By Attitudes about home ownership are changing. The latest housing topic to hit the headlines is the notion that the allure of owning a home isn’t what it used to be – and for many reasons. For those struggling with job security or unemployment, owning a home looks more like an economic trap than a path to economic security.
As with most housing news, this sounds so grim on the surface. But there really is a glimmer of hope and good news if you dig. These changing attitudes are bringing back a healthy outlook on ownership: owning a home is a lifestyle first, not an investment choice.
True, owning a house under normal circumstances can be the best way to build some financial security. But it’s not a mutual fund or stock portfolio.
Even through the housing boom, you’d find that the shrewdest real estate counselors would say not to view your house as a financial investment like stocks. Neighborhoods are not markets. Patios, kitchens and yards are not trading floors – these are the floors where we live our lives and create memories with our families.
Now that the market has taken a tumble, we are finding our way back to these basics. A recent story in the Wall Street Journal covered a survey from Fannie Mae that showed a decline in the number of people who consider housing a safe investment.
But guess what? No investment is safe. Just ask all the folks you know who had planned to retire early only to watch their 401(k)s get eaten alive by the financial collapse in 2008 and 2009.
The real point here, though, is that housing for the average American cannot be approached from purely an investment standpoint. We all know it’s much more than that. It’s your home first. It’s your lifestyle. It’s your family’s gathering place. And it’s also a way to build savings in an asset rather than give your monthly housing check to a landlord.
So when I hear that fewer people now see housing as a safe “investment,” I think that it’s good that fewer people are looking at it in those terms. I’m willing to bet that as soon as we see some real movement on job creation, that sense of security will start to spread through America once again.
And what’s the first thing you’ll see folks do when they are more financially secure in their jobs? Buy a house, of course – because, hey have you seen how great the market is for buyers right now?
Archive for September, 2010
Intero Insider: Homeownership’s New Image
Intero Insider: What’s the Next Big Solution for Housing?
As expected, the countdown to the final closing days of the homebuyer tax credit has brought on more debate. Should the government create more programs aimed at boosting home sales or just stay out of it and let the market correct itself?
Many of the programs that were created to help homeowners and home buyers have been utter failures. Sure, the tax credit boosted sales while it was in place. But even now that conditions arguably are better for buyers – record low interest rates and lower prices in many areas – home sales continue to slog in many cities.
Another program may or may not help home buyers or struggling homeowners. But what happens when it ends? With the home buyer tax credit, we saw an artificial boost to the market, followed by the inevitable fall in sales as the immediate incentive went away.
So what’s next? As I’ve said in this column before, it’s all in the jobs, really. If the government really wants to help housing and homeowners then we need to think about security, incomes that are in step with mortgage payments, and a confidence in the future.
With interest rates as low as they are and the opportunities that abound for buyers today, it only makes sense that the missing key here is stability in incomes. Tax credit or no tax credit, life goes on. The reasons for buying and selling real estate always withstand the test of time – through markets good and bad. It’s a roof over your family’s head. It’s pride in ownership.
The government might do better to focus on helping those families who feel stuck – the ones who are underwater on their mortgages. They want to be owners. They have the means to pay. But they feel caught up in the waves of the mortgage mess that inflated the values of homes when they happened to buy. Another tax credit is not going to help them continue to pay a mortgage on a house they know they can’t sell without a loss.
Let’s get to the root of the problem, which isn’t necessarily home prices or the pace of sales. The real problem is a lack of stability and a lack of economic security. That’s the glue that holds together American ownership.
Intero Insider: Foreclosures Get a Real Rescue
Some good news came on the housing scene the other day: federal housing officials announced nearly $1 billion in funding to buy up foreclosed properties. The money will go to state and local governments so they can purchase, redevelop or demolish these properties.
Foreclosures have become the face of this recession. They can be like a disease that whisks in and infects an entire neighborhood or metropolitan area. The anti-American Dream, foreclosing on a house symbolizes rock bottom for a family’s financial situation.
But the new cash infusion should help to turn it around. Foreclosure is bad, but it can also symbolize a new beginning. If the funds can help state and local governments to transform foreclosures into much-needed affordable housing and rentals, then ultimately it’s better for the community, the local housing markets and local economies.
