Home owners are becoming more realistic about the current marketplace.
So where does this lead us?

August 18, 2010 – Zillow.com reports that home owner confidence about the value of their home has declined in the second quarter.
“Home owners have become much more responsive to current market conditions than they were just two years ago, when a more typical reaction was denial.” ..—Stan Humphries, chief economist at Zillow.com
Even with this new realism, over 72% of adult Americans still see owning a home as part of their future and their personal American dream according to a survey for Trulia.com.

Currently, 68% of renters who plan to purchase a home said it would be more than two years before they do. What would encourage them to buy now? These six factors were cited:
- Able to save a down payment (47 percent)
- Land a new job (28 percent)
- Interest rates stay low or fall lower (27 percent)
- Some other factor that persuades them that buying makes financial sense (24 percent)
- Get a raise (23 percent)
- Local real estate market stabilizes (9 percent)
One might have thought that market stabilization was more of an issue given all the foreclosures, short sales and declining values and yet it shows up at the bottom of this list of factors. A full 47% surveyed need to save for the down payment. Think about this—almost half of those surveyed.
If you’re a first-time buyer looking at a $200,000 home and you want or need to put 20% down, this amounts to $40,000. A buyer will also need funds for closing costs unless the seller is willing to pay these. The good news is that there is down payment and closing cost assistance for buyers.
Also on the good news front is that interest rates are at a forty-year low. Here is a sample of rates for today according to one site I’m checking:
30-year fixed conforming: 4.25%
15-year fixed conforming: 3.75%
30-year fixed FHA: 4.25%
30-year fixed VA: 4.25%
30-year fixed Jumbo: 5.25%
7-year Jumbo ARM: 3.75%
People who are currently in their seventies and older bought their homes, first and foremost, as a place to live and raise their families.

Appreciation was not the principal reason for buying. It’s very likely that home values will not rise significantly in the short term.
“Our forecast remains largely unchanged: We’re in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years.” —Stan Humphries, chief economist at Zillow.com
There are certainly situations where money can be made in real estate. If you have patience and TEAM (my term for Time, Energy And Money, as well as a good team of people: Realtor, lender, closer, etc.), foreclosures and short sales represent a potential opportunity to make money. Easy money? It all depends on your definition of easy.
Back to the average homeowner, the one who is primarily looking for a place to live. What else does a homeowner get when they buy a home besides a place to live? They get greater freedom. They can make changes when and how they like. Paint the walls any color. Update the kitchen and baths to your taste. Plant a garden in the yard. Add a porch or deck. Change the carpeting. Add wood floors.
Maybe, just maybe, the idea of home ownership as the American dream is really about a larger dream: The dream of freedom and independence. We all appreciate freedom and independence. Maybe would-be and future home owners are seeking this type of appreciation. Who can put a price tag on that?
Home, the spot of earth supremely blest, A dearer, sweeter spot than all the rest. —Robert Montgomery
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Need help with your American dream of home and freedom?
Call or write me.
Kate Walsh, Realtor
Lakes Area Realty
612.220.3309
info@designhouse9.com
Twitter: designhouse9
