Buy or Rent? Buying is Starting to Make Financial Sense Again

Originally Posted on Chicago's Real Estate Blog, The Chicago 77, June 29 2009

This week’s Crain’s Chicago Business (PDF) is reporting that the relative cost of owning vs. renting is swinging back in favor of home ownership across the U.S. and in Chicago. The Chicago real estate market is already seeing signs of this with an increase in pending home sales. There are great expectations that June’s sales numbers will finish off what should be a strong second quarter. Realtors® see this trend continuing as many of their buyers have reengaged and are actively looking at properties and going forward with offers. Tire kickers have become purchasers. As sellers have been adjusting their prices, buyers have making repositioning themselves regarding financing. Borrowers are expanding their lending options, taking advantage of the $8000 tax credit and creating greater equity in their purchase with larger down payments.

Disappointment Creates Opportunity

Roosevelt Collection, a 342 unit new construction condo building in Chicago’s South Loop is now going to be rental apartments according to this week’s Crain’s Chicago. Many new construction buildings sold as condominiums are ultimately ending up as rentals.

There is always a positive out of a negative.

The purchasers who entered into contracts on these units at the height of the market should look at this as opportunity. They now can take advantage of today’s prices and inventory. Currently on the market buyers can get new or almost new units and take advantage of historically low interest rates especially in neighborhoods like the South Loop and West Loop where the inventory is plentiful and full of brand new buildings with empty units.

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The Value of Open Houses

The ongoing debate of as to if open houses have any value. This is my professional opinion. In any transaction there many different avenues to how a buyer finds a property. The same road does not get us a contract 100% of the time. As a Realtor®, it is my job to provide my clients a 110% effort to sell their home.

According to a study that Harris Interactive® conducted on behalf of Trulia, 91% of buyers will visit open houses during their home search with the internet being their primary resource to find them. (Click here for the complete release from Trulia).

I have had success stories of selling listings through open houses just as I have through the many other tools that I use to market my listings. That is why I continue to have them week after week. Open houses are just one piece of the pie in marketing properties. It is our job as professionals to offer our clients a complete package of services to achieve the goal for which we were hired: sell their property.

Open houses create opportunity just as all of the other means that we market properties. Yes, it is also an opportunity to pick up other business as many buyers coming through have not yet established a relationship with another agent and that property is not right for them. Yes, there are weeks that few to none come through. Yes, there are weeks that there is a lot of traffic with no real bites. It is all worth it for the one that comes through and writes the offer. It only takes one.

To discount open houses as not being a viable tool would be the same as discounting any of the other means that we use as real estate agents to market properties.