So far, the money seems to be headed in the right direction. Nearly half of the $970 million will go to the states hit hardest by foreclosures: Arizona, California, Florida and Nevada. Another big chunk is going to states in the Rust Belt, which have also been hit hard by foreclosure and tremendous job loss.
The government said funds can be used to buy property, demolish or rehab abandoned properties, and provide down payment and closing cost assistance to low-to moderate-income buyers, which should help to pump some life into this market segment.
I think it’s a much-needed boost and money well spent. We’ve said all along that there are opportunities in this market despite the gloomy numbers and forecasts. Here’s an opportunity for the state and local governments not only to create a better housing situation for some residents, but to create jobs associated with demolishing and rebuilding, boost confidence and improve their communities.
That’s real forward motion!
Intero Real Estate Services, Inc. now offers property search in 13 languages
By Leading U.S. brokerage announces website feature enabling easier search for buyers around the globe.
CUPERTINO, SILICON VALLEY, USA – September 13, 2010 — Intero Real Estate Services, a leading U.S. real estate brokerage that has expanded its brand globally, as a franchisor, through Intero Franchise Services, Inc. and Intero International Franchise Services, LLC, announced that it now has the capability to search any property within MLSListings on InteroRealEstate.com in 13 languages, expanding home search capabilities to buyers more comfortable using their native language.
The new translation feature makes finding property easier for the company’s international customers as well as Intero’s domestic buyers, which represent a widely diverse demographic. It is also vastly more user-friendly and accurate than “machine translation” tools, which many real estate companies currently use. Visitors to InteroRealEstate.com can be assured that native speakers have translated property information, with special attention to real estate terms.
The language option is very simple to use. Just visit InteroRealEstate.com and choose among the languages listed at the bottom of the property search box. Once chosen, all the search parameters, listing results and property details will then appear in the user’s language of choice. Languages available include English, Spanish, French, German, Italian, Russian, Japanese, Chinese Traditional, Chinese Simplified, Vietnamese, Portuguese, Polish and Korean.
“At Intero we have realized that our consumer reach goes beyond the U.S.,” said Gino Blefari, President and CEO of Intero. “Recognizing our global audience, it was important for us to make the real estate Internet experience easy and understandable – and to invest in the technologies needed to make that possible.”
“Intero now offers franchise opportunities to entrepreneurs around the globe serving incredibly diverse markets,” Bob Moles, Chairman of Intero added. “Offering a compelling online real estate experience in any language is critically important to their success.”
Concludes Blefari, “Innovation is our commitment and in this case that means delivering a better solution for non English-speaking buyers than our competitors. I believe we have made that happen.”
Intero Insider: Google Says Hello to Real Estate
Google is an economic force to be reckoned with here in the Bay Area – and especially in Silicon Valley. The Internet pioneer employs more than 20,000 people, and they would seem to be among the happiest employees on earth.
The company’s latest news to hit the streets: it has jumped into real estate.
This news, however, is probably not what you’d expect. Google did not release an all-encompassing super-powered Internet search experience for home listings. Rather, the Mountain View-based giant is creating an $86-million Low-Income Housing Tax Credit (LIHTC) fund that will subsidize the construction and operation of 480 affordable rental units in seven communities in the West and Midwest for seniors and low-income families.
Google must have realized that there is no shortage of ways to help in the real estate arena offline. The fund apparently is not the first effort – Google recently invested in two other low-income housing projects for seniors in the San Francisco Bay Area and Los Angeles County.
So far, none of the projects have been in Google’s backyard in Mountain View, but it’s not really Google picking and choosing where the money goes. For that, they rely on the fund manager.
It’s nice to see philanthropic efforts by major U.S. corporations hit home like this. Affordable housing indeed is a problem in many areas and may get worse if the economy continues to disappoint.
Google’s investment comes at a time when many developers of low-income housing projects face huge financial hurdles and lack of funds. It is unusual for a technology company to fund projects like this. This move shows how the investor base for affordable housing is expanding beyond traditional means like banks.
It will be really interesting to see whether other large companies follow suit. As I mentioned, there are certainly a lot of projects needing funding and affordable housing is a social issue that is easy to get behind.
The Intero Insider
A weekly e-newsletter with fresh market data and candid insights from Intero CEO Gino Blefari
