I’m no financial wizard, not even a Hogwarts first year plebe. When my husband Harold trudges up the stairs at the end of a long MSNBC day and says, “The stock market fell two hundred points,” I say, “Why?” There must be some reason, right? But Harold walks off mumbling something about blue chips and growth stocks and it becomes apparent that he doesn’t really know either.
So how do house values go kerplop? I understand supply and demand. I get survival of the fittest. But losing your net worth because of hinky online traders and hedge funds? It’s all smoke and mirrors to me, subjects for those higher level wizarding classes like Perma-Bull Potions and Defense Against the Dark Dividend Arts.
My house, however, is pretty straightforward, a confab of bricks and mortar, as solid as a worldly object can be. Oh sure, there are cracks in the driveway and a couple of loose tiles on the roof, but other than that, it’s a sturdy and reliable tax shelter. How is it that its value has the potential to drop like a rock?
There are certain accepted property value basics: If the house faces a lake or an ocean you’re guaranteed a strong return, even when there’s a good chance that a hurricane might carry that house to a nearby island at some future date. If your house is close to schools and shopping, that’s good too. Not too close, of course. Value points are deducted if you share a back fence with the Kmart dumpsters or if you border the Alabama Institute of Skunk Taxidermy. Past that, house value is all about bedrooms and stainless steel kitchen appliances and personal taste.
There’s a show on HGTV that demonstrates what you can buy for a fixed amount of money in various parts of the country. The bang for your buck varies widely, but none of them are cheap. Most people take out a long term mortgage with the hope that when they sell, the house will have appreciated in value and they’ll make a tidy return. Now, the return is not so tidy and no one appreciates that, especially those wily speculators who dumped money into property flipping. When the market flopped, it left them holding a fistful of debt, stainless steel appliances or not.
George Carlin said that a house is just a place to put all your stainless steel stuff, but it’s more than that. Even when it’s not a tax shelter, it’s a shelter. It’s the place that keeps the rain off your head, the place that keeps you warm in winter and cool in the summer. It’s where you eat and sleep and flop down on the couch at the end of a long hard day. It’s where your kids took their first steps and played Candy Land on the family room rug. It’s where you sit to pay your bills and gather with your friends to watch the big game on TV. It’s where you put your Christmas tree. That has to be worth something.
Your house is your home, but in the property value arena someone else holds all the cards. That seems a bit askew. I’m hoping things will settle down shortly, for what it’s worth. ?
