From “All Things Real Estate,” Volume 1 Issue 2
Remember as a kid when you would struggle with round-tipped scissors, construction paper and crayons to create a Valentine’s Day card with a positive message for someone you cared for? (Boy, am I dating myself!)
As we enter February, I want to give you my adult version of that Valentine’s Day card message.In the first place, the Dow Jones Industrial average is flirting with staying above 12,000 points, something not seen since the summer of 2008 and one signal that the economy is growing again.
In addition, applications for new home construction permits rose by 17 percent in December which is a precursor to new home construction in 2011. Home values nationally in 2010 were slightly higher than they were in 2009, which suggests that the housing market price decline has bottomed.
Also, according to FreeRateUpdate.com, mortgage rates have remained steady across every category. Combined with great home price values, many parts of the country are seeing increased home buying activity.
And though it was largely symbolic, in the spirit of Valentine’s Day “warmth,” for the first time in history members of Congress from opposing parties sat together during the State of the Union address in January, applauding as President Barack Obama praised America for its greatness: “Remember, for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world.”
Of quantifiable importance—according to a national survey conducted by Harris Interactive and released in January by the National Association of Realtors—homeowners and renters agree that home ownership benefits individuals and families, strengthens our communities and is integral to our nation’s economy.
Here are some interesting numbers from the survey:
This last piece of data regarding young adults has to be one of the best Valentine’s Day gift messages. And the reason is simple math: the next generation of real estate consumers, at 74 million strong, is entering the prime home-buying years. Generation Y-ers (born between 1980 and 1995) rival the size and potentially the influence of Baby Boomers and, as Margaret Kelly, CEO of Re/Max, LLC, points out, are about to create a new wave of consumer clout, not to mention a chain reaction in real estate that could reshape the entire industry—for the better (consider giving someone 30 years or younger a nice Valentine’s Day card!)
While it is true that not everyone who wants to buy a home is financially ready, as National Association of Realtors president Ronald Phipps points out, home ownership for all is certainly more than just a slogan. Case in point: the Federal Reserve reports that the medium net worth of home-owning families is more than $200,000 compared with about $5,000 for families who rent.
Jeremy Allaire, chairman and CEO of Brightcove, an online video platform for websites, has a management style that seems to take a year-round Valentine’s Day approach. He recently told a New York Times reporter that besides wanting to hire people “with a really relentless work ethic and a pursuit of excellence,” he also wants “people who are nice, who are genuinely good people, who have humility”—an expression of generosity and kindness that I would argue could find a home just about anywhere.
So on this Valentine’s Day, after you have done something nice for someone you care for, take a moment to reflect on the positive message that there is—in spite of all our challenges—strong public support of and aspirations for owning a home. In the scheme of things, maybe not much of a romantic sentiment, but certainly one that is very good for our future economic well-being.
Until next month, I wish you good luck and fortune in “ALL THINGS REAL ESTATE.”