This post was originally published on October 21, 2009. However, some of my best posts were written within the first few months of blogging when I had only a handful of readers. Enjoy a blast from the past… (can you tell I’m swamped this week!)

My husband and I love watching movies at night, thanks in part to Netflix, it’s really easy for us to download a new or older flick. However, we have noticed a disturbing trend in movies, even those that are 20 years old or more. The characters in films, whether they are broke, middle-class, or wealthy, have beautiful homes. It doesn’t matter if the character in the film has a high paying job, or a minimum-wage salary, or is out of work, they somehow own a substantially-sized home. How can this be? Basically, as my husband so eloquently put it, the film industry is selling us the lie of the American Dream.

Whorush: 5 sites by this AdSense ID

Whorush: 5 sites by this AdSense ID

Let me begin by saying that I know a few years ago, with the whole mortgage fiasco, many people were able to purchase a home well above their financial means. So, perhaps 20 years ago, it was a similar situation, which is why we also see this trend in older films as well as newer ones. I know films also exaggerate life, and films only want to show us what we want to see. According to tinsel-town, the American public wants to see all families living in large, beautiful houses. So, the lie perpetuates because we want it to.

Yet, it got me thinking, is this American Dream something that is a reality for most people? Does the film industry take the majority of the population’s living situation and just expand it for all it’s characters? I did a little homework on BestPlaces.net to check the percentages of home ownership across the nation in a few different cities and this is what I found:

• First, I took a look at Los Angeles, CA, since this is the county I live in. The home ownership rate here is 37%, compared to the national average in the United States of 64%. Okay, so this makes sense considering the high cost of property. What doesn’t make sense is the recently released movie, Smother, (a really bad movie, by the way) showing a young couple owning a beautiful Craftsman-Style home in Los Angeles on a beautiful tree-lined street. In this movie, the character’s include a wife, that is a teacher (we all know that teacher’s aren’t wealthy by most standards), and a recently laid-off husband, who goes back to selling carpet. My take: Selling the American Dream by Lying. (Two other movies off the top of my head with similar scenarios that take place in LA: I Love You, Man and Big Trouble : outrageous homes on a small income).
  
• I then compared Fargo, ND, whose home ownership rate is 45%, to the national average of 64%. One of my favorite, slightly older, movies is Fargo. According to BestPlaces.net, less than half of the people in this city are homeowners, so again the reality of all the movie’s character’s living in a terrific home is off. My take: Selling the American Dream, though the freezing cold winter’s may keep some people from settling down permanently.
• A more realistic view from a film that I like would be Singles, a movie about single people living in Seattle (again a film from the early 1990′s). The characters in this film all rent apartments and struggle to meet a life partner and pay the rent. According to Bestplaces.net, this is a more realistic view with the home ownership percentage at 45%. My take: A realistic perspective of young 20-somethings and early 30-somethings trying to keep their heads above water and get their life figured out.
• Another city I compared is Albuquerque, NM, with a home ownership rate of 56%. You could almost call it Americas Home Place since more than half the residents own homes. I recently watched Sunshine Cleaning, set in Albuquerque, NM. The film stars the lovely Amy Adams (from Enchanted). The house the main character owned was quite a fixer upper, but it made sense considering she was a single mom who cleaned houses for a living. My Take: a much more realistic version of life, which is refreshing in a film.

Sunshine Cleaning - a more realistic life view coming from the film industry.

Of course, I’m not quite sure where Bestplaces.net came up with the national average figure of 64%. Each city I researched, and there were quite a few others that I didn’t list, kept coming up around the 50% range. There must be one state in which the majority of the population owns homes, but I didn’t find it.

Do any of you notice this in films you like? Do you ever find yourself sneering at the characters saying, “How did you afford that lifestyle and that house on your meager income?” Do you think the film industry is purposely selling the American Dream or just trying to lift our spirits and give hope to those that haven’t achieved it yet? I’m I being too cynical, or obessing over this topic?

I’m not very hip when it comes to music, but thankfully my husband is a music connoisseur. One video and song I’ve become especially fond of is Edward Sharpe and the Magnetic Zero’s song Home. There’s just something about the video and lyrics that makes me think back to the free loving days of the 1960′s. Of course I wasn’t alive during that decade, so I can only postulate what it may have been like during the love-ins and hippie era of flower children and bell bottoms. Now that I’m finally settling into my new apartment with the thought of living here for a few years, I’m still dreaming of a little house of my own in the near future. This video inspires me to think of home slightly differently. As the lyrics note, “Home is where ever I’m with you…”.

