Nica's Blog

The housing market sucks. Lots of people are now regretting purchasing the home they have. Some of the blame has to be put on the homebuyers themselves, and many are feeling the punishment of their financial errors. Lenders have participated in many shaninigans as well. Some lenders are going to end up hurt by their over-zealous lending, others will make some profit from it. However the people who are mostly to blame will get no punishment, no public disgrace. I am referring to the people who have told every friend and family member not invested in real estate that they must purchase themselves a home because there is no better thing for them to do with their money. How many have been goaded into purchasing homes despite their shaky financial situation by relatives, coworkers, and friends talking endlessly about how real estate is a wonderous and magical money making machine.

Three years years ago I remember talking with an aquaintance, who I will call "L". Our conversation went something like this.

L: Do you own a home?
Me: No.
L: It's a wonderful investment.
Me: I only make $13/hr.
L: But you're wasting money on rent.
Me: I have no business taking out large loans.
L: But having real estate allows you to write off your loan when you pay your taxes.
Me: I can't afford a house.
L: You might be able to get something...maybe in Kent.
Me: So I can have a long commute, lousy neighborhood [no offense to you Kentians] and all the expenses of having a home.
L: But you're wasting money on rent. That's money down the drain.
Me: That's money that pays for shelter, maintenance, property taxes, water, sewer, garbage...
L: But you're not building equity.
Me: How do you know that? People can build equity lots of ways, not just with real estate.
L: Why are you so resistant to owning a home? You must have some sort of phobia about it.

Fortunately I didn't really like L very much and telling her that I was finding her tiresome was easy for me to do. Others have been less lucky and have been overwelmed by parents, coworkers, meddling in-laws, all urging investing in a home. Of couse none of these ignorant investment advisors feel that they are to blame now.

Remember, unless you really know what you are talking about, don't give advice. Keep your mouth shut or you might really hurt someone. Financial advice is not small-talk.