Homeowner No More

I am looking out the window from my rented townhome onto the quiet, orderly,
artificially quaint neighborhood that became my new home less than a year ago.
It is today that I will put pen to paper and renew my lease for another year.  

Am I here because I was caught in the tidal wave of poor underwriting of loans
on overpriced houses?  Did the time bomb of re-setting rates catch me unaware?
Did my eyes lead me to purchase more home than I could afford?  Was I too eager
to shout to the rest of the world that I had 'made it' as America defines it?
None of the above. 

I have always been a part of the minority that was borderline uncomfortable
with a mortgage.  It always felt a little to me like a lease that had no end,
where you had to repair the roof even though your 'stake' in the home might
take you only to the top of the front porch steps, everything else pretty much
belonging to the bank.  And my take on 'It's a Wonderful Life?'  George was
darn lucky to have friends to bail him out after his dream of home-ownership in
small town America began to crumble.  Another reinforcer to my views on home
ownership came from my mother who, after the death of my father, sold our
family home.  It had been held under a V.A.  financed mortgage. And although it
was a great benefit to our big family, after selling our modest home in small
town America it was clear our money had been for shelter, not investment.  

I have been a homeowner in the more recent past, or more accurately, a mortgage
holder.  I married into a mortgage, and went through the process of buying and
selling a handful of times through the course of our married life.  Once the
dust had settled around the remains of that chapter in my life, the question of
purchasing a new home'  solo'  was on the forefront of my mind.  And to be
clear, although we had benefited from rising home prices somewhat, our equity
stake had always been at the 20 percent mark or higher on a 30 year fixed rate
mortgage.  Yes, it was your 'grandpa's mortgage'. And much of what we took out
of each sale was really the equity stake we had built from each mortgage
payment.  

And at this point in the story, I have to say that in many people's minds it
will appear that I was the lucky one for when I put my three-bedroom ranch with
an unfinished basement on the market in May of 2007, the market was just
beginning to cool.  The idea of sitting through many months of showings seemed
unthinkable, so at the outset I priced our home slightly below the previous
years' property tax appraisal, and over $12,000 below the peak 2006 price.
After less than two months on the market, an offer was made $8,000 below asking
price, I accepted, case closed.  I still walked out with a check of over
$50,000.  There may have been some luck involved, but pricing to current market
conditions, and then dipping just a little bit lower, seems more like smart
strategy than luck.

In the midst of this selling experience, I looked up a real estate agent who
also happened to be an old friend of ours to begin the process of finding my
next home.  At that point in time, renting just wasn't on my radar.  After
looking at a variety of what now appear to be grossly overpriced, in many cases
run down, homes in my price range, my agent said something to me that changed
my whole course of action.  He said, 'If you were my niece, I would advise you
to rent for now.'  

And here I am in 2008.  A proud renter.  The equity from my home now folded
back into my investment portfolio, such as it is.  Will I sign the lease or
scramble for a home whose price surely now has 'reached the bottom' as many a
real estate professional has assured me this year?  That would be 'no'. And in
closing, I will put my twist on Warren Buffet's remarks on the effects of the
bursting of this real estate bubble; When the tide goes out, I will not be
found swimming naked!

If at the end of this cycle, painful as the adjustment might be, we are viewing
housing as shelter and not investment, I firmly believe that I will not be the
only one choosing to be a homeowner no more.  

Dianne Auger
dianneauger@comcast.net
May 2, 2008