“There are no extra pieces in the universe. Everyone is here because he or she has a place to fill, and every piece must fit itself into the big jigsaw puzzle.” – Deepak Chopra: is an authority in the field of mind-body healing


There have been a growing number of reports announcing the death of American homeownership over the last two years. Some have said we are evolving into a rental society and even challenge the long standing belief that homeownership should be a part of the American Dream. They look at the falling rate of homeownership as proof of their point. Others say that the younger generations no longer see the value in owning over renting.

However, this past week, two news items might refute these points. First, DSNews reported the homeownership rate actually increased in the last quarter; the first quarterly increase in two years.

“After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report.”

Then, Fannie Mae released their 2011 3rd Quarter National Housing Survey. We will cover this report in more detail on Wednesday. But we do want to mention a few findings the report highlighted. Both Generation Y (birth date mid-1970s to mid 1990s) and Generation X (birth date mid 1960s to mid 1970s) have stronger beliefs in the importance of homeownership than those of the general population.

Here are the numbers for the three major reasons to buy (as per the survey) with the percentage who believe in each reason:

1. It is a good place to raise children and provide them with a good education:

  • Generation Y: 84%
  • Generation X: 81%
  • General Population: 80%

2. You have a physical structure where you and your family feel safe:

  • Generation Y: 77%
  • Generation X: 79%
  • General Population: 76%

It allows you to have more space for your family:

  • Generation Y: 76%
  • Generation X: 77%
  • General Population: 73%

Both generations also believe in homeownership as an investment. 70% of Generation Y and 66% of Generation X see homeownership as a safe investment while 64% of the general population believes so.

Bottom Line

This country’s belief in homeownership is anything but dead. The younger generations have the same if not a higher level of belief than earlier generations. As the economy improves, more people will make the move into a home of their own.


Brought to you by: Ken H. Johnson, Ph.D. – Florida International University (FIU) and Editor of the Journal of Housing Research. To view other research from FIU, visit

On October 31, CNN Money reported: “Home prices headed for triple dip”. Reporting on information provided by Fiserv (a financial analytics company), a 3.6% fall in prices on a national basis is expected by next summer. This will result in the Case-Shiller Home Price Index falling to 35% below its peak in 2006 and marking a triple dip in U.S. housing markets.[1]

Say it ain’t so! Is housing set for a third dip in five years? This depends on factors being in place to lessen the impact from market anxiety brought on by worries over a pending wave of foreclosures and the U.S. debt crisis, which we will start to hear more about shortly.

So, what are these factors and what do they tell us? These factors are really fundamental drivers that encourage individuals to buy versus rent their personal residences. They are sometimes referred to as housing affordability measures. The price to income, mortgage payment to income, and a buy versus rent analysis for various markets provide strong evidence that factors are in place to encourage home ownership or favor renting depending on the resulting measurements. In ongoing research being performed by Beracha and Johnson, these measures are at record levels in favor of buying.[2] In fact, the price to income ratios in 23 of the 50 states are at 30-year record lows. The payment to income ratios are at 30-year record low in all 50 states. A buy versus rent analysis performed in 23 of the nation’s largest metropolitan areas also indicates that hurdle rates (the rates at which potential buyers are indifferent between buying and renting) in all 23 cities are below 25-year average appreciation rates. All of these results strongly favor purchasing.

What about per capita income and present day prices (relative to past prices)? Presently, U.S. per capita income is on the rise again and has regained to the level of 2007 (roughly $40,000 per person), while prices of homes on the other hand rest at 2002 levels according to the Case-Shiller Home Price Index. What about mortgages rates? Presently, 30-year fixed rates are at near record low levels.

So, let’s put this all together. Housing is presently more affordable than at any time in the last 30 years. While income is only at 2007 levels, home prices are even lower coming in at 2002 levels. All of these factors set the stage for many individuals to favor purchasing over renting. Thus, while there are grave concerns over the overall health of the economy, fundamental drivers now appear in place to staunch any further significant plunges in home prices.

The ship appears to be turning.[3]



[1] See

[2] Beracha and Johnson (2011) on going research.

[3] This conclusion obviously assumes nothing unprecedented and catastrophic occurs such as the removal of the home interest deduction to combat the national debt or the often predicted foreclosure tsunami actually finally occurs.


In half of the states in the country, it’ll take more than eight years to clear out huge backlogs of foreclosures at the current pace, new research from LPS Applied Analytics shows. Where foreclosures must go through the courts, it likely will take even take longer too.

In New York and New Jersey alone, it may take more than 50 years at the states’ current sales pace to clear the pipeline of seriously delinquent or homes already in the foreclosure process, according to LPS Applied Analytics’ research.

