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.
The 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?
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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.
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.
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.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.
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