COMMENTARY: "Uncertainty"

Uncertainty. A word those of us in the real estate industry are beginning to know well.

Now heading into our sixth year of market depreciation, we do know some things are certain. It is certain that sellers will be unhappy about how much their home is worth today. It is certain that buyers will try to squeeze blood from a stone by continuing to write low-ball offers on homes that are already scraping the bottom on value. And it is certain that the economists will continue to prognosticate a market recovery…. or another market downturn… or a continuation of the status quo…. How’s that for certainty?
  

But here’s another thing that’s certain. People need a place to live. And the fact is, due to the lowest interest rates in decades and housing prices comparable to those in 1971, the cheapest way to live today is to own your own house.

With some buyers able to qualify for loans below the 4% mark, mortgage money is as close to free as it’s ever going to be. Add to that the sharp increase in rental prices (due to such high demand in the rental market) and you can be just about sure it is less expensive to own than to rent.

While I always advise caution when it comes to spending any large sum of cash, I am confident owning a home is still the right thing today. Here are some great reasons to own a home:

1. Save on taxes. Deductions for mortgage interest, property taxes and some closing costs on a new loan.

2. Pride of Ownership. There’s just something to be said for having this great place that is truly YOURS.

3. Freedom. What landlord is going to let you paint the bedroom Lilac Purple when your daughter just HAS to have that color? Being able to put your style and personality into a home is half the fun!

4. You’ll Live in a Better Place. In most communities, rental properties that are in tip-top condition are hard to come by and they come at a steep price. Buying a house and fixing it up to perfection guarantees you’ll always live in the castle you dreamed of.

5. Forced Savings. Instead of throwing away $2000/month on rent, you can count on some of that mortgage payment actually paying down what you owe. In 30 “short” years, if you don’t refinance, your home will be “free and clear”. Oh how I am looking forward to that day!

6. Stability. Living in one home, in one neighborhood, for a long period of time allows you to meet your neighbors, get to know the neighborhood haunts, and truly find comfort in your surroundings. Switching apartments every 12 months just isn’t all that appealing.

7. Sooner or Later This Mess Will End. And when it does, when the real estate machine starts appreciating again, those who bought during this slippery time at (what we hope is) the bottom will be so glad that they did. Of that, I am certain.