Perhaps I need to think more along these lines and not worry so much about finding my own home.

A couple of days ago I mentioned a comment I overhead. The one about how “everybody” is having to short sale their homes so “everybody’s” credit will be affected by the housing market. I also mentioned at the very end of the post (if anyone actually read to the very end) how I predicted 4 years ago that the housing market wouldn’t keep rising. My main reason for this prediction was that the houses in my area were selling for astronomical prices. Prices that didn’t match salaries. I knew that something wasn’t right. When a couple grosses $75,000 but is able to purchase a house for $550,000 there’s something fishy going on. (That’s over 7 times their income!)

However, our mortgage broker friends tried to convince us that prices would keep rising because there were all these new kinds of loans available for buyers that would make the monthly affordable. Still, I didn’t buy it. Though the monthly was affordable, as little as I knew about finances and real estate, the payment wasn’t even covering the interest.

Now my initial prediction wasn’t that the market was going to tank (though secretly I sort of hoped it would as someone sitting on the sidelines realizing I couldn’t afford a house. -No harm meant to those in this situation – I just wanted to purchase an affordable house.) I thought it would level off for many, many years until salaries caught up with the tremendous housing prices.

Now that I’ve seen the housing market crash and the outcomes thus far, I have a few new predictions to make. Just to protect my ass-ets; I’m not a financial analyst, genius, true psychic or real estate agent. Just a very realistic, hard-working person who is still renting!

• The housing market will continue to scrape along the bottom for at least another 18 months.
• Some areas that weren’t hit as hard will do just fine and may see a market more similar to a “historic norm”. Others, like the Southwest will see even more foreclosures.
• The government will try again to boost home ownership by offering incentives, perhaps in the form of taxes or some other incentives in conjunction with banks, within the next 18 months.
• The housing market will not be the industry to kick start our economy. (If I were a real psychic, I could predict what will!)

Obviously none of these predictions require Mensa abilities. They are just realistic statements given the current facts. I don’t want to predict farther than a couple of years, since I do think that the market will eventually stabilize and get back to a more normal flow. Well, I guess I can say that this is my prediction for 5-years out – a more normal housing cycle (smaller increases and decreases over time. Click here for a historical housing graph – it appears that an 8-9% increase over 20 years is “normal”.) I don’t think we’ll see this roller coaster housing market again for a very long time; it left too many people with an ill-taste in their mouth.

Do you think my predictions are out of whack? Do you have any predictions about the housing market? What pattern did you see in your area that signaled a “red flag”?

Upside Down?

I recently read an article on MSN.com about underwater homeowners that made me a little angry. First, the article’s focus was on a young lemming, I mean man, who was only $30,000 “underwater” on his mortgage. I say “only” because though he may be slightly upside down on his mortgage, $30,000 isn’t nearly as much as some current homeowners today. Second, the reason this young man was the focus of the story was because he was hoping to find a job elsewhere and felt “tied-down” to his house. Didn’t he think about this commitment when he purchased his house to begin with? Obviously not.

The recent housing bubble seemed to entice many people into home ownership without thinking about the true consequences of owning a home. It sort of reminds me of the lemmings all falling off a cliff together. As a person on a mission to own a home in the near future (though that may be anywhere from 1-3 years from now), there are some definite advantages and disadvantages that need to be clarified:

Advantages of owning a home:

• If you live in your home long enough (usually a minimum of 5-7 years), you can make a small profit or at least recoup some of your mortgage payments. With renting, you never recoup any of the money you paid over time. Some will argue that renting costs much less than owning and you can invest the difference. However, I beg to differ. I live in an area where rent is about the same as a mortgage (at least at this moment in time).
• You can settle into your home knowing you’ll be there as long as you’d like (providing you continue making your mortgage payments!) Renting a house means you are subjected to the owner eventually selling the place or raising your rent beyond what you can afford. At least with a mortgage, you know how much you are paying each month (unless, of course, you didn’t read the fine print!)
• You can decorate your home anyway you feel. As a renter, I’ve had to repaint walls back to eggshell white because my creative inspiration ticked off the landlord.
• You can keep as many pets as your city allows you to. Another disadvantage with renting – some places don’t allow pets or have a maximum allowable amount (usually 2).
• Tax write-offs. Some of your interest can be written off your taxes. I’m not very familiar with this. Anyone care to comment on this advantage?

