Realtors Upbeat About Housing Industry
STEVE INSKEEP, host:
You know, you might think that a gathering of thousands of realtors would feel like a wake, but the National Association of Realtors Conference here this week in Washington, D.C. is striking a surprisingly upbeat tone. NPR's Yuki Noguchi spoke with some of the realtors and explains why.
YUKI NOGUCHI: The saying goes that all real estate is local, but this year it seems to be all about Washington.
Mr. JOHN MIKE (Realtor): I've had four calls while we're talking here. People want to know what's happening up here because they know this is important. This is important for their livelihoods.
NOGUCHI: That's Florida Realtor John Mike. He says Washington has become the de facto center for the industry. This, after all, is where policymakers make choices about bank bailouts, foreclosure prevention and, as of yesterday, a change in the $8,000 first-time homebuyer tax credit that Mike says will bring more homebuyers to the table.
Mr. MIKE: What the Obama administration is doing, which I regard as positive -but I'm a Republican - is bringing a problem-solving mode to the problem, and I appreciate that.
NOGUCHI: Mike, who works in one of the country's most battered real estate markets - Palm Beach, Florida - says this announcement from Housing and Urban Development Secretary Shaun Donavan gave him new hope.
Secretary SHAUN DONOVAN (Department of Housing and Urban Development): We want to enable FHA consumers to access the tax credit funds when they close on their home loans so that that cash can be used as a down payment.
Mr. JOHN SEBREE (Vice President of Public Policy, Florida Association of Realtors): A lot of times, the biggest hurdle people have to getting a home is the down payment.
NOGUCHI: John Sebree is vice president of public policy for the Florida Association of Realtors. Sebree says the tax credit will have a stimulating affect on the economy.
Mr. SEBREE: As soon as we have first-time homebuyers buying those homes that are on the market, that frees up the current owner to buy the next house that they'd like to have. And once someone buys a house, there's an incredible multiplier effect.
NOGUCHI: A multiplier effect on spending, that is. People go out and buy couches, dishwashers, refrigerators, and that might jumpstart the economy. But realtors, by their own admission, are an optimistic bunch, and not all the keynote speakers were universally upbeat.
Former Federal Reserve Chairman Alan Greenspan drew an audience of well over a thousand people, and issued a sober warning against too much enthusiasm.
Mr. ALAN GREENSPAN (Former Chairman, Federal Reserve): We're now beginning to see and getting concerned about, rightfully, the issue of conforming conventional mortgages also beginning to show up as problems.
NOGUCHI: He said it's possible there will be a massive sale of cheap homes, creating a new floor for a recovery in housing. But, he warned, that might not come to pass. And if housing prices continue to fall by 5 percent or more, that could trigger still more foreclosures in the healthier part of the market.
Indeed, numbers released by the National Association of Realtors yesterday were not particularly promising. Home prices fell in 88 percent of the top 152 major metropolitan markets, largely as a result of fire sale prices on homes that were in foreclosures or close to it.
Mr. GREENSPAN: This to me is the critical Achilles' heel in the economy, which is otherwise running extraordinarily well in recent weeks.
NOGUCHI: And then there are still problems in the commercial real estate business. Robert Goldstein is president of a commercial real estate firm in Boca Raton, Florida. His firm recently had a deal to sell a warehouse in bankruptcy, but that deal fell through because, he says, bank lending, while warming up for the residential market, is still shut down for commercial properties.
Mr. ROBERT GOLDSTEIN (President of Commercial Real Estate Firm): Now the property's going to go into foreclosure. And when it does, it'll sell at probably 25, 30 percent under what the mortