Volume 77 - Tidings of Comfort and Joy!

There's nothing that brings a smile to my face as quickly as Christmas lights. I'm giddy as a kid on Christmas morning (although my family celebrates Hannukah) as I drive the blocks taking in the bright strands of colors. I am especially thrilled when I discover new additions to the streetscape that light the night sky.

Even the tackiest of displays brings me great joy. You have to  admire the passion that goes into every gaudy plastic Santa or snowman. There's real pride in each of these holiday displays, be it Martha Stewart or Jed Clampet. Even the cemetery dresses up in full regalia (really - drive through it with your kids) and this year, we have snow in Tilden Park to add to the wonder. All of it is a reminder to me of the celebration of  the holidays and the overwhelming love of home.
 
In a year where turbulence has ruled the day, not a week goes by that a friend or a client doesn't worry out loud about the value of their home. You've approached me at soccer matches, football games and school events; at cocktail parties, fundraisers, and the grocery store, at the bank, the gym and the hairdresser's; while pumping gas, dancing salsa or walking the dog. Suddenly I've become very popular!
 
In short, almost every homeowner has some concern about the current value of their home and why wouldn't they? In a climate that seems to serve up disconcerting news almost daily, it follows that people would worry about a deepening recession.
 
Given that many of us have a tremendous amount of equity invested in our homes and that many more of us are counting on their significant appreciation to supplement our retirements, we ALL have legitimate cause for concern. Don't we?

Weren't we lead to believe that the ever-increasing equity of our homes would allow us to take our families on Safari, educate our children at Harvard and provide for our futures? (Yes, we were.)  

Which isn't to say that your home won't provide these admirable ambitions in the end, but here's the thing - the value of your home is only relevant when you go to sell it!  One more time because it's important - the value of your home is only relevant when you go to sell it! (It's like your weight is only important when you go to the beach!)  

Like many of you, I bought my current property near the top of the market and in retrospect, I wish I had paid less (who doesn't?).

Am I regretting my decision to buy? No.

Why Not?

Because I am planning on staying in my home for another ten years or so, which makes today's value essentially irrelevant. I'm not in the market!  

For those of you that are in the market, the value of real estate is relative.  You may be selling for less, but you are also buying for significantly less as well. This makes valuable sense (and cents) for those of you moving up and especially for those of you who are currently renting and don't have a property to sell in the current marketplace.   

Believe it or not, there are sound arguments for taking advantage of this buyer's market (and the lowest interest rates in four years)!  Even if you are losing on one end, you are more than likely gaining more on the other.  Increased appreciation over time on the "up leg" should more than offset the losses on your current property.   

Finally, the best advice I've heard is to stop thinking of your home as an investment . It's your home, first and foremost. As one smart friend (and savvy commercial real estate investor)  insightfully stated, "I don't think of my home as an investment, I think of it as a proposition. It's where my kids live. It's where we gather as a family." (Thank you Peter, I couldn't have said it better myself.)  

So save your anxiety for your stock portfolios (and for bathing-suit shopping).  Your home provides a unique "emotional value" that's hard to quantify and vastly different than the value of your stocks and bonds. 

But if  it's peace of mind you seek, may I remind you that "Main Street" has historically outperformed  "Wall Street" over and over again.  

So string up a few more lights and honor your home - leaky skylights and all.  You are one of the lucky ones. Tidings of comfort and joy!