Many thanks to burbed reader nomadic for sending in this provocative essay. And if there’s one thing we can rely on the Wall Street Journal for, it’s got to be meaningless flamebait!
Enough with the doom and gloom about homeownership. Brett Arends explains why owning a home is a good thing.
By BRETT ARENDS
Enough with the doom and gloom about homeownership.
Sure, maybe there’s more pain to come in the housing market. But when Time magazine starts running covers that declare “Owning a home may no longer make economic sense,” it’s time to say: Enough is enough. This is what “capitulation” looks like. Everyone has given up.
The Sept. 6 cover of Time magazine: This is what capitulation looks like.
After all, at the peak of the bubble five years ago, Time had a different take. “Home Sweet Home,” declared its cover then, as it celebrated the boom and asked: “Will your house make you rich?”
But it’s not enough just to be contrarian. So here are 10 reasons why it’s good to buy a home.
1. You can get a good deal.
2. Mortgages are cheap.
3. You’ll save on taxes.
4. It’s your house; you can do what you want with it.
5. You’ll get a better home then a crappy rental property.
6. It offers inflation protection.
7. Sooner or later real estate prices will head up again
8. It’s forced savings.
9. There is a lot to choose from.
10. Sooner or later, the market will clear.
I had no idea The Wall Street Journal was a wholly-owned division of the National Association of Realtors. The calendar says it’s September, not April, so this isn’t a joke they’re playing on us either. Either this writer just came back from a Kool-Aid party or he’s heavily long in residential construction. Then again, it seems this isn’t the first time he’s made a complete idiot of himself just to generate traffic.
This is the most bizarre mix of naiveté, insouciance, and out-and-out Lawrence Yunnery. Just as an example, here’s Arends’ reasoning for #5:
In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you’re better off buying.
I don’t know where these “many parts of the country” are, but I suspect they’re in places where homes are so cheap, anyone who can buy already has. In high-income, high-housing cost regions, such as New York City, San Francisco, and Silicon Valley, rentals are readily available. Knowledge workers are often on the move, and either won’t commit to buying, or simply rent their home out when jetting off to another assignment.
I’m sure burbed readers will find plenty of fault with this list, and so conclude with this simple rebuttal:
Top 10 Reasons Not to Buy a House Now
10. Enjoy the bankruptcy-free lifestyle
9. Can live close to work no matter where work ends up being
8. No public record in county recorder’s office of where you live
7. Time Magazine finally catches up with a trend that you’ve been ahead of for years
6. When you’re tired of being underwater, you just climb onto the shore and towel off
5. Three words that don’t apply to you: Monthly equity burn
4. You want to have all your cash on the sidelines with interest rates this low
3. Payback for those smug jerks showing off the toys they bought in 2006 from mortgage equity withdrawal
2. Landlords have plenty of people to evict ahead of you if you’re a few days late with the rent
And the Number One reason not to buy a house now:
1. It’s the economy, stupid.
Update: Looks like several burbed readers couldn’t wait for this article and the party has already started. Here are some of the lists they’ve come up with so far.
From burbed reader Alex:
Top 10 reasons to delay buying a home
1) better deals are coming
2) mortgages will get cheaper
3) you’ll save more by avoiding the impending price drop
4) you don’t have to maintain the house (change light bulbs, draino) if you rent for a while longer; if your big sh*t clogs the toilet, just call the property manager
5) for the same amount of money, you can get a much better rental than a crappy house
6) you’re protected against deflation
7) it’s forced saving by not throwing your money away at depreciating assets
8) real estate ain’t going up for a loooooong time
9) there will be even more to choose from in a few years
10) the market will clear in a few years when the shadow inventory is finally put up for sale and the government stop d*cking around with their feeble market-propping measures
This would be a perfect list if only the author had properly spelled out the word “ducking.”
From burbed reader DreamT:
Top 10 reasons to buy a home now
1. If you don’t buy it, someone else will. You wouldn’t want to be a loser, would you?
2. Grass will be greener than your current place, which has none.
3. You can mock the renters, or treat them with contempt, or just haughtily ignore them
4. Now you Belong!
5. Your wife’s happy. Your kid’s happy. If your family’s normal, you’re therefore happy.
6. Nothing worse than idle money sitting on a savings account. Make it work for you! An empty savings account is a good savings account.
7. [Another burbed reader] will be your friend, or your BFF if you’re Chinese and like to eat at Dynasty.
8. You’ll get promoted, just like [Another burbed reader]. It’s inevitable.
9. You can stop wondering when is a good time to buy. Done!
10. You missed your chance yesterday. Care to make the same mistake again today?
Top 10 reasons not to buy a home
1. Surprise – you don’t own it – the bank does, then whomever you pay property tax to who can repossess your property.
2. No matter how many times you water the plants, they still die – or they grow too fast.
3. That roof shingle flew off again, and what’s up with that toilet anyway. Oops, what’s that sound, was that the tree?
4. You’d only get pissed off at the renters who don’t keep up their grass and litter the sidewalk. Not to mention the ruffians who dare walk on Your neighborhood park.
5. There’s no money left for a good old hostile takeover.
6. You can walk away when the meth lab in the garage explodes. The owner’ll clean it up.
7. You’ll have enough money left to buy that promotion.
8. You don’t have to suffer any kind of kinship to [Another burbed reader].
9. You can mock the homeowners who turn blue every time a foreclosure rears its ugly head in the neighborhood. And nothing compels you to check zillow valuations six times a day.
10. You were smart enough not to buy in 2006, you’re not going to be dumb enough to buy now!
Please add your owns lists on the best reasons to buy or not to buy. That is today’s question.