(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)
Last year, my husband and I lived in a large two-bedroom apartment that came fully equipped with: two parking spots; a balcony (which had an ocean view if standing on my tippy-toes); a giant swimming pool (that was heated year-round); an eight-person Jacuzzi; and small waterfalls running throughout the complex. The complex was located near all of our friends, down the street from my husband's job, next door to a 24-hour fitness, one block away from a large grocery store, half a block from a beautifully landscaped walking trail, and three blocks away from the main street and pier of one of the more popular beaches in Southern California.
This was “the life,” to say the least.
We now sit in at least an hour of traffic each way (minimum), we have to get in the car for more than 15 minutes to get to the beach, and for more than five minutes to get to the grocery store. Forget time for the gym, and now spend our weekends both mowing our dead lawn and endlessly battling with the neighborhood gofer problem simultaneously, or we are at Home Depot so we can pretend to fix things.
Now, I am not trying to complain-since I know being 15 minutes from the beach is still “the life” (especially when it is 80 degrees on certain winter days), but “the life” is different for us now, in ways that make me wonder if we chose the right path.
Our reasoning in moving from an apartment and buying a home was simple.
First, we had a baby and we wanted more room. We couldn't afford a home in our dream area, and moving into a three-bedroom or four-bedroom apartment there meant that our rent would be significantly more than that of a mortgage payment. Therefore, we thought it was “the right thing to do.”
Which brings me to everyone else. You, our readers, and your situation. Why did you choose to buy the house versus the apartment or vice-versa? To build equity? Certainly not to make “an investment,” right? What makes it all worth it? What do you see as the tradeoffs between apartment living and home ownership?
These questions come to mind, not just because of my own personal situation, but because of my work here at GlobeSt.com. As other reporters and I have noted in many articles, the apartment market is in a marathon-like recovery. According to one article, the reasons the sector powered through last summer’s economic doldrums to record strong absorption gains and higher occupancy rates included foreclosures in the singlefamily market, the inability of most Americans to meet mortgage financing requirements, and households choosing rental housing for lifestyle reasons or employment mobility. These and other reasons were outlined in a report by Marcus & Millichap earlier this year.
But I think there is more to it than that. I believe—and Jeffrey Allen, CEO of Raintree Partners agreed with me (as he said at a Beech Street Capital event earlier this year)—part of the reason the apartment market is doing so well is because people have had a psychological shift in attitude about buying a home. The apartment market even has a term for this: “renters by choice.”
Some of the reasons that people choose to rent versus own include the desire for easy mobility, especially among younger people who aren't sure where the jobs will be. Others are discouraged by the home loan process, which was deceptively simple before the crash but has now become quite daunting, especially for first-time applicants.
It's arguable how widespread this psychological shift is and how long it will last. Home ownership has long been touted as the American Dream, and there will always be people who yearn for a place of their own. But not all people dream the same dreams, so maybe some of us have been chasing someone else's dreams in the mistaken belief that they are our own.
In my case, my husband and I still see positives to home ownership, but we seem to be finding more negatives these days. I used to think of buying a home as an investment, but I don't see it really paying off financially, so there has to be some other payoff to make it worthwhile.
What's your take on this?
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
