Is real estate “The Great Lie?”
Writing as author of “Diary of a Financier,” a blogger on The Buttonwood Tree provocatively argues that costs beyond mortgage payments suggest that real estate and housing are “not terrific investments.” Says the post:
Most suggestions otherwise are a huge lie, perhaps The Great Lie. The Lie is perpetrated most in the commercialization of the “American Dream”: a white, picket fence for every man, woman, and family. Non-income-producing, residential real estate is broadly a money pit. For long-term holding periods (5-20 years), the value of this real estate is severely eroded by its cost of carry, including Taxes + Insurance + Maintenance.
Although I have often expressed my own concerns about The American Dream, I have to wonder about Continue reading
Beware the stampede of opinions about potential homebuyers. Those views are trampling conventional wisdom by asserting that the American Dream is dead or dying.
Last week, momentum swelled around the idea that many folks are choosing to rent a home rather than buy one. Such consumers fall into two groups: Those for whom it is their only option because of finances and those who lack enough confidence in real estate to risk a decline in the value of their property.
I don’t know that the herd of economists and analysts wiser than me is wrong, but the volume and consistency of reports about the decline of American Dream was remarkable.
(Most of the links below have appeared or will do so in my Weekly Roundup on Fridays, on the Service You Can Trust Facebook page, on Twitter or some combination.)
Just look at the drumbeat of evidence over the last couple of weeks — for example, what James Bullard, president and CEO of the Federal Reserve Bank of St. Louis observed on Friday: Continue reading
An op-ed piece in the New York Times this week drew a tweet from a broker friend of mine saying that the authors’ points were “inane.”
Even as a dedicated social and economic liberal, never mind real estate broker, I have to disagree with him. In earlier posts, I have confessed to finding myself in the uncomfortable position of questioning why the American Dream has to consist of homeownership.
A roof over heads is a roof, whether owned or rented. Shelter is shelter.
Since the contention that home ownership stabilizes neighborhoods has yet to be proved, what are the other justifications for homeownership?
Try to enumerate the advantages of homeownership, and I’ll bet Continue reading
Here’s your chance to catch up with news included to inform, enlighten and perhaps even entertain you. To read about The Big Apple, check out the other of today’s posts and look for Out and About on Tuesday. And have a very happy Independence Day!
Fannie Mae and Freddie Mac may seem like distant galaxies, light years from our world as we know it.
But the proposals last week by the Obama administration to phase them out could have a profound affect on all buyers and sellers as early as this year.
To be sure, a proposal is a long, long way from congressional action, and self-interested parties such as the Mortgage Bankers Association already Continue reading
Depending on news volume, this Friday feature may not–but probably will–return before Jan. 7. Please do check back between now and then for occasional posts.
Meantime, here’s your chance to catch up with real estate developments included to inform, enlighten and perhaps even entertain you. To read about The Big Apple, check out another of today’s three posts.