By Robert Freedman, senior editor, REALTOR® Magazine
Karl Case of Wellesley hit the nail on the head yesterday in his balanced look at today’s housing market when he says the American Dream is alive and well because homewnership is first and foremost about the place we call home. As he puts it in A Dream House After All, “For some people, [the American Dream] means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive.”
Case characterizes today’s housing market as taking a well-deserved rest. Consumers’ expectations had gotten out of hand during the boom and now the market needs time to get realigned. And, as he says, it seemed to be doing that nicely, with steady gains, until recently, when the turnaround seemed to start fizzling.
But Case says a good part of the recent fizzle has a lot to do with the negative coverage in the media. “The steady drip of bad news about the economy has sapped the confidence of buyers, sellers and lenders,” he says. “And there is no understating the importance of expectations and confidence in this industry.”
Although financial considerations of homeownership should always be considered a secondary matter, Case does build a strong argument that today is a good time to buy when today’s favorable financial climate is coupled with the intrinsic benefits of homeownership. He says the drop in housing prices, continuing low interest rates, and existing tax benefits are very much working in buyers’ favor today—if buyers can get past the negativity in the media.
What’s more, the desirability of homeownership isn’t going to expire like the shelf life of a trendy financial product. “Real estate sales are unlike other financial transactions. You can place a rough inherent value on a stock or bond by looking at fundamentals: a company’s profits, price-to-earnings ratios, quality of its products and management, and so forth. But a house is worth what someone is willing to pay for it. That’s a very personal, emotional decision.”
Case, who partnered with Robert Shiller to produce the widely reported Standard & Poor’s Case-Shiller housing index, has no trouble commanding the attention of the media. His insight into the long-term desirability of homeownership—and the public policies that recognize its importance—provides just the right counter-balance to the negativity we hear so much of today.
[Editor’s note: To learn about the issues being raised in the media and what the facts are, REALTOR® Magazine is hosting a webinar Tuesday, Sept. 28, at 3 p.m. Eastern Time, with NAR Chief Economist Lawrence Yun and housing policy analyst Howard Glaser of the Glaser Group. Registration link.]