Are We Becoming a Nation of Renters?

Wed, Nov 20, 2013

Bankruptcy, General Legal Issues

Some rights reserved by HerryLawfordHouse sales are up, sales are down, it’s a buyer’s market, prices are rising, the market’s good, the market’s bad, it’s turning a corner, and so on and so on.  We’ve heard it al in the last few years. The housing market has been on a suspenseful ride for so long, who knows where it will end up.

Current predictions say that Florida is “housing market to watch in 2014.” (This one is from the Sun-Sentinel.) The Chicago-Tribune also feels that Florida’s housing market is hot, from a lot of research. So, perhaps Florida’s housing market is rebounding.

But, what about the many homeowners who have lost their house. What are they doing? Renting. What about the ones who can’t meet the stricter loan requirements doing? Renting. What about those who lost their job or had another financial crisis doing? Renting.

So who is going to buy these houses for the market to rebound?

  • The people generally unaffected by new rules or financial considerations.
  • Those who were waiting for the economy to show signs of mending.
  • Those whose circumstances turn around or who are less fearful of risk.

Those looking for bargains already bought—they found that great deal and pounced on it. So, they aren’t even being considered in this rebound equation—because they aren’t going to buy in a market where prices are rising.

The fact is that renting might become the new norm. Many are speculating upon this idea and wondering if the American dream is changing. Leasing a vehicle has become very popular. It allows you to upgrade often, and always have something new. The initial outlay is small and the payments often better. Then there is your smartphone—you are used to getting a new ones of those every 2 years or more. So, why would American not consider renting as an alternative to buying for this reason?

First off, buying a home has many benefits that everyone can recognize. It offers an investment, stability for a family, a more sure thing, etc. It also offers more outlay of cash, makes it harder to move around, and perhaps even lets the homeowner get bored (since our attention spans are supposedly dwindling). Those looking to live a jet set lifestyle, or just having to move to survive don’t want to be held down by a house.

So, if you can find a good landlord and a good rental deal—it might seem more appealing these days. But, you really should research which is better for you. Perhaps it is worth it to check with a lender and realtor to see what you could buy. Or start with a financial planner to help you decide if you can really afford to buy. There are many online resources that can help you decide what you should do. This interactive graphic from the New York Times offers estimates of costs and a sliding scale that shows the advantages or disadvantages. This is only one of many online calculators to help.

This Marketplace.org post (and audio) offers information about how renting affects our economy. While it is not something aimed at helping anyone personally decide if they should rent or buy, it is helpful in showing us how this type of decision affects our economy. And if everyone continues to make this type of decision, it could mean a big difference. And of course, the housing market heavily influences our economy anyway.

Attorney Christopher D. Smith is a Lakewood Ranch, Florida attorney with SmithLaw Attorneys. He concentrates in bankruptcy, civil litigation, probate, and elder exploitation cases in the Sarasota and Bradenton area. Call 941-907-4774 to learn more and to ask about our free consultations.

Image: Some rights reserved by HerryLawford

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