“This is like having water backed up behind a dam. We hope it’ll be let out easy and not all at once,” Allan Dechert, president of the New Jersey Association of REALTORS®, told USA Today.

After questions to lenders’ foreclosure procedures last fall, lenders are doing more checks when processing foreclosures, which have slowed the process of repossessing homes and created larger backlogs in many cities, experts say.

States where courts aren’t usually involved in the foreclosure process are clearing out foreclosures at a much quicker pace–just under three years, according to LPS.

But some cities continue to face possibly decades of large foreclosure backlogs. The following are the states with the largest backlog of foreclosures, including the state’s “pipeline ratio,” which is the time it would take to clear the supply of seriously delinquent mortgages or homes in foreclosure at the current pace of sales.

  • New York: 57
  • Washington, D.C.: 57
  • New Jersey: 52
  • Maryland: 21
  • Connecticut: 20


Home owners who plan to stay in their home long enough should be prepared for other costs of home ownership, besides mortgage payments and property taxes. For example, the hot water heater and furnace may eventually need to be replaced, and by budgeting for it from the beginning, they’ll be able to pay for it when it does need replaced.

A recent article at The New York Times provided estimated costs of some of these extras that can come with home ownership (average costs listed are based on service providers in Chicago and Los Angeles areas; prices can fluctuate greatly from city to city).

Central air: Home owners should expect the main central air unit will need to be replaced every 12 years, but possibly even sooner for warmer climates. A replacement will cost around $3,000, but a lot more for a higher efficiency model. Home owners can start saving $21 per month over 12 years to afford it, The New York Times article notes. Tip: Have a yearly maintenance check of the system to extend the unit’s lifespan (expect to pay about $163 year for a maintenance check).

Furnace: A furnace will last, on average, about 18 years before it will need to be replaced. Replacements will cost around $3,800, so home owners should start saving $18 per month for the future expense.

Hot water heater: These can last about 12 years before needing replaced, which starting costs for a replacement will run around $1,200 (or $8 per month to your budget). Tankless water heaters can last a lot longer, possibly even up to 20 years as well as help lower energy costs, but they cost about $4,000 each, according to The New York Times article.

Driveway:  Some experts recommend sealing an asphalt driveway every three years, which will cost about $550 or about $15 per month. Plan on replacing an asphalt driveway every 15 years, which will cost about $6,000 or $33 per month.

Trees: You likely will need a few trees trimmed every five years or so on your property, costing about $300 per tree. Home owners may want to budget $20 per month for this future expense.

Roof: Roofs, on average, need replaced every 25 years or so, but it’ll greatly depend on weather elements. New roofs may cost about $7,500 for an average-size home so home owners might want to start saving $25 per month to their budget.


If people want to get a hold of you and they don’t know you – they’re not going to call.

Again – they are NOT going to call you.

Blame it on the fact that maybe they’re a Gen X-er. But they hate calling people out of the blue. They’d rather poke myself in the eye!

They may tweet you, unless the last time your tweeted was in 2009.

They may or may not leave a message on your Facebook page.

If they want to reach you, and they’ve never met you – they want to send you a quick email.

They don’t want to fill out a form.


Sending someone a contact request on a form is like sending something into a black hole.

Who knows where the form goes to and who knows how long it could take before someone gets back to me.

Also, it is a bit off-putting that you wouldn’t put your email address out there – yet you are asking me for my name, phone number, email, etc.

I am willing to bet that if real estate agents stopped hiding their email address that they would start getting more leads off of their site.

In this age of transparency where people can find you just about anywhere at anytime, why in the world would you hide your email?

Two Big Takeaways

  1. Your email should be on every page of your website.
  2. You are losing business by not displaying your email.

Does most of your business come from people you know?

95% of agents I talk to say “yes.”

Even MORE reason to not hide your email. If your past clients want to reach you quickly or refer a friend, then there is even more reason to prominently display your email on your site.

Can You Have Both?

Can you have a lead generation form and display your email address? Yes, absolutely. In fact, you can have a number of them throughout your site.

Now is the time to be creative.

Promote a drawing for a gift card or a dinner out.

Give away a free market report.

Enter to win a drawing for a free home inspection.

Get creative, but also stop hiding your email.

One More Secret

Keep it simple. If you are going to have a form keep it to five fields or less. Don’t make it complicated and don’t ask for more than people are willing to give. Give them a reason to give you their info on a contact form.

So please, if you have a site you can edit yourself like a WordPress site – add in your email – make it blatantly obvious. If you don’T have a site you can edit, call (or email) your Webmaster and ask him/her to add your email to the upper right hand corner of your site!

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