Once upon a time – a time not so very long ago – there was a saying that “the only thing dumber than not owning a house is not owning two.”
That’s one of the memorable quotes from Keith O’Brien’s recent article in Boston Globe Magazine (issue of Nov. 1). O’Brien’s article aims to address the question posited in its title – namely, “Is buying a home around Boston worth it anymore?”
He spoke to a number of housing experts, including Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University; Karl Case, professor emeritus of economics at Wellesley College and cofounder of the Case/Schiller index; and The Warren Group’s own Cassidy Murphy.
He also spoke to a number of homeowners and prospective homeowners – the former, burned by the housing crash, understandably bitter about the loss in value of their largest investment, and the latter afraid that everything they’ve heard about the American dream of homeownership is a lie.
The consensus seems to be that homeownership is more of a gamble now than it ever has been in the past. The most cursory look at history tells us that home prices cannot rise indefinitely, even in Massachusetts, and that real estate is always a risk. But now the risks seem riskier and the prospects bleaker.
Yet it seems nothing can stop the juggernaut of the state’s housing market. This summer has been the best for housing since before the crash; July was the best single month in a decade for number of homes sold, and June’s median price of $365,000 came within $5,000 of 2005’s peak price. The market shows no sign of slowing: There were 5,430 single-family homes sold in September of this year, a 25 percent increase over the same month last year, according to data from The Warren Group, publisher of Banker & Tradesman.
Not yet 10 years removed from the nadir, Massachusetts’ housing market now inspires words like “torrid,” “red-hot” and “extremely competitive.” But those observations are of the markets in towns with little to lose and assessments of statewide statistics. The recovery is not evenly distributed and there are no easy answers for the cities and towns left behind.
Once upon a time, Bluestone points out in O’Brien’s article, people got rich on real estate speculation. That time has passed, he predicts; future generations will not see the kind of appreciation of home values their parents saw – if they can manage to get into the market at all.
All concerns taken into account, now is not the time to toll the death knell of homeownership. Purchasing a house is not exempt from the inherent risk that all investment carries. Prospective owners must educate themselves about what they are getting into, and the professionals who assist them in the process must be willing to do the same. It may be that the old adage is no longer true, but when the stars align, homeownership – as a dream and, yes, as an investment – is still worth it. For now.