Disadvantages to owning a home:

• If you need to move to find a new job, you might have a harder time moving. With a mortgage, you’ve signed an agreement to pay on the property for 15 to 30-years. Of course, there are alternatives to selling your home, you could rent it if need be. In contrast, as a renter I can move with a 30-day notice; no strings attached.
• If you purchased your home at the peak of a housing bubble, your home may have lost thousands if not hundreds of thousands of dollars on your investment. Obviously, this could be a serious negative consequence of owning a home. However, if you’re willing to live in the house 15-30 years, you might be able to recoup that loss due to appreciation. This doesn’t apply to renters.
• You might see your home as an ATM and pull out whatever equity you’ve built up. A common trend seen during the past bubble was people taking out home equity loans, or easy money. Those loans need to be repaid and now that the homes aren’t worth what they were, they now have negative equity. Renters are never in a position to “borrow” back some of the rent they paid so that easy money loan stuff doesn’t exist.
• Home repairs. In order for homes to remain in a livable condition, annual maintenance and repairs need to be completed. Depending on the state and age of a home, those repairs can be costly. As a renter, I’m technically not responsible for repairs, which theoretically saves me money. (Someone needs to remind my landlord of this!)

I’m sure there are more advantages and disadvantages that I could list. The bottom line is most people have to pay for shelter. You can either own that shelter or rent it. Because of the recent housing fiasco, many people view owning property negatively. Yet there are still benefits to both renting and owning. So don’t be a lemming! Weight the pros and cons then make a sound financial decision based on your own needs.

Next week I’ll be reviewing a book called Renter’s Win, Homeowner’s Lose. The title alone piqued my interest. Stay tuned for my review….

What other advantages or disadvantages am I missing? I’m I way off the mark?

Small house plans, little house plans, anything to do with residential architecture seems to resonate with me. Perhaps that’s why I named my blog “Little House in the Valley.” However, recently our little rental house in the valley has been the bane of my existence. How’s that? I run into door ways while turning a corner, I trip over  the vacuum that someone’s left in the hallway, I have to leap over hall fans that are placed in our narrow hallways to generate some air flow; all of a sudden our little rental house seems just too little.

But I’m not going to let a poorly designed, 1950′s ranch style house deter me from my dream of a little-not-so-mcmansion kind of house. There are a plethora of options out there, especially if you’re a DIY type of person. I’ve found plenty of prefab designs to drool over, yet one has recently struck a chord with my little house dream: Blu Homes. Not only do their prefab homes start at a reasonable price, they are environmentally friendly, and have open floor plans. Their four initial designs range in size from 408 sq. ft. to over 1,500 sq. ft. (still somewhat small compared to modern-day homes.) The basic floor plan that all four designs include is an open design incorporating the living/dining/kitchen area. No need for walls separating out each room making it compartmentalized, Blu Homes opens up the “living” area for a more natural flow of traffic. A few reasons why an open floor plan appeals to me:

• Increased air flow. This is important considering I own pets and my husband is a smoker. The dust, smoke, and pet smell is easily trapped in smaller rooms, but diluted in larger areas (not so sure this is any safer, but it’s less smelly!)
• Furniture options are innumerable. Instead of worrying about wall placement, or too much wall space, furniture can be moved to the center of the living space giving each area it’s own function, while at the same time, keeping foot-traffic flowing.
• No more running into doorways or tripping through narrow halls. The days of the long, narrow hall are disappearing in modern home plans. Yet, they still do exist. That wasted space isn’t needed in a living area, there’s no need to separate the living room from the dining room or kitchen. An open floor plan makes better use of available space without clouding it up with hallways.

Blu Homes Element two-bedroom floor plan

Blu Homes smaller plan, the  two-bedroom Element, is one of my favorite plans. The only thing I’d add would be a kitchen bar or island for seating 2-4 people, an option available in two of their larger plans. The open floor plan in the living area allows endless possibilities for furniture arrangement and foot-traffic. No more running into doorways!

Does your home have an open floor plan? Are there drawbacks to an open floor plan?