Thursday, July 24, 2008
Putting lipstick on this pig...
Boy, talk about putting a “spin” on the news. A recent news feed that I get carried a story about the results of a recent poll of home buyers. This is how they started the story - A recent survey conducted by Harris Interactive on behalf of Move Inc. shows that 44 percent of home buyers expect improvements in the housing market when the new president is installed next year. Even the headline over the story was positive – Poll: Housing Market to Get Better with New President.
Two days earlier, another news feed that I get used the same poll and the same results under the headline “New President Won’t Make Any Difference in Housing Market”. Of course that article referenced the 56% of home buyers who don’t expect a new president to make a difference and you can imagine that it went on to paint a doom and gloom picture for the next few years. The writer of the positive spin article should probably be a political speech-writer, since it appears that he/she could put lipstick on a pig and call it beautiful.
Anyway, the article went on to say that in the same poll, 81 percent of home buyers are still nervous about the current housing market (well, DUH!) and say there are barriers between them and home ownership. Respondents cited the cost of a down payment (28 percent), their annual income level (20 percent), lack of confidence in the economy (26 percent) and high home prices (31 percent). Anyone sighting high home prices either hasn’t looked lately or are just trying to imagine themselves in too much house. There haven’t been lower prices in years. And as for the annual income issue – well, yeah, you do have to be able to afford it or find something cheaper.
Despite those reservations, the survey indicates underlying demand for home ownership is healthy. While nearly half (41 percent) of current homeowners do plan to purchase a home again, 80 percent of all renters plan to purchase a home someday with 47 percent planning to purchase a home within the next five years (again with the positive spin, since that means that 53% aren’t going to do anything in the next five years). Most home buyers (78 percent) are also willing to make sacrifices to save and earn extra income for down payments, and will compromise on neighborhood features and residential amenities in order to buy a home in the current market.
I think what we are seeing is the settling in of the reality that the great American dream of home ownership will remain just that – a dream – for many people, for longer than they imagined. We tried the other approach – no money, no job, no problem, here’s your mortgage and that didn’t work out so well. There are always going to be some people in our society who can’t afford to buy a house. That’s why other people build and run apartment complexes and rental homes. Owning your own home wasn’t, isn’t, and never will be, an entitlement.