The New Yorkers‘ financial writer, James Surowiecki, in “Home Economics” calls into question our nation’s obsession with homeownership. Though homeownership makes sense for most people in the DC Metro area, it does not make sense for everyone.
Surowiecki brings up several interesting points in his article, including a statement that our elongated economic slowdown would be shorter if we weren’t a nation of homeowners, but rather renters that could pick up and move more quickly and adjust to changing environments. He suggests our houses keep us chained to our communities and slow down the natural market correction process.
Indeed, you should evaluate the risks of owning a home – just as you would evaluate the risks of any investment that cost hundreds of thousands of dollars. Along with those risks, add to your spreadsheet the list of benefits. Sure you’ve heard of the standard list everyone tells you about including tax deductions, return on investment dollars over time, and equity built up by paying down the loan, but isn’t there a lot of value in some of the intangibles?
What about the pride you feel when you sign on that dotted line and know you’ve accomplished something most people in the world cannot do? Do you know how much Argentines would give to be able to buy property through bank resources at 6 percent intest? Some of them gave their lives in the economic crisis in that country in the late 1990s and early 2000s just to have that right. Can you image a line outside of Kenyon Square condos in Columbia Heights full of people ready to die to have the right to buy?
What about the memories you build for you and your family as a homeowner? I remember at age 12 my parents sold their home in Wyoming and we moved to Iowa while my Dad attended Iowa State University. We were renting that home and I remember, quite vividly, a difference in attitude toward the home and the neighborhood. We were just visitors.
Don’t rush into your decision to buy a home. Make sure it is the right decision for you. As Realtors we can have that dialog with you and help you come to the right decision – for you.
Have you been renting for many years and have the financial resources to buy – but haven’t? We’d love for you to share your perspective here.
Tags: Benefits of owning a home, Buying versus renting, Economic slowdown, Homeowners, Homeownership, James Surowiecki, Risks of owning a home, The New Yorker
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on Wednesday, March 12th, 2008 at 10:00 am.
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March 13th, 2008 at 10:11 am
I’ve been a renter, a home owner, and a renter again. You and the New Yorker article raise some interesting points.
When I owned my condo, I felt pride in owning my own place. Now, back in an apartment, I care much less about the condition of my residence. I preferred making mortgage payments to rent payments. I think it’s ridiculous that the government gives homeowners such a substantial tax write-off, but when I owned my condo, I did enjoy taking it.
And, in the back of my mind, I’m always plotting my next move. (The flip side of that mindset is that it helps me save; there’s no bigger deterrent to buying a big screen TV than thinking about having to move it.)
But if my wife and I owned our home right now, we’d be worse off. I am self-employed and can work from anywhere as long as there is a computer, an Internet connection, and espresso. My wife is looking for a new job. Because we aren’t attached to any property–especially in what’s a difficult market for sellers–she has the freedom to take the job that interests her the most, regardless of whether it’s here in DC. We have the freedom to go anywhere. So, as you put it, it depends on our personal circumstances.
Now, if in 10 years we have kids and are looking for a stable environment in which to raise them, buying a house seems like a no brainer.