Rent vs. Buy

By
Real Estate Agent with Homes and Food, Inc.

Over the last few months, I've had a surge of new clients contact me about purchasing a home who were currently renting.  Most of them were disgusted about the amount of money they were having to pay.  Our area, Hampton Roads, Va., currently has approximately 1.7 million people scattered amongst 7 cities.  That's a lot of people who have to live somewhere. 

So what are some of the reasons why people choose to rent vs. buying a home?  Are they fresh out of school and just getting started in their careers?  Do they have mediocre credit and waiting for some of the blimishes to be removed?  Are they new to Hampton Roads and want to get more familiar with the neighborhoods and schools before purchasing?  We do have have a large military population in our metropolitan area due to the many bases here, one of which is the largest naval base in the world.  These are all good and valid reasons to rent, however, renting should just be a stepping stone if you plan on staying in your area for any length of time.

I know.  I know.  There is no big secret about what's going on with the economy and the mortgage industry these days.  The media has done a great job about scaring the general public half to death.  Let's see.......Rates are still really good.  Inventory is through the roof.  Sellers are reducing their prices and still motivated.  Buyers can qualify for homes now that they couldn't think of touching just a year ago.  What could possibly be the reason why buyers aren't pouncing on this situation?  There are three possible reasons I can think of....1)  Bad credit -  that's not the majority.  Most people do meet the criteria needed to get a mortgage.  2)  Fear of losing their job -  well, this is a good one especially when we hear the news about unemployment going up( again, thank you media).   We watch the news and hear about companies laying off thousands of people and I really feel for them but most of those people aren't going to wither up and die.  After being ticked off, they'll go out and get another job, start a business, or do something.  Also, if the fear of losing your job is keeping you from purchasing, don't you have to live somewhere whether you rent or own?  3)  Waiting for prices to come down more -  Personally, I think this is the main reason.  If you said this 2 years ago, I couldn't argue with you but now I can. 

I am a very busy realtor and I'm out there every day showing houses and writing contracts.  Over the last couple of years, sellers have continued to reduce their homes in order to compete with the many foreclosures that we have on the market but I feel that we are coming to the end.  I'm starting to hear more and more from sellers that they just can't go any farther.  I think in general that the deep discounts are over.  You should still be able to get your closing costs paid in most cases and maybe a little off the sales price but that's about it.  Think about it.  Most of the homes on the market today were purchased by the seller within the last 5 years, during the crazy seller's market.  Since home prices have reduced, what equity they may have had is pretty much gone and most sellers don't want to go into their savings account just to sell their home.  If you want to buy a home, the time is now.  If you are able to buy a home, you are in the best position for building equity in the future.  Put me to work so I can stop ranting like this. 

Jeff Nelson
The Real Estate Group
757-749-1616
Homes and Food, Inc.
Hampton Roads Real Estate

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Jeff Nelson

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