4 April 2008 4 Comments Print This Post  Email This Post

This time last year, the quickest way to building up some equity, and therefor wealth, was to buy a house. Plenty of people reached for houses not truly in their price range, figuring that even with a tough mortgage, they could turn around and sell the house later on to make a profit.

While the real estate market hasn’t gone entirely soft in all parts of the country, the home ownership approach to building wealth is a little less certain than it was even a year ago. More than a few people have lost their homes and even more are in a tight monetary spot trying to pay off an exorbitant mortgage.

To a certain extent, people are turning away from home ownership at the moment: while there are a few people out there snapping up what they see as deals, many are biding their time in an apartment, investigating RV options or even moving back in with Mom and Dad. I think, sooner or later, people will go back to building wealth through home ownership, but I think the concept of the value of owning real estate has become a little tarnished. There are plenty of people these days that are more than content to choose alternate homes:

• I have a friend who refused to buy a stand-alone house and has instead purchased a condo where he firmly intends to spend the rest of his life.
• While it used to be mostly empty-nesters who lived full-time in their RVs, I know a family, complete with two small children, who live on the road.
• Several of my mother’s female friends who are single have moved into a house together. These women can all more than afford to live on their own, but they don’t feel the need to own separate dwellings.

Even if the housing market gets itself back on an even keel, I know that none of these people are going to go back to a standard one-family per building living situation. There are still plenty of people who like that sort of arrangement of course, including me. We’re not facing a sudden lack of people wanting to buy houses. But I do think that the mindset that a person absolutely has to buy a house to have any sort of respectable personal wealth may be starting to shift. It won’t stop me from my plans to buy a house, but I may have to take such a shift into consideration if I’m looking at a house I plan to sell later on.