Industry interweb locales were on fire this past week when Gary Vaynerchuk – a sought-after motivational speaker, best-selling author and respected tech entrepreneur – slammed homeownership in a podcast interview that went viral.
On the Cannonball Mindset podcast, Vaynerchuk called homeownership “bull****.”
“I do not think the American dream should be buying a home anymore, I think it’s full of s***,” Vaynerchuk said. “It’s a bad use of upfront capital, and it ties you up and it’s just not smart. And what is it for?”
While he admits he does own a home, Vaynerchuk said he wished he didn’t and that in the future he plans to rent in perpetuity. He also likened homeownership to college, saying that while everything thinks it’s essential, most people don’t need to go.
“I love when s*** is accepted, but it’s now broken, but because college and buying a home might have really been awesome, and I actually believe this in 1954 and 1973, the problem is it’s 2019,” he continued. “Why do you need to own a home? To leave it to your kids? They can rent too… I think the whole thing is going to go. In the next 50 years, it takes time to rebrand.”
Are you enraged yet? If so, you’re not alone.
Many in the industry took to social media to let everyone know how upset they were at this soundbite.
The timing added an extra layer of controversy, as Vaynerchuk has just hosted his Agent 2021 conference in Miami, billed as an event to help mortgage and real estate professionals grow their business. And now he expresses an opinion that flies in the face of the work that we do.
But some financial advisors, investors, and entrepreneurs have said this very same thing for years, most notably by another industry favorite – real estate investor and sales guru Grant Cardone. But I have yet to see the industry break out the pitchforks for Cardone. In fact, I saw a ton of agents and loan officers attend his recent 10x event.
Look, this isn’t the first time Vaynerchuk has made this claim. In fact, he said it at Agent 2021 before an huge audience. And, when you look at the context of the conversation, maybe he isn’t wrong. But a headline is a headline, and this was a doozy.
But I don’t care what Vaynerchuk said about homeownership, and you shouldn’t either. Because in his world, it makes perfect sense. And more importantly, it isn’t going to make a bit a difference in the market.
Let’s break it down.
First, put Vaynerchuk’s views into context. We are trending toward the lowest level of homeownership since 1994. The youngest home buying generation has a 10% lower homeownership rate than older counterparts did at their age. Considering the state of the market, it’s easy to conclude homeownership is on its way out.
Vaynerchuk says not all Americans should be homeowners, just as not all kids need to go to college. And in a sense, he is 100% right. Everyone has a different life situation and different dreams, and just because that might have made sense in the ’50s and ’80s, doesn’t mean it still makes sense today.
We are living in a world where people can work anywhere and where they can have the freedom to travel the country while making a good living. We are seeing the rise of tiny homes, minimalism, and Airbnb lifestyles. We are subscribing to services – for cars, for office spaces – instead of owning. We are quite literally living in a subscription-based economy.
I am living in that world, and for the longest time, I too lived the renter's life, because it made sense for my situation. Then, when the opportunity and the need came to buy my first house, I did it at the bottom of the market. So, for me, it all worked out. My friends and family who bought before or after, either lost their house, are still underwater or will make very little off of sale their home.
So, despite the narrative that owning a home is the best way to build wealth, there are cases in which that is just not true. For some, it makes better sense to keep that capital for other things.
Those who work in the industry tend to prescribe to the idea that everyone needs to own a home, which is understandable for obvious reasons. But we need to be honest and say that owning a home isn’t right for everyone, without it being an attack against what our industry does. Consumers will appreciate that honesty, which I can guarantee you the honesty will help generate business.
So why should you join me in not caring about what Vaynerchuk said? You would be in good company. Every one of the top-producing agents and mortgage LOs I reached out to about this said they didn’t care. Why? I can sum it up with a comment from a $100 million-dollar producer:
“Economic factors will be the only thing that affects homeownership, so I focus on brand. For me, my brand is three things: integrity, advice and service. I help the people I can help now, and I help the people I can help later. No matter what anyone says, adding value first is how I will grow my business.”
This mentality is the core message from one of his favorite business books. What book is that? “Jab, Jab, Jab, Right Hook,” by Gary Vaynerchuk.