The Psychology of the Home Post-Recession

“After any major fallout like a financial downturn, it’s natural to examine and sometimes alter the way we think about fundamental issues in our lives,” said Dr. Robi Ludwig “So it makes sense that this survey shows we are re-thinking what passed for conventional wisdom during the ‘boom years’. Instead of taking things for granted, people are protective of their jobs, homes and futures,” she explained. “And now that we’re picking up the pieces, we’re seeing a psychological shift. Instead of looking at homes through the eyes of an economist, we’re realizing that a home doesn’t solely equate to financial return or measure only to a mortgage amount. Instead the home is the emotional center of our lives, and it remains a critical component of who we are.”

• A majority of U.S. adults (79 percent) indicate the recession has caused society to rethink the concept of homeownership.
• In fact, 84 percent of U.S. adults agree more people took owning a home for granted before the recession, and nearly three-quarters (72 percent) said they feel like Americans have a greater respect for it now than they did before the recession.
• Seventy-five (75) percent of U.S. adults agree that due to changes in the housing market and/or economy there has been an overemphasis on the financial value of a home rather than the emotional value of a home.

How the Recession Has Caused Americans to Re-examine the Value of Their Home

“There’s no doubt that housing has been in the eye of the economic storm,” said Jim Gillespie, chief executive officer, Coldwell Banker Real Estate LLC. “However, our work with Dr. Ludwig underscores that Americans remain bullish on homeownership and have not forgotten the inherent, emotional reasons that make our homes precious to us – in tough times or not. People are simply and rightly being more mindful about what they need and what they can afford, and are more carefully considering when to become homeowners.”

The survey strongly indicates that people are re-evaluating their needs vs. wants when purchasing a home. Ninety (90) percent of U.S. adults agree that some people purchased more expensive homes than they should have before the recession. Meanwhile, 86 percent of Americans agreed that people are more closely evaluating how much home they can truly afford now, compared to before the recession.

Home Renting vs. Buying a Home: It’s Far More than a Financial Decision

“Renting offers many people a suitable temporary solution, but in the long run, owning a home appeals to our innate desire for having things we can call our own, while providing a connection to the community around us,” said Dr. Ludwig. “Homeownership is a commitment; it’s about being rooted, which is one of our human instincts. I was encouraged to see that so many respondents recognize that commitment to a home, just like in a relationship, can often bring immense satisfaction.”

The survey found homeownership is part of the American Dream and that the United States becoming a “rent-based” society does not appear plausible:

• Ninety-one (91) percent of Americans agreed that owning a home is part of the American Dream (93 percent of homeowners, and 89 percent of renters).
• Eighty-three (83) percent of renters said that they want to own a home someday.
• Despite the economic challenges so many have faced, 94 percent of homeowners agreed that they are glad they own a home.

Why Homeownership is a Pillar of Success for So Many Americans

“Homeownership provides a stable environment that is not dictated by the whims and rules of a landlord,” Dr. Ludwig said. “We and our children flourish in secure environments. The feeling you get when you step through your front door or pull into your driveway is indescribable and priceless and the same holds true for our children who crave stability. While I know that financial hardships during the recession clearly have impacted many households, it is clear that the emotional value of a home is still strongly recognized.”

The survey found a high percentage (95) of parents / legal guardians agreed that it is important for their children to own a home someday; and 74 percent feel it’s absolutely essential / very important.

Additionally, more than three-quarters of homeowners (78 percent) said that owning a home is one of their greatest achievements, and 85 percent of U.S. adults (which includes both homeowners and renters) agreed that they always dreamed of owning a home.

How Our Homes Play a Role in Our Personal Identity

“People universally understand what it feels like to ‘be at home,’ and homeownership is an intrinsic element in our society”, said Dr. Ludwig. “The ability to alter colors, make minor cosmetic alterations and structural changes are so important to showcasing our personalities. And one of the reasons people feel so strongly connected to the home is because it is in many ways a reflection of who they are.”

Seventy-one (71) percent of U.S. adults agree that their home is a reflection of their identity, with homeowners being significantly more likely to agree with this statement than renters (74 percent, compared to 67 percent of renters).

A video of Dr. Robi Ludwig discussing this topic more in-depth can be found at http://youtu.be/c9wwQuJY4mg. For more information please visit ColdwellBanker.com.

Equally as interesting, Shea and his brothers and cousin, five boys in all, won the 1923 International Speed Skating Championships, and appeared in Ripley’s Believe It or Not.

Source: Coldwell Banker Residential Real Estate Florida

So, how can you conduct an MRI on your housing market? Here’s what Kendall recommended at the REAL Trends’ Gathering of Eagles in Dallas:

1. Go to: http://fhfa.focus1st.com and click on the market you choose (over 380 markets are represented) That gives you the home appreciation index.

