The View - Suze Orman
When I find myself working from home, during the middle of the day, I frequently turn on "The View." I've been watching it for many years and always enjoy the guests and the show co-hosts who have varied political leanings, experiences and opinions. Today's guest was Suze Orman, the financial advisor. I'm a big fan and generally like her conservative opinions on saving, spending and investing money. However, in today's topic about real estate, I thought the news she delivered was a bit depressing and I can't help wondering about its accuracy. Suze Orman said that she felt the housing market would not fully recover until 2025. She says the sobering statistics show that at least 1 out of every 5 people has an upside down mortgage and that the homeowner would do just about anything to be rid of the property that's ruining his life. Only if you can get a "steal of a deal" should you consider buying a house, warns Suze Orman. Otherwise, "you should rent" until the economy improves, she advocates.
About a year or so ago, I heard Suze Orman say the market wouldn't recover until 2015. While this was certainly not good news, it still felt within reach. Halfway done with 2011 and we're really not far away. But now, she's pushed it back to 2025 and this feels completely unattainable. Since I'm in the business, I prefer, as we all do, to maintain a positive outlook. I still believe in the need for homeownership. Several months ago, I replied to someone asking for thoughts on an article that had been written attacking homeownership. At the time, this is how I felt:
The recent Times cover entitled "Rethinking Homeownership" detailed the disadvantages of owning a home during these very tumultuous economic times. In contrast, the NAR survey, chose to focus on all the social benefits that have traditionally been attached to homeownership. In all likelihood, homeownership is "not a goal that should be pursued by everyone at all costs" but historically, the leaders of our country saw it as the path to the "American Dream" and I still believe it's worth pursuing.
Painting a room any color you wish is certainly a plus, Much more important, however, is that "homeowners tend to have more social ties than renters, as they have time to create lasting relationships, and are more involved in local politics and community happenings." A completely positive, domino-like, effect can only come out of greater social ties. You need to feel like part of a community in order to be happy there and successfully raise a family.
When you've lived in one place your whole life, it becomes a part of who you are. You have roots there. In time, your children will grow up, and perhaps they'll move away during the years they're pursuing their education and are enjoying a single lifestyle. However, to a town they know so well and that means to much, when the time comes to marry and to start a family, they will often come back. There's something to be said for the continuity of any family name in a community. It's a good feeling to hear "I knew you when..."
Finally, I always considered homeownership a type of forced savings. When it's time to sell your property, the equity will be there waiting for you. The money is not lost.
Seven months later, this is still how I feel, but surrounded by so much gloom and doom, I wonder if we have any shot at recovery? Can this be a self-fulfilling prophecy?
For Rent sign courtesy of Interpunct's photostream via Flickr.com's Creative Commons License.
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ABOUT THE AUTHOR: Graduate REALTOR Institute
Jill Sackler, NYS Real Estate Broker Associate based on Long Island's South Shore
Specializing in Lifecycle Real Estate Transitions
©Jill Sackler 2010