Solano Real Estate Scene: American Dream represents true value
I have read a few articles recently about the American Dream dying in our country and homeownership dropping to a 40- or 50-year low. I would like to explain what I think the American Dream is and why it is important.
The reason buying a home is so important is not because the value will increase over the next 30 years. The reason buying a home is so important is so that when you are 60 or 70 you will have a housing cost you can afford.
I mean think about it. If you buy a home today for $400,000 and it doubles in value and you pay it off in 30 years, you will have $800,000 in equity and a housing cost of only taxes and insurance and maintenance (maybe $1,000 per month by then).
If you rent a house today for $2,000 per month and rent for 30 years, your rent will be $5,000 per month and you will have no real estate equity when you are 60 or 70.
It is really as simple as that.
The $800,000 in equity gives you options but does not cash in as an investment because if you sell, the only way you will see the profit is if you sell in California and move to a cheaper state or you move down in size and price here.
I would rather have $800,000 tied up in equity than nothing.
The American Dream will never die because most people want to own their home and not be controlled by a landlord.