Bookmark and Share
  • Text +
  • Text -

Co-authors of "Houseonomics" Available to Explain Why Owning a Home Is Still a Great Investment

Nationally, residential property values have dropped 14.4 percent over the first quarter of 2008 compared with 2007 (S&P/Case-Shiller). A record number of homes are in foreclosure, and credit has tightened.

Yet Gary N. Smith, professor of economics at Pomona College and co-author, with Margaret H. Smith, of the recently published book Houseonomics (FT Press, 2008), makes a convincing case that home ownership is still an excellent investment for most people.

“We are convinced that real estate continues to be one of the most appealing ways for you to achieve financial security and, along the way, to enjoy—indeed love—your investment in ways that you could never love stocks, bonds, and bank accounts. This is a buyer’s market, which can be a great time to buy a home,” say Gary N. Smith and Margaret H. Smith.

The Smiths offer Five Home Ownership Rules for Today’s Housing Market:

1. By owning your own home, you save rent you would otherwise have to pay a landlord; we call the rent you save, net of expenses, your home dividend.

2. People who fixate on price appreciation—believing that the only way to make money in real estate is if prices go up by 10 percent a year—miss the whole point. The home dividend is the cash cow that makes a home a great investment.

3. Don’t buy a home because you think the price will be 10 percent higher a year from now. Do buy a home because you think that in the long run your home dividends will make a great investment.

4. Don’t flip homes and don’t use your home as an ATM.

5. In most parts of United States, a home is a great long-term investment.

Professor Gary Smith is available to explain why a home can be a great investment, and can offer tips ranging from choosing a realtor, finding the right home and getting a good mortgage to remodeling, selling a home, buying a vacation home or a rental property, and more.

“You do not need to be a home flipper to be a successful real estate investor. You do not have to pay unconscionable sums to motivational speakers who will try to persuade you to risk your life savings on speculative real estate gambles. You can simply be a sensible homeowner who enjoys the home you live in and the financial rewards that go with homeownership. Build up equity in your home and invest your home dividends wisely. If you do, your home will be the best investment you will ever make,” sum up Gary N. Smith and Margaret H. Smith.

About the Authors:

Dr. Gary N. Smith is the Fletcher Jones Professor of Economics at Pomona College. He has published eight college-level textbooks, more than 60 research papers and eight educational software programs, and was a keynote speaker at the Brookings Institution in Washington D.C. and the Mortgage Finance Industry Summit in New York City. He holds a Ph.D. in Economics from Yale University and a B.S. in Mathematics, with honors, from Harvey Mudd College.

Dr. Margaret H. Smith is president and financial planner/coach for Smith Financial Place, a holistic fee-only financial planning firm. She is a Certified Financial Planner, a Certified Integral Coach, and a Registered Investment Advisor. She holds a Ph.D. in Business Economics from Harvard University and a B.A./M.A. summa cum laude, from Yale University.

They are principals of Smith Financial Place and have been interviewed on or quoted in The New York Times, The Wall Street Journal, CNBC, Smart Money, and Motley Fool.

Houseonomics: Why Owning a Home is Still a Great Investment
Dr. Gary N. Smith & Margaret H. Smith
240 pp
ISBN-10: 0137133782