Rent or Own, is There a Question?

This post is the result of interviewing a variety of successful brokers in Lane County from different real estate companies on the topic of renting versus owning. The Wall Street Journal and other publications have called the worth of homeownership into question as noted by John Wallace, CEO of the Oregon Assocation of Realtors in addressing the Willamette Association of Realtors.

How should we respond when someone confidently states that it makes more sense to rent than to buy?

How should you the consumer sort through this question?

Two people stressed something I'll call professional empathy as a framework for their answer. Kevin J. Brown of Windermere Lane County painted a picture of no-nonsense ultra-personalized options counseling. This approach requires the client to have complete trust in Kevin to truly lay out all the options on the table with all the variables involved, often including tax experts, legal professionals, additional family members and close friends to offer explanation and support. The bottom line answer is a choice not to answer philosophically but rather personally; this focus points to the client's life and their decision, case by case.

Similarly, Lisa Ward at Keller Williams Eugene Springfield matter-of-factly explains "the roller coaster ride you're on" to her clients while also offering her opinion that it is a good time to buy, even two years out from a bankruptcy. But her approach is to throw out scenarios and facts. From there, clients make the call they are comfortable with given their situation. The choice these two made to respond to my question about whether renting or buying is more advantageous could be addressed in many ways, but for Kevin and Lisa the relational angle dominated their response.

Brent Cole of RE/MAX Integrity looks thoughtful as he says quietly, hand on his face, "When someone else dictates your cost of living--not a good place to be. The tax deduction and current interest rates are immediate benefits of buying. I am optimistic about appreciation of property historically and now. Without optimism, appreciation cannot occur. I know someone who owns a home with a $1300 mortgage payment which could be rented for $1250 but with no tax benefits. For investors it's even better." Brent's wide angle view of the situation shows he is a broker who is very interested in the idea of investment as well as the welfare of his clients.

Tony Losco of Key Realty Group in Eugene is clear about the opportunity, "You'd be stupid not to buy right now, if you can. To buy at seventy cents on the dollar is a smart investment. Foreclosures are fifty cents on the dollar from a few years ago, as are some short sales. It's a bottom up feeding frenzy; first time home buyers should jump in with both feet. That will stimulate the market. It is true that a seller may be better off renting their house out rather than selling it. Especially since many home owners are not eligible for a short sale, including anyone with more than one property or vacant properties. Investors looking right now can at least break even, if not be profitable in purchasing now, especially with these interest rates. I closed two cash purchases the same week, and each of them took just 10 days to close. Both were investors that see the market is at the bottom and are taking full advantage of it."

Howdy Cole of RE/MAX Integrity summarizes his thoughts this way, "The Northwest seems to lag behind the national trends, but for now we have low prices and are seeing things like sellers paying buyers' closing costs. It is easier to get into a property. People like to have a piece of ground they can call their own. Some of what we hear in the national media, if interpreted locally, turns into jumping at shadows when you look at the facts. This is a favorable market for buyers."

The professionals quoted in this article are respected for their competence and have rich experience in the real estate industry. I think their voices are worth listening to, as national headlines don't tell the local story very well.