2. Go to http://www.pmi-us.com, which offers an economic model that predicts home prices in 381 markets. Find your market.

3. Make a chart that gives you 1 year appreciation; Latest Quarter appreciation and latest quarter X4 (annualized appreciation.) Is your market continuing on a downward slope or is it starting to appreciate?

Other sites for data: http://www.housingpredictor.com and www.caseshiller.fiserv.com/.

This is a great tool for investors to determine if now is the time to invest in a specific market.

I recently attended the 25th Anniversary of the Gathering of Eagles, a two-day conference for the executive leaders of the country’s most successful residential real estate brokers, owners and managers. This was my fourth visit and I am incredibly grateful to the host/organizer Steve Murray, his outstanding team at REAL Trends and all the presenters for the opportunity to learn from this enlightened group of entrepreneurs.

The conference carried an inspiring sports theme with a featured presentation by Paul DePodesta, currently VP of Player Development and scouting for the New York Mets. In Michael Lewis’ movie Moneyball, Jonah Hill plays DePodesta, who, at the time, was Assistant General Manager of the Oakland A’s.

You may not be a sports fan but stay with me, as I point out one of many parallels to be gleaned from the world of sports and your business as a real estate professional. For those of you who did not see the movie (please rent it), Depodesta and Billy Beane (General Manager for the Oakland Athletics, played by Brad Pitt) came to the Oakland A’s after a six-season losing streak with the lowest player payroll in Major League Baseball. Conventional league thinking was that wealthy teams who spent three times as much on talent as less wealthy teams win games and ultimately the World Series. After four seasons of DePodesta and Beane as managers, the Oakland A’s won more regular season games than the heralded New York Yankees who, during the same time, spent $350 million more on payroll than the A’s.

Read the Full Story: What Moneyball Teaches Us About Real Estate «.

And with mortgage rates low, many house hunters have already started to pounce on bargains, said David Stiff, chief economist at Fiserv, a financial analytics company that prepared the forecast.

“Some markets may have overshot to the downside, and people are jumping in to try to catch the bottom,” Stiff said.

Read More: 10 housing markets set for double-digit price gains – May. 9, 2012.

The increase in seasonally adjusted prices in February was the first rise since March 2010, and only the third rise in seasonally adjusted prices in five years.

However, the Jacksonville, Fla.-based firm remains guarded about the future of the housing market.

Read More: LPS: Home prices in February edge upward | HousingWire.

As smartphones and tablets continue to be employed for every conceivable service, mobile customers are demanding fast and reliable ways to access real estate information.

According to The Real Estate Book, “Our research shows that nearly all homebuyers who used a mobile device in their search process consider it a valuable tool. Homebuyers are becoming more fast-paced, and require technology that can keep up with them,” says Scott Dixon, president of NCI’s Real Estate Division, who offers the following tips for harnessing mobile shoppers:

Fill in the Blanks. A majority (68%) of mobile shoppers shared details such as prices, locations, amenities, and photos of potential homes. The best way to capitalize on this trend is to be complete when filling out profiles, and optimize on a homebuyer’s want for information.

Keep it Simple. The peak traffic for mobile searches occurs from Friday to Sunday, when people are on the go. Knowing that, it follows that a mobile platform must be kept simple and easy to use, something that can provide a shopper with information they need in an instant.

Connect the Dots. By linking all types of publication, traffic can be driven back and forth between a website, a mobile platform, and a print publication.

Spread the News. Shoppers are sharing, now more than ever. Seventy-eight percent of mobile shoppers shared photos or videos of potential homes, which indicates the desire to pass along important information, and the demand to create a flexible and straightforward way to allow users to share details and photos through email and social media.

Track Your Progress. None of this technology is beneficial if it doesn’t generate leads and more business for the advertiser. After optimizing your mobile platform, watch for differences in trends among shoppers and homebuyers – hopefully numbers will be increasing!

The top turnaround towns include the Phoenix-Mesa area in Arizona, as well as Miami and the Orlando, Fla. markets.

In Phoenix-Mesa, the year-over-year home price appreciation grew 26.94%, while inventory levels declined 48.04%.

Read More: Foreclosure hotspots show signs of housing turnaround | HousingWire.

The case is a landmark in Florida since many financial firms rely on the dismissal-refile option to fix issues stemming from foreclosure complaints.

The case that sparked this legal question — Roman Pino v. The Bank of New York Mellon ($22.47 -0.405%) — will be heard by Florida’s highest court on Thursday.

Read More: Florida Supreme Court to hear landmark foreclosure case | HousingWire.