My two cents today on housing. There have been a lot of stories lately about home ownership: that it might not be a part of the American dream. Some pundits have been saying that it might not be right for many Americans. “ Let them be tenants” - Kind of like “Let them eat cake” Look what happened when the government made it easy for people to buy homes. There were all kinds of programs to get people into homes. Once all of these Americans purchased their homes, they then defaulted on the loans or either walked away as the media would have us believe. Why did these people default? bad people, stupid people, bad banks, or bad realtors? It was none of this. I do think there were a lot of greedy people, but I believe we focused on the wrong criteria for home ownership. We made the FICO score KING. FICO determined what and where people could buy. Not whether people could pay the monthly mortgage payment. The other week, I listened to some financial wizard on some public talk radio give financial advice to the listeners. He felt owning a home was not the best way for people to invest for their future. People should be in the stock market or mutual funds. I just think this is wrong. Can you live in your stock investment? If you can pay rent: why not rent to your self? The problem is we bought homes to big, or through financial schemes that made everyone else rich (bankers, brokers, realtors, lawyers, & insurers) but the home owner. I just feel if you can pay rent then you should be able to buy in that community. People also bought homes because they believed the price would go up, or their pay would go up. In other words they could afford it tomorrow, but not today. That theory works if prices continue to rise, but we all know what happened. The ARM reset, the balloon payment was due, principle was now required, or there was no job - oh and the value of the home went down. I dont just blame businesses around the housing industry, buyers and sellers were to blame too! Sellers and buyers got greedy. They wanted the dream now, they wanted their cake and to eat it too! Why will people rent in a community, but will not buy a home in that community. They have to trade up. They go to a community they can not afford. So if we are all renters who is going to own our homes, the rich, the government, or big corporations via stock shares? Do communities fall apart because share holders want a bigger return instead of repairing the roof? And what about pride of home ownership? Communities with high home ownership percentages tend to do better: lower crime rates, better schools, happier people, healthier people, and more social interaction.* The opinions expressed in todays rant are just opinions. They are only my thoughts and views from articles read on housing, the economy, and life in general. They are most likely quite biased because I am a Real Estate Agent. I believe everyone should own a home at some point in his/her life. * According to a report: Social Benefits of Homeownership and Stable Housing , NATIONAL ASSOCIATION OF REALTORS® , Research Division , August 2010
Posted on: Tue, 15 Jul 2014 13:24:23 +0000
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