Home Ownership is Overrated! | The Frugalista

Home Ownership is Overrated!

by frugalista on August 15, 2011

home for saleDid I catch your attention? I’m dramatic. I was recently interviewed by CNBC about my views on home ownership. I’ve lived in Florida for many years and have often had conflicted feelings about the housing market here. When I first got here in 2000, homes were really affordable and then the housing prices increased to outrageous numbers. It was one of the hottest markets in the United States with people going crazy to try to buy. People were flipping homes right and left. We all know how that story ended up. The effects of the real estate bust still lingers. It’s impacted everything from the job market to government. When the housing market is sick, it’s really hard for a community to reach its potential. Personally, my apartment complex has been overrun by stray cats because people are leaving their pets behind. Also, two neighbors in my complex abandoned their properties. One had all of her goods thrown out on our grass. Ugh!

Despite having a real savings account now and knowing that I can get a nice condo for under $100,000, I am still not interested in buying. Why? It doesn’t fit my lifestyle. The likelihood that I will live in Florida for the next five, or even three years, is not good. To recoup closing costs and other investments in a home, I won’t be sticking around long enough. Yes, interest rates are low, but if you are getting a deal for something that you don’t want or need, is it a deal? Also, I work in media. I love South Florida, but it’s not a media capital. Tourism is the main industry. I do not work in the hotel or cruise industry.

I got this info from a Smart Money article on Home Ownership:
Warren Buffett, who has lived for more than 50 years in a home that cost him $31,500, made a resonant comment on this issue in his latest letter to shareholders of Berkshire Hathaway: “Our country’s social goal should not be to put families into the house of their dreams, but rather, to put them into a house they can afford.”

When I worked at a business television program, I remember producing a story about housing and home ownership. Over the course of a 30-year mortgage, a home’s value pretty much appreciates with the rate of inflation. I know we’ve been fed for decades that home ownership is the way to riches. I think it’s the way to own a home that you want to live in. And that’s not a bad thing.

If home ownership fits your lifestyle and you can afford it, I say go for it. It is an accomplishment and you deserve it , if it works for you. It would be irresponsible for me to buy a home, just because I can afford it. Home ownership, I feel is a lifestyle. If you move around a lot or work in a really unstable industry (media!), be sure to factor that in before you decide to buy a home.

Check out this article and video from Nightly Business Report on whether you should rent or buy.

Here is my CNBC appearance!

Do you own a home? How do you like it? Do you think home ownership is a way to build wealth? Does your mortgage stress you out?
Mike Licht, NotionsCapital.com, Flickr

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