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Market News and Trends, The Business of Real Estate

Real estate boosts the economy


I have commented many times on the fact that without a strong real estate recovery, any recovery of the rest of the U.S. economy would be weaker.  It’s certainly not all sunshine yet, but things are looking up:

Steady US housing recovery is boosting the economy

US Property Market Continues Recovery

Builder Confidence Hits Highest Point since 2006

Maintaining this positive direction is important for all of us.  With that in mind, I recently posted an Open Letter from RE/MAX Chairman Dave Liniger that included several steps that are needed now.  I’ll highlight two:

  • Extend the Mortgage Forgiveness Debt Relief Act, now scheduled to expire at the end of 2012.  Without this, loan modifications and short sales will not be viable alternatives to foreclosure for many Americans.  In fact, foreclosure could become the preferred option for many, if the alternative is a short sale followed by income tax liability for the amount of the forgiven mortgage debt.  Not only would this reduce home sales, but the “shadow inventory” of foreclosed or soon-to-be-foreclosed properties would continue as a drag on long-term recovery of the real estate sector.
  • Loosen unnecessarily stringent mortgage lending rules.  Nobody that I know advocates a return to the lending standards that led to the housing downturn five years ago, but it is a fact that many quite acceptable loan applicants are being declined today because of government regulation that pushed the pendulum too far the other direction.  Mr. Liniger’s letter pointed out that “In August, the average FICO score of a rejected mortgage application at Fannie and Freddie was 734 ….  And the average down payment of a rejected applicant was 19%.”  Thoughtful extension of credit to deserving borrowers could accelerate the housing recovery and bolster the overall economic recovery.

We are getting more and better news about real estate these days, but home sales are still far below their pre-recession levels, many major cities still have unthinkable inventories of vacant homes, and for all their renewed confidence, builders are nowhere near the pace of a few years ago.

It’s great to be in Austin, Texas, where the housing downturn was much milder than elsewhere and where the recovery began almost 1 1/2 years ago.  But our continued strength, and the strength of the U.S. economy, depend on a much broader real estate sector.  Help to advocate these changes now — talk to friends and business acquaintances, and most importantly contact your representatives in Congress.  These changes are needed this year!

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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.

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