Home ownership has enjoyed a well-deserved reputation as a crucial component of the so-called "American Dream." But for many people, home ownership is now perceived more as a nightmare than an essential element of the (admittedly somewhat mythical) "good life" that could be attained in the United States. Whether that negative perception is based on valid fears or little more than irrational overreactions to today’s market correction, it’s nonetheless a paradigm shift that should be of concern to anyone whose livelihood depends on real estate.

The perception of home ownership as a nightmare is easily understood given these realities:

 

  • A tsunami of foreclosures has forced large numbers of people out of homes they couldn’t afford.
  • Many homeowners now owe more than their home is worth or more than they can afford to repay. Whatever equity they had has evaporated or been misspent.
  • Despite foreclosures and fallen prices, housing is still relatively unaffordable. And now that gasoline costs upwards of $4.50 a gallon, more affordable neighborhoods too often mean long, expensive commutes to the nearest job centers.
  • Ever-rising property taxes have triggered a new wave of "tax revolts" across the country.
  • Homeowners face significantly higher costs for utilities, insurance and home improvements, repairs and maintenance due to natural disasters, inflation and global materials markets.
  • Wall Street analysts have spewed out piles of statistics to convince the public that a home is a worse investment than stocks or mutual funds.
  • Short time horizons, short attention spans and smaller households have created a class of renters-by-choice who could own a home but choose not to commit themselves to home ownership.
  • Fluid labor markets, a mobile workforce and high real estate transaction costs have made short-term home ownership a questionable financial proposition.
  • The prospect of diminished home values or minimal appreciation has scared off many people who otherwise might have been good candidates for home ownership.

     

And lastly, if you work in real estate, but don’t already own your own home, maybe it’s time for you to go ahead and buy one.

Marcie Geffner is a freelance real estate reporter and former managing editor of Inman News.

Copyright 2008 Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.

***

What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

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