“The best way to predict the future is to create it.” – Peter F. Drucker: Was a political economist and author
CELEBRATING AMERICA’S HISTORY OF HOME OWNERSHIP
The ability to buy, sell and own property has defined our nation throughout its history, and as the U.S. prepares to celebrate its 235 birthday, Americans continue to reaffirm their support of and aspirations toward home ownership.
“For over 100 years, REALTORS® have helped bring families home,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “There’s a reason why home ownership is called the American Dream – it’s part of our collective history and an essential part of building our nation’s future, as well.”
Numerous studies have shown the value Americans place in home ownership. According to the 2010 NAR Profile of Home Buyers and Sellers, first-time buyers most often cite the desire to own a home as the primary reason for their recent home purchase. Eighty-five percent of all recent home buyers consider a home purchase a solid investment, and 76 percent of them believe owning a home is as good as or better than an investment in stocks.
Earlier this week, a New York Times/CBS News poll reported that nearly nine in 10 Americans say home ownership is an important part of the American Dream. In a recent National Association of Home Builders survey , 73 percent of respondents said they believe the federal government should provide tax incentives to promote home ownership.
“Owning a home has long-standing government support in this country,” said Phipps. “Historically, lawmakers have understood the value of homeownership in fostering communities, creating social stability, and building wealth over the long term. In fact, Franklin Delano Roosevelt said, ‘A nation of home owners is unconquerable.’
“The mortgage interest deduction was introduced as part of the federal tax code nearly a century ago, and the Federal Housing Administration, Federal Home Loan Banks, and Fannie Mae were all created during the worst economic crisis our country ever faced in the Great Depression.”
Studies also demonstrate tangible social benefits to home ownership. The NAR report, Social Benefits of Homeownership and Stable Housing, showed that home owners are more active in their communities, benefit from improved education opportunities, and report higher levels of self-esteem and happiness when compared to renters. The U.S. Census Bureau.
reports that owners do not move as frequently as renters, providing more neighborhood stability. In turn, involvement in community quality-of-life issues helps prevent crime, improve childhood education and support neighborhood upkeep.
“As families across the country gather this weekend to celebrate our nation’s birthday,
REALTORS® will continue to work to insure that this and future generations have the opportunity to pursue their dreams of owning a home,” said Phipps.
TOP 5 REAL ESTATE HEADLINES IN THE 1ST HALF OF 2011
We have reached the midway point of the year. Today, we want to look back over the first six months and give you what we believe were the five items that have had the biggest impact on the real estate industry so far this year.
The Government Wants Out of the Mortgage Business
From the original outline of the Dodd-Frank regulations to the talk of closing Fannie Mae and Freddie Mac to the proposed Quality Residential Mortgage (QRM) guidelines, the government has made it very clear that they want to dramatically limit their involvement in the mortgage industry. What will come of this? Will private industry step up and fill the void created? What will be the increased cost to the consumer? Only time will tell.
Despite Early Headlines, Sales are Increasing
Headlines earlier in the year announced the total collapse of the housing market. To those in the know, it was obvious that comparing sales numbers in the first four months of this year to the same period last year made absolutely no sense. The largest tax credit ever given to home buyers expired on April 30, 2010. Large numbers of transactions were dragged forward last year so buyers could take advantage of the credit. Pending home sales (transactions going into contract) on the other hand have done quite nicely and many institutions (ex. Fannie Mae, Freddie Mac, NAR and Moody’s Analytics) are projecting good sales numbers throughout the rest of the year.
Amid Warnings of a ‘Double-Dip’, Prices Began to Stabilize
Prices continued to retreat for the first few months of the year and brought the bears out. Some called for another major fall in prices (15-20%) and almost all recalculated their projections to show continued depreciation. Just as these new projections were made available, some pricing indices announced that values actually increased (though by a rather minimal percentage). Again, those with the best understanding of the market were quick to explain…
Foreclosures Were Delayed Longer Than Originally Projected
Distressed properties (foreclosures and short sales) have a major impact on the values of all properties in an area. Because of paperwork challenges, the flow of these properties to the market was virtually shut off. At the beginning of the year, most experts believed the banks would correct these challenges by the end of the first quarter. That didn’t happen and therefore many of these properties were delayed coming to the market. This is a major reason why prices seemed to recover: there were fewer discounted properties available for sale. Most now believe that the banks are within 60-90 days of releasing this inventory and that prices will again begin to soften.
Main Stream Media Begins to Announce “Now Is the Time to Buy!”
With prices and interest rates at historic lows and the chance that mortgages will become more costly as the private sector steps in, many in the main stream media are announcing that buying a home now makes sense. In the last 45 days, the Wall Street Journal, Forbes Magazine, National Public Radio (NPR) and CBS Money Watch have all ran articles calling for the readership to consider buying now!
BANKS FACE FORECLOSURE PRACTICE DEADLINE
The Office of the Comptroller of the Currency has given all banks until Sept. 30 to conduct a self-assessment of its foreclosure practices.
The “self-assessment” request first came in consent orders given to 14 of the nation’s largest banks in April over a settlement into questionable foreclosure practices that had surfaced last fall. The consent orders called for mortgage servicers to hire a third party to review its foreclosure files to determine if home owners were harmed directly from any errors, sloppy, or incomplete paperwork.
The mortgage servicers include banking giants Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, among others. But the OCC now says that any bank that falls under its supervision, even those that did not sign the consent orders, must complete the self-assessment by Sept. 30, too.
“Banks that identify weaknesses in their foreclosure processes through the self-assessment should take immediate corrective action,” the OCC said. “Banks should determine if the weaknesses resulted in any financial harm to borrowers and provide remediation where appropriate.” The OCC says it will review the self-assessments and the corrective actions taken, as well as also make any determinations of financial harm to home owners.