This is the same situation that happened in the fall of 2008 in the stock market, those with guts and a positive outlook bought – they didn’t sell.

    Reply
  6. Robert Loder
    Robert Loder says:

    Excellent article, i am a buyer from the UK and i have invested in the US housing market in these tough economic times, it is my belief that we will turn the corner in the not too distant future on both sides of the Atlantic. Hold firm and get in why you can at good prices.

    Reply
  7. Mark Brian
    Mark Brian says:

    I am glad to see I am not the only person to see the “experts” that are constantly negative about housing are wrong. I still caution anyone that buying may not be right for them today, but there is no doubt that right now could be a great time for some of the very reasons that Brett Arends posted. Every person and every situation is different, but today’s real estate market does present some great opportunities if the time is right for you.

    Reply
  8. Elaine Lomenzo
    Elaine Lomenzo says:

    Thanks for a great, much-needed counterpoint to all the negative press out there. Here on Cape Cod, MA the fall market is typically an active one and, at least in our marketplace, this year is no exception. This is a uniquely opportune time for the second home market – prices, mortage rates and availability of properties are all in alignment. The time has never been better to realize your dream of owning a home on Cape Cod!

    Reply
  9. Debbie Hudnall
    Debbie Hudnall says:

    This Market is what we make of it ! (WITHOUT CHANGE EVERYTHING REMAINS THE SAME) We have to think outside of the Box ! step it up in every way. What doesent Kill us will make us much better. Having another Great Year and working Hard to keep it that way!

    Reply

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