It's been a while since I've posted, but I think I have to say something about the dismal home sales numbers just released today. In case you missed it, the National Association of Realtors reported that the number of pre-owned homes sold during July fell 27% compared with June. Ouch.
Why?? There are a variety of reasons, including but not limited to: the end of the tax credits; continued economic instability; everyone's at the beach. The NAR also says we have a "housing hangover," meaning those who were going to buy did so in April or May so they could close in June before the $8,000 tax credit expired.
Whatever the reasons, the numbers inspired quite a discussion at the office today. Some say renters can now stand tall and not be ashamed that they aren't on the property ladder. Others bemoan the fact that people won't be able to pull money out of their house to send to children to college. Some say they'll have to look elsewhere for a retirement nest egg. Which got me thinking: in these times, when many private corporations have killed the gold watch and lifelong pension, do people think of their homes as their pension plan, or do they think of it as the place they'll live in til they die?
What do you think? Is this the end of home ownership as we know it? Will people decide it simply makes more sense to rent than to buy? Will prices drop? (And if they do, will that perhaps lead more people to jump into the home ownership pool?) What does your house mean to you? Did you ever think of it as an ATM for college tuition, retirement, major purchases such as cars or vacations — and if so, have you stopped viewing it that way? And, finally, if house values aren't rising as quickly as they did during the go-go years, is that really such a bad thing??