Home as investment? That's so 2005

New Coldwell Banker commercials emphasize the intangible value of homes. The ads are voiced by actor Tom Selleck, whose father and siblings were in real estate.

By Teresa at MSN Real Estate Mar 8, 2012 2:21PM

A young Tom Selleck with his father, Bob. © Coldwell Banker Real EstateThe housing crisis has taught all of us a hard lesson: A home is not an investment. A home is a place to live.

 

Coldwell Banker Real Estate just launched a new advertising campaign with that hook, using the voice of actor Tom Selleck, whose father worked 38 years for the real-estate company.

 

"People’s homes are so important because they are the setting for life’s most meaningful moments," Michael Fischer, chief marketing officer for Coldwell Banker, said in a news release. "While the economics of homebuying are critical, we must remember there is much more to it: lifestyle, memories, family and pride of ownership."

 

It's certainly a lot more cheerful to add up the good times you've had in your house than it is to subtract how much monetary value it has lost. Expecting one's home to rise substantially in value has not always been part of the American dream of homeownership, and the current housing crisis has been a painful reminder of that.

A total of 22.8% of U.S. mortgages are underwater, according to the latest CoreLogic data. Home values are back to 2002 levels nationally and lower than that in some cities, and prices are likely to fall further in some areas.

 

That doesn't mean that homeowners aren't finding intangible values in their homes, which is the sentiment that Coldwell Banker is trying to tap.

Whether you consider your home an investment depends as much on you as it does on the home and its value, writes Trent Hamm at The Simple Dollar. If you're planning to move soon, the price matters a lot more to you than it does if you’re planning to stay forever.

 

This is how one of the Coldwell Banker commercials (in Tom Selleck's voice) calculates home value:

"You start by taking the smell of pancakes made on a Sunday morning and times that by the sound of kids laughing from the bottom of their bellies. Then you add the taste of a good cabernet with family at Thanksgiving and multiply that by the warmth of a winter fire. Then you subtract the stress of work and minus the struggles of the outside world, add the power of a bedtime story and times that by the square root of a grandmother kissing her grandchild. Multiply all this by about 50,000 memories and 100,000 smiles. And then you have a value of a home."

Other short commercials start out, "Here's to kids – and all the things that make a house a home," with pets and backyards also being toasted. Inman News has videos of the commercials.

 

Selleck's father retired as an executive vice president at Coldwell Banker, and his sister and two brothers also worked in real estate. As he struggled to make it as an actor, his father more than once suggested he get a real-estate license. From quotes by Selleck provided by Coldwell Banker: "It was indeed a proud moment when I was able to tell my mom that I was, at last, in the family business."

What do you think? Has Americans' view of homeownership shifted enough from investment to lifestyle to respond to these commercials?

 
20Comments
Jul 22, 2012 6:36AM
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Valerie,  WoW, Incredibly gorgeous pic. Beautiful.
Apr 11, 2012 1:43AM
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I have alway maintained a house was a home not an investment. My kids would not listen and  did not move sideways but up, right when the market was falling. Now they are under water and will be for a very long time and they will never recoup  the money they  have lost.
Mar 20, 2012 12:44PM
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Sorry shafer1217 every time I change my picture on my social media sites for some reason hot mail picks it up and uses it. Didn’t mean for it to be a distraction

Mar 20, 2012 11:28AM
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I always get distracted whenever Valerie posts. And for the most obvious reasons. Mind the gap and Clive ON.
Mar 20, 2012 11:23AM
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Housing is no longer an "investment" IF it is defined as an asset that will return more than invested. Housing will not do that in my life-time (66). Perhaps, my grandchildren will see housing as the one pure family investment; however, when the mortgage deduction is taken away in the next 2 years, the days of housing as an "investment" ENDS.
Mar 20, 2012 10:27AM
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depends on how you define the word "investment ".....I invest in good foods and exercise to promote my health....I invest in a home to protect me from the elements...a place to store my stuff ...me and friends watch the plasma ...sleep, eat, home for my pets ....you wanna invest for retirement ....buy international best in class blue chips that are within 10% of trailing 52 wk high low .
Mar 20, 2012 10:07AM
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MOST everyone I know, self included,  bought as a home, not investment. During the Boon in prices, perhaps that was different, but usually we want a roof over our head. The memories of "Grandma and pancakes" wouldn't effect my decision to sell.  Age, where you need to down-size, or those who simply cannot afford the mortgage payments and/or upkeep, probably feel the same.

I know several top-notch Realtors who are now only working part-time.

I am selling my place for less than half of what I pd. in '06. That does NOT account for the money spent on improvements.....you never recoup that .

What I do realize from the Sale will pay my "Entrance Fee" at a "Continuous Care" Facility, at least.

Mar 20, 2012 10:01AM
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If you live in the same house for 30 years and end up actually owning it, without ever re-financing, does it's increased value reflect the actually amount of inflation over those 30 years.  Yes, it is worth more than you bought it for , but is it worth more in real money?  I am not sure.
Mar 20, 2012 9:32AM
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For people who can predictably stay in one geographical area, a home is still a good investment. For people who are going to move a lot, I wouldn't suggest it. I remember reading in the 90's and early 2000's that places like Bend, Oregon, Tucson, AZ, etc were overpriced real estate. Turns out looking back, that they were and values have adjusted. We all saw another adjustment in the late 1980's. 

Canada did not allow their banks to invest in derivatives, required more capital reserve and has laws that are generally conservative when it comes to the banking industry and home loans. It's interesting to go visit there and see that their real estate is still holding it's value, that they are still building new houses and commercial buildings. Maybe it's time we pushed our elected representatives who seem to be only out for one thing, re-election, to pass some bi-partisan legislation to really stabilize the banking and home loan industry. Canada doesn't have a quasi private FannieMae, GinnieMae organization that pretends to guarantee home loans and protect bankers/loan companies with the taxpayers money ultimately. We can be a strong nation again. It's going to take leaders with INTEGRITY.
Mar 20, 2012 9:07AM
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A home is a place to pay down your mortgage so you own it before you retire.

 

Paying your taxes, insurance, and maintenance for your home is cheaper than rent in your golden years.

Mar 20, 2012 8:56AM
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I could care less what my house is worth. I’m paying a little less for my three bedroom house than I would for a nice two bedroom apartment. I bought my house with payments I could afford and in 9 more years it will be paid for (I took a 15 year mortgage). Just because I am temporally underwater, does not bother me. I think if you buy for the long haul real estate is a good investment. You just have to plan for the ups and downs by buying what you can afford.

Mar 20, 2012 8:34AM
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I love the people who think a house is anything but a place to eat and sleep.  I sold mine to my Ex before the market tanked, and then bought near the bottom (we haven't hit yet).  I put 50% down and I've lost about 10K but I can walk if I need to and still have a pot to pee in.  My neighbor across the street bought with 0% down paid more than me thinking the market would recover in 3 -6 months.  She is upside down.  Her home value has dropped 30K and she is under water.  Her speculation will keep her in a house she can barely afford until the market returns in 3 - 5 years (Maybe)
Mar 20, 2012 8:12AM
Mar 20, 2012 7:59AM
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Contrary to the article, homes are investments. It's unfortunate for those who bought in 2005 that they turned out to be bad investments, but it doesn't change the fact that they are still investments by definition.
Mar 20, 2012 7:57AM
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It may not be an investment, but it sure is a hedge against inflation.  Obama didn't print all of that money just to sit in the bank vaults.  When it's released, and it will be, we'll see 10-15% inflation rates and articles here saying "How owning your own house preserves wealth"
Mar 20, 2012 7:52AM
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I think that there is and was a group of real estate speculators who certainly looked at their purchases as investments.  But for the average person, I don't know that they viewed it that way.  At least not in the same sense. 
Most Americans who own or owned homes did hope that at the end of the day (retirement) the home would be worth more than they paid for it.  But still not so much an investment.  Primarily the home was a place to live and raise your family.  I don't think that many people started seriously thinking their home purchase was an investment until the 70's or so.  That just isn't the case though these days.  Yes, we hope it's worth more than we paid for it, but maybe just keeping up with inflation over a long period of time would suffice.

Mar 16, 2012 11:24AM
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You start with all the ridiculous closing costs paid to all the realtors, appraisers, mortgage brokers, and title companies laughing from the bottom of their bellies.  Then you add the bitter taste a lifetime of ever increasing charges for interest, pmi,  taxes, insurance and multiply that that by the warmth of a skyrocketing winter gas bill.  Then you subtract all your free time that you spend mowing, painting, and repairing, add the power of an outragous summer power bill and times that by the square root of kissing your downpayment goodbye.  Multiply all this by about 50,000 unexpected expenses and 100,000 "joy of home ownership" hassles.  And then you have the value of a home.
Mar 16, 2012 11:20AM
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To paraphrase Michael Corleone, "We'll get there. We're not there yet, but we'll get there."
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