World War II had only been over for a few years when enterprising Dallas homebuilder Howdy Howard came up with a novel plan to get visitors to his listing. He’d hold an “open house,” and at the open house he’d offer free sodas to anyone who came by.
Oh, and he would also give away a Cadillac.
The scheme worked really, really well.
“Thirty thousand people came through within a week,” Frederik Heller, director of library operations at the National Association of Realtors (NAR), told Inman. “The lookie-loos have been around for a long time.”
A 1953 article in the National Real Estate and Building Journal covered the event and further states that, 12 days in, Howard’s “Holiday Home,” as the property was dubbed, had been “viewed by an estimated 100,000 persons.” The Journal describes the listing’s promotion as “the finest ever given a single home” and says it far exceeded Howard’s pre-opening hopes.
But Howard’s open house is notable not just for its massive draw, but also because it came at a time when the open house itself was just coming into its own. It captures, in other words, a moment when real estate was lurching into the modern era. And while most agents may no longer get tens or hundreds of thousands of visitors to their open houses, understanding the evolution of the still-popular marketing practice is useful for grasping how the real estate business became what it is today.
Heller told Inman that the first event resembling an open house that he is aware of happened around 1910. But at the time, the real estate world was a very different place. When people wanted to sell their homes, for instance, any agent in the area could come and post a sign in the yard. The result could be a small forest of signs.
“You could have multiple real estate brokers trying to sell the same property,” Heller explained.
But that was soon about to change.
Perhaps most significantly, real estate licensing regulations entered the scene in 1919. Heller said the rules marked a change before which there were no licensing requirements and “anyone could say that they were a real estate broker.”
That shift toward licensing was also part of a gradual professionalization of the industry that included the invention of the word “Realtor” in 1916. (NAR was founded in 1908, but operated under an earlier name at the time.)
Around the same time that these licensing and terminology changes were taking place, agents also gradually began using exclusive contracts. Heller said the contract began gaining traction in the 1910s, and marked a significant change in the way that real estate deals were conducted.
“It would show that there was one broker who would dedicate themselves to the property,” he explained. “So it wasn’t just someone throwing their sign into the yard with dozens of others.”
With licensing and exclusive contracts in place, the real estate industry in the years after World War I was already beginning to look like what it would eventually become in the latter part of the 20th Century.
But some key differences persisted in those early years.
“Usually a broker could only sell one property at a time,” Heller said. “They didn’t do more than one.”
Open houses did exist during this time, but Heller said they were generally described as a home being “open for inspection.” And they were initially used for properties such as model homes, and then eventually for listings with some novel amenity such as electricity, which was not yet in every residence.
As time wore on, however, the practice of holding an “open for inspection” event became more widespread.
“The 1920s is when you start to see it used more widely as a marketing tool,” Heller explained. “And the 1930s and 40s were when open houses became not just a way to sell the house but also to be used by real estate professionals as a marketing tool for themselves.”
To that end, agents during this period began for the first time to collect visitors’ names and contact information.
By the 1950s marketing had evolved as well.
“Advertising became more sophisticated then,” Heller explained. “So you would use radio ads and newspaper ads. It wasn’t just the open house that was used to market the property.”
It was also during this period that the industry began moving away from the “open for inspection” terminology and started gradually adopting the modern moniker, “open house.”
While some of these changes brought the open house close to its modern iteration, which many agents still use, there were still key differences. Perhaps the most notable was that a house would remain open for the entire duration of a day, and would sometimes drag on for multiple days at a time.
“The broker would just stay at the house until a buyer was found,” Heller said.
During the post-World War II boom years, real estate companies grew their influence and began hiring more agents. Those agents in turn were able to handle multiple listings at once, and increased demand for houses — fueled by returning soldiers and booming families — also shortened the amount of time a listing would sit on the market.
The result of these changes is that open houses themselves got shorter in the 1950s and began to more closely resemble the types of events agents hold today.
Heller said open houses were popular attractions during this time. Howard’s Holiday Home is one example, but Heller explained that there are other reports of massive open house turnouts as well. In some cases, they were effectively community events.
“There were a lot of times when you would hear of people coming to an open house in the hundreds or the thousands,” Heller added.
Individual agents and companies continued to innovate over the years, of course, but ultimately by the end of the 1950s the open house had essentially evolved into its modern form.
“Not too much has really changed about open houses from the 50s until pretty recently,” Heller added.
The modern era
Though open houses today fundamentally resemble their 1950s counterparts, there have been some notable evolutions in recent years.
Marketing, for example, has shifted online and platforms like Nextdoor and Facebook are regularly used to connect with consumers. New technologies such as digital sign in services and virtual staging are also changing the way consumers interact with an open house.
Inman will dive into the technologies that are changing open houses in a future installment of this series, so suffice it to say here that the open house is among many aspects of the real estate industry experiencing some disruption at the moment.
However despite changes, open houses are still common. Though buyers don’t universally use them, Heller said that the percentage who do has actually ticked upward slightly over the last several years. He said that uptick is most pronounced among younger and Millennial buyers.
“Current younger home buyers are finding the method to be useful,” he added.
Still, Heller speculated that open houses could in the future see some decline. He acknowledged that concerns about safety and security only appear to be growing, while at the same time agents are increasingly taking measures to ensure that their buyers are the kind of people they’d be willing to work with.
“Even just to do a showing, a lot of real estate professionals will do a background check on the prospective buyer,” Heller explained. “And you can’t really do that for open houses.”
The result is that some people are growing increasingly skeptical of open houses. And that means the golden age of the open house that has run for more than half a century could in the not-too-distant future be on its way out.
“They are useful,” Heller said. “But at the same time I think that maybe open houses will start to dwindle.”
Tomorrow: A Realtor’s lament.