Wow. The election is over, and none too soon for me—though I will miss some of the more colorful commercials. Some of the candidates seemed to appear out of Hollywood’s central casting. The dialogue in these commercials mirrored a soap opera script with references to a witch, a bitch and the rich. Little was focused on how to get this economy up and running, jobs back or tax relief.
Pardon my logic, but where were all of our leaders during the four months prior to the election? Were any of our elected officials doing official business like creating jobs, focusing on tax relief or just legislating? And since this has proved to be the costliest election of all times, wouldn’t it have made better sense to use some of the money to fund the very shortfalls they were campaigning for? What is more important, funding an ad that disgraces an opponent or providing food, shelter or a job to a constituent? We have a long way to go to address the real issues.
Now I will see if I can tie all of this to the subject at hand, NAR and FAR. I just returned from NAR, The National Association of Realtor’s annual convention in New Orleans. This year was particularly interesting for a host of reasons, least of which were predictions on the future of our industry and a time span for the eventual rebound. Economists huddled over crystal balls and consulted Ouija boards backstage prior to forecasting our future. Who knows? Maybe dead spirits will give us a better prediction. Financial institutions charmed registrants with gifts and drawings to bolster support and confidence in the services they provide. Sadly, there were fewer exhibitors showcasing services and products as in recent past conferences. This parallels the economy. There were fewer workers in the exhibition hall as there are fewer workers in the communities where we all practice real estate.
Education focused on REOs, (real estate owned) foreclosures and short sales. It was as if there was a cloud of uncertainty hovering over the convention. High-tech devices were abundant, but high touch and getting back to basics were the themes of the day.
“Realtors are the first line of defense for homeowners who don’t understand what is happening and know even less how to interpret the madness,” exclaimed the speaker. We are charged with understanding, explaining and being there to help homeowners sort things out so they can make the right choices regarding their housing situations.
The large mortgage companies—the same ones who were giving out favors (iPads and such)—were not offering answers or apologies. In the 26 years I have been in the real estate business, I have seen rates go up and down. The difference in today’s market is that banks aren’t lending money. Lenders are focusing more on improving their financial position. This will please stockholders using TARP money. But, really, can this be happening? They use our tax dollars and don’t lend to us?
The convention didn’t offer solutions to the real estate economy but did give insightful advice.
Be in touch with homeowners and counsel them on their housing situation. People are afraid. They are losing their homes, jobs and savings, and there’s no end in sight.
NAR is working closely with the federal government and mortgage bankers association to try to get relief for homeowners.
NAR is endorsing an extension on tax cuts to offer relief to small businesses. This is another way to stimulate growth and spending.
NAR is working to get more programs available to assist those in housing distress. These programs are needed to bring relief in the coming months.
But the convention was not all about doom and gloom. It offered a reality check, a reminder of what got us into this mess and what it will take to climb out of this deep hole.
I am very optimistic about the New Year. Mortgage money must become more available. New building starts will increase. Existing homes will become more available as sellers and banks become more realistic. Are we talking near or FAR for recovery?
The FAR represents the time period in which Congress will act to stimulate the economy. Above I spoke of recovery, good news on the horizon and growth in the housing market. This will all happen because of the private sector, the National Association of Realtors, Mortgage Bankers Association and the homebuilders association are working to get product built, existing homes sold and monies available to purchase said properties. That’s just the start.
In order to ensure success, Congress must make significant changes. And there’s the rub. Congress reconvened a week after a mudslinging election of monumental proportions. Its first rule of order was to elect its leaders. As one economist stated, “The real challenge is to find a leader. It will be a stare down between the two sides with the first to blink exposing their weakness.”
Great. Here we go again. It is unlikely Congress will spend the last session of the year working toward resolving the housing crisis or any other. This will put the recovery efforts out FAR.
Another quote came from my good friend John Tuccillo, former chief economist of NAR, when asked when we could see a real estate market that is stable with growth in the future. “You’re guess is as good as mine,” he replied. “We are in for two to three more years of foreclosures and short sales being the dominant portion of the market. Banking reform, along with states suing mortgage companies, title companies not issuing policies for selected banks, and builders having trouble securing financing to build on approved lots, is a force that has created a perfect storm” in the housing sector. Where is the good news?
Housing makes up a good portion of the gross domestic product. Housing has been the main factor to bring us out of the last six recessions. Housing creates jobs. Housing stimulates ancillary businesses. Housing represents growth. Housing represents stability. Housing is shelter. Lastly, housing provides a tax deduction.
But wait—there is talk of eliminating the tax deduction on primary residences. How much talk? A lot of talk is happening inside the Beltway, according to Tuccillo. “On a scale from one to 10, we are now at a three for the deduction to be eliminated.”
Get on the phone folks and call your representative to STOP THE MADNESS! If ever there was a time to put pressure on your elected official to act, it is now. Contact them and tell them to get the money moving, to ensure mortgage lenders are providing clear title, and to help distressed homeowners keep their homes and don’t mess with the Zohan (mortgage tax reduction). Work for us, or risk losing your job at the next election.
Impress upon them that their charge is to serve the people—not themselves or party. We need their help. Housing is the answer to jump-starting the economy…It has always been the right direction.