That was the message delivered at our California Association of Realtors Mid-year Legislative meetings as well as our National Association of Realtors Legislative Conference held last month. The focus is shifting from looking over our shoulder at ‘how we got here’ to looking forward to ‘where we go from here’. There is an undercurrent of cautious optimism about the housing market borne out by strong sales results in our local market and in a growing number of markets across the country.
In weeklong conferences with legislative and regulatory leaders in Sacramento and Washington DC, Realtors stressed the critical role of homeownership as a lynchpin in the economic recovery of this country. At a May 17th Rally where nearly 14,000 Realtors gathered at the Washington Monument, we reminded them that in 6 of the past 8 recessions, the recovery has been lead by an emergent housing market. The other 2 were lifted out by massive war spending, so unless they want to start another war they should probably focus on housing at this juncture. Homeownership matters!
We talked with lenders about their foreclosure efforts, about streamlining the shortsale process, about helping homeowners who were honest victims of their housing manipulations and about getting back into the lending business by sharing some of the bail-out money we lavished on them.
We discussed the importance of mortgage availability and secondary market liquidity with leaders from Freddie Mac, Fannie Mae and the FHA. In both Sacramento and DC we demonstrated the critical lack of housing inventory in California and cautioned against the widespread implementation of the poorly conceived FHFA Bulk Sale Program (detailed here last month).
Three years ago we were treated to a discussion of the ’emerging green shoots’ by former FED Chair Allan Greenspan, shoots that were subsequently scorched by over-reaching and reactionary regulatory policies. The opportunity still exists for the current optimism to be quashed by knee-jerk decisions, lack of action in some arenas – over-reaction in others.
Elimination of the homeowners mortgage interest deduction is one example. Not extending deficiency judgment protection for underwater homeowners, not renewing the national flood insurance program and wholesale dismantling of Fannie & Freddie are still more examples of misguided efforts on the part of legislators and regulators who 1) don’t understand housing and job creation, and 2) have not considered the unintended consequences of their actions.
The events that brought us here are behind us. Most of the perpetrators will never suffer the consequences of their actions and, in fact, continue to prosper under the current regulatory regime. Time to move on. We endured a near perfect storm of events that brought us to the brink of fiscal disaster as a nation but we are entering a brief window of opportunity right now to keep the nascent recovery moving. The fits and starts of the past 4 years notwithstanding, we have an opportunity to move the housing market forward and with it our national economy.
Being an election year, we are probably assured that no really good or bad bills will emanate from Congress before November (Sacramento may still deliver up a few clinkers). Similarly, the lame-ducks in Sacramento and DC will accomplish little before the new year. Whether or not the recovery proceeds and strengthens will depend on the decisions you make in November. If you are a homeowner or aspire to home ownership, and especially if you consider homeownership to be a legacy you want for your children, please make an informed decision when you vote this fall. So much depends on it.