Owning a Home: Is It Worth It?

With the current mortgage “crisis”, along with existing legislation about what people can and can’t do with their property, is it all worth the overinflated prices?

If you had asked the question, “Is owning a home worth it,” twenty to thirty years ago, the answer would have been a resounding yes. Owning a home has been a part of the American dream for centuries.

Unfortunately, the answer you’d get now days would more than likely be far different. If you got an answer at all, besides a doubtful shrug, it would probably be something like, “The monthly payments would be higher than my rent, and then I’d have to pay for the repairs too.”

For many, especially in the middle classes, owning a home is a pipe-dream left to someone else. Even households where two adults work full time can’t quite come up with a valid reason to jump into the real estate market. Rising utility costs, gas prices, car payments, and food prices have left those considered well off twenty years ago in a basement of debt.

Add to that a decade of artificially inflated real estate prices, deficit spending to the tune of trillions, faulty legislation, and bad business decisions and what do you have? You have an overpriced home which you paid way too much for, and an economy which is finally trying to correct itself.

Owners and mortgage lenders alike aren’t selling. The problem is that no one who owns a piece of property wants to sell at the current market rate. They’re holding out until the government comes to the rescue or until someone pays what the property was worth a year ago.  

Consider a three bedroom house that’s rented out at prices six months ago. In high cost of living areas that house, no matter the condition, could cost as much as 2500 a month without utilities. The cushion of renting is that if the plumbing suddenly erupts, the owner has to fix it. Now consider a 0% down, sub-prime mortgage, three bedroom house in a high cost of living area. On the low end the house would cost 260,000 depending on the neighborhood. Under the best of circumstances the monthly payment, taxes, home-owners insurance, interest, and utilities would be over 2500 after the 0% to 4% period. If the refrigerator, plumbing, or heating goes out you’re left paying the bill. That’s if you even have the cash to pay for it.

If you find you can overcome the obstacles above, think about the other aspects of home ownership? Do you ever really own your home? A 1.58 overdue tax bill can send your home to the auction block without you ever knowing about it if the property is a vacation home or a house you’re fixing up and don’t actually live in.

County and state utility companies can enter your property at any time of their choosing and do major work. Add to that the fact that county and state governments can pass legislation about what can and can’t be on your property, and you’re better off living in the woods somewhere.

In this writer’s opinion, the current state of real estate in America is a dim one. Basically, you lease property from the government

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  1. Interesting article. It’ll be interesting to see how things look on this issue a year or two down the road.

  2. Barry, you should see what happened to the housing situation before and after Hurricane Katrina hit us… Then again after Ike… Apartments that rented for $350 a month are now $1500 a month. It’s ridiculous.

    I’m SO glad that I actually bought my house back in 1991 to avoid all that crap. Granted, if something breaks, I have to pay to fix it.

    But unlike a Renting situation;

    1) I can’t just be evicted for no reason, it would take them 6 months to a year to process an eviction on a home ownership in Louisiana,

    2) They can’t just evict me from my house for an $1.58 overdue tax bill unless I outright refuse to pay it, and even then they have to make arrangements for payments, and it’s not all due at once. Remember, we have Parishes, NOT counties, so our laws are quite different and unlike other states, Louisiana laws does sometime protects it’s residents.

    Plus, if and/or when I decide to move, I can rent it out for a helluva lot more than I paid for it.

    Also, luckily in Louisiana, the Utilities Companies have to have your permission to enter your property and they cannot just enter your property without the fear of being shot, as it has happened before. Here in New Orleans, they have to arrange appointments with you beforehand, then present their ID to be able to prove who they are, and the local companies insist that you call to verify said employee BEFORE you let them in/onto your property.

    Sometimes living in NOLA isn’t such a bad thing, that is, if you don’t mind the crime, racism (on ALL ends), growth of the ghetto/gangsta culture and the ongoing political corruption…

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