For most people, buying a house is one of the major milestones they need to achieve in their lives. It has almost become a marker by which an individual might asses how successful they have been through their career. It is obviously a financial benchmark but more importantly, people look at buying a house as a matter of pride. It gives them immense emotional satisfaction.
Apart from a few anomalies like Japan, A house is one of the most important investments one can make. Inevitably, over a long enough span of time, history has shown that the value of real estate only goes up. It is a a relatively safe place to park a large chunk of wealth, with the risk reward trade off working heavily in its favor. However for the people that matter, a home tends to be so much more. Sometimes second and third homes are viewed as investments but often the house bought to live in feel close, like a member of the family.
The emotional attachment associated, often outweighs the financial benefits. The home becomes about the people living in it. Sometimes it becomes a symbol of financial independence and stability. Sometimes it becomes the first step in starting a new family. When children are born, the home they grow up in becomes as much a part of their lives as anything else. The memories, associations and little stories that become a part of life, cannot possibly be valued in financial terms.
We live in times where owning your first house is becoming more difficult. An entire generation is struggling with it. The factors responsible are varied. They may be economic conditions, decline in average income, change in social or behavioral patterns or just the way money is spent. None of this however, has in any way undermined the aspiration of owning a house. A home that is not dependent on the terms of a rental agreement is still a dream worth chasing.
For those fortunate enough to find themselves in a situation where they can afford to buy their dream property the challenge is far from over. Merely finding real estate for sale is not enough to find that dream home. There are a lot of other factors that go into it. That struggle has always existed, often you don’t get too many chances to make mistakes with a purchase like this.
In spite of the challenges faced, the trend seems to reflect that this generation is not shying away from buying homes. What seems to have changed though is that the older values that were an essential part of what a home represents, seem to have shifted. There is a sense of practicality that has begun to undermine the purely emotional decision making that once governed such purchases.
The emergence of changing trends at the workplace probably have a big part to play. These trends allow people to look at real estate more objectively, given the tedious daily commute is no longer a top of mind factor. There is a greater emphasis on the quality of life. Different people might see it differently. Some might prefer a more quiet lifestyle close to nature while others might prefer a location close to food and nightlife that appeals to them. Some people might value proximity to family and friends while some might prefer the availability of schooling and other infrastructure. What we are seeing is that real estate is developing quickly in areas that seemed unlikely just a decade or so ago. The underlying trends that define what makes property attractive are beginning to shift.
Real estate, as an industry might have seen a few bumps in the road along the way but in the big picture, it has been amongst the most consistently valued assets possible. Outside of gold, there might be very few assets that people have valued over history as much as a home. People will always crave a place to call their own.
There has often been speculation about overvalued real estate and the need to own a home in todays rental economy. What is important to look at is the timeframe these trends incapsulate. Overvaluation will get corrected over a long enough time frame. A rental economy, still brings most value to the providers renting out assets. Very rarely will a physical asset loose value completely.
In the modern day and age, housing has been separated from real estate slightly. It is important to note that the highly priced apartment buildings in large cities do not come with the land that they are built on. Their value comes merely from the location and proximity to city centers. In todays economy though, it is just the way things are.
Buying a home should not be a cause for stress and concern. Once you are ready to commit, it is like any other decision that will play a big part in your life. As long as it is made considering all the possible facts, it will generally work out well. What is important to realize is that there are no right and wrong solutions. What is important is to find what is right for you.
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