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Jim Gillespie, CEO, Coldwell Banker Real Estate, Answers Questions About Homeownership

By Ryan Lawrence
Copywriter, Interview Expert
and KingofHowTo.com Special Contributor

09/21/2011


I recently had an opportunity to talk with Jim Gillespie, CEO, Coldwell Banker Real Estate LLC, about the state of home ownership during this current climate of financial instability. He made some interesting points about how the recession has affected the real estate market and made it clear that, while homeownership is on the decline, he believes an upswing is on the way.

With the recent recession, homeownership is on the decline. Where do you see things settling as the new 'normal?'

Gillespie: "The recession has impacted our lives in so many ways and homeownership is no different. We will likely see homeownership rates lower with many predicting it will settle in at the mid-60 percent range, compared to the near 70 percent figures we had seen in during the housing boom. But this is OK because homeownership is not for everyone."

Do you think that the wave of foreclosures and current climate of financial instability will cause people to opt against home ownership?

Gillespie: "Some have suggested that we will become a “rent based society.” I don’t agree with that at all. While the last several years have clearly been a challenge, we cannot forget the previous 70+ years where homeownership has become part of the American Dream. Home ownership is emotional. We don’t trade our homes like you would a stock or bond. We live in our homes, enjoy the freedom to make changes to the home, establish roots, raise our kids and become vibrant and critical members of our community. I have never met anyone who looked at a “best places to live” or “best places to work” type list and made an immediate decision to sell their home and move. We just don’t do that. The other simple fact is that those who rent are paying someone else's mortgage and therefore providing him/her with added income and tax advantages.

"With that said, those who are not financially secure or fear job loss, along with those who envision moving within a few years likely should not buy today. Also those who have a lower monthly payment via renting and enjoy having that discretionary income for a variety of reasons like traveling and entertainment should not buy today. But obviously there is a tradeoff and they may not benefit from long-term positive impacts of homeownership."

So who should be looking to buy a new home right now?

Gillespie: "For those who have good credit, a secure job and financial viability, there is no denying that today is the smartest time in my 35 years in real estate to purchase a home. It’s all about I.I.I.P. Inventory, interest rates, incentives and price. In most markets around the nation, home inventory has increased giving buyers a greater choice. At the same time, mortgage rates remain at near historic lows and home prices have decreased the last two years which is the first time that has ever happened since World War II. Prices dropped about 2% in 2007, 9.3% in 2008 and 12.4% in 2009 according to the National Association of Realtors. This has made home affordability the best since at least 1973 and maybe ever."