You're reading...
The Business of Real Estate

Is Housing Important, or not?


Sometimes the only immediate response to the news is, “AARRGGGHHHHHH!”

Here’s an interesting pair of articles published by RISMedia:

Owning a Home Essential to the American Dream, Survey Says

From that piece:  “An overwhelming 75 percent of the people who were polled said that owning a home is worth the risk of the fluctuations in the market, and 95 percent of the home owners said they are happy with their decision to own a home,” [NAHB Chairman Bob] Nielsen says.

Against that backdrop, consider:

Homeownership Under Attack?

Those surveyed for the first article consider homeownership and a retirement savings account to be their best investments, and 80% would recommend to a close friend or family member just starting out to buy a home.  So why all the rules and regulation that make that more and more difficult?

“Well, we can’t let that happen again,” goes the usual argument, referring to the mortgage meltdown and housing crash.  But too much of the legislation and rule-making over the past couple of years are a vast overreaction, mostly by people who don’t know the mortgage or real estate businesses.

  • Did mortgage loans to poorly qualified borrowers with little or no skin in the game lead to the crash?  Absolutely, but analysts conclude that there is no statistical difference in the risk of default for a 3.5%-down FHA borrower and a 20%-down conventional borrower, so why push the industry toward high down payment loans? 
  • Did Fannie and Freddie get out of control?  Certainly, but there is a valuable place for a secondary marketplace for mortgage loans.  If the risk profile of a basket of loans is accurately disclosed, the private market will take up that function.
  • Did “securitization” of mortgage instruments lead to a “Wild West” mentality among subprime lenders?  Sure, at least for some of the larger players.  It was an out of control secondary market that allowed those loan originators to decouple risk from reward.  Why wouldn’t they keep making risky loans when all the downside was somebody else’s?

I am not advocating a political position here, and I acknowledge that some new regulation probably was needed.  But what’s going on now is horribly misguided, and it is holding back housing — the sector of the economy that is key to the rest of the recovery, and the most predictable source of wealth accumulation for most Americans.

Go ahead.  Scream.  You’ll feel better!  Then give me a call and let’s talk about your path to homeownership.

Advertisements

About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: