Steve Brown, incoming National Association of REALTORS® president, was a guest speaker at the 2013 Kansas Association of REALTORS® Midyear Conference in Junction City, and provided an overview of the current status of real estate on a national scale. Brown is a REALTOR® with over 35 years of experience from Dayton, Ohio.
Brown briefly reported on several topics, ranging from updates on the Federal Housing Administration (FHA), to Government Sponsored Enterprises (GSE) to regulatory and political issues.
Brown began his speech by commending Kansas for “setting the bar for many other states” when it came to the mortgage interest deduction battle. He said that no state had presented a strategic plan like Kansas, and Kansas did it right. He also thanked KAR on behalf of NAR and the North Carolina Association of REALTORS®, which is adopting the Kansas model. He said that efforts made by Kansas are helping to educate other states such as Louisiana and Minnesota also, as they battle the MID issue.
Pertaining to FHA, he stated that a top priority for REALTORS® is ensuring qualified homebuyers have access to affordable mortgage loans backed by the Federal Housing Administration. NAR feels that without FHA, the housing recovery would not have occurred. NAR is focusing on maintaining a 3.5 percent down payment to obtain an FHA loan. If it were raised to five percent, there would potentially be 300,000 home sales lost nationally.
Addressing issues related to the GSEs, Fannie Mae and Freddie Mac, Brown shared that both entities currently account for seventy-five percent of all mortgages. The government took control of these two GSEs during the financial collapse in 2008. Both have paid back the government more than fifty percent of government loan money to remain solvent. He explained that although the GSEs are a viable entity, changes are necessary to improve them. It is NAR’s belief that GSEs need to stay in place, as they play a vital role in our market and national economy.
Brown said that the fiscal cliff “feels as if it were eons ago, but it was only six months ago.” He said as the nation watched the fiscal cliff negotiation taking place, the NAR lobbyists were “in the mix, at the table, working until the wee hours of the morning in negotiation.” Congress is also currently considering proposals to reform the federal tax code, but the good news is that there is not yet a concrete proposal in place.
Brown stressed that the REALTORS® must stay engaged if they are to protect homeownership and real estate investment for the next generation. “Never let it be said that we just represent our industry. We also represent the homeowners.”
Brown cited that homeownership or real estate investment today accounts for fifteen percent of the national gross domestic product. That is a two trillion dollar business.
”Outside of healthcare, real estate is the second largest contributor to the U.S. economy. That is how important your work is.” Brown said. “That is a tremendous responsibility that we carry for our industry to do our job professionally and correctly.”
“Fast Facts” Regarding The State Of Real Estate As Of May 2013
- Forty-five percent of all homes on the market in May = On market less than one month
- First–time homebuyers = 28% of the homebuyers in May—typically is around 41% at any given time. (Inferred that this has decreased with recent college graduates having student loan debt. Was at 34% in 2012.)
- National Inventory of Homes = 5.1 months (dropped 10% below 1 year ago at 6.5 months)
- National Median Home Price = $208,000 (Up over 15.4% May 2012, which is significant)
- Purchaser traffic = Up 29% over same time in 2012
- Median of 41 days on market compared to 46 in April (moving a little more due to summer months)
- Short Sales = 12% below market value, spending a median of 79 days on the market
- Foreclosures = 15% below market price, on the market only 43 days
- Non-Distressed Homes = Median of 39 days on market
- Projected that 5.18 million units sold in May versus 4.97 million projected in April. This takes us back to pre-recessionary days. Things are getting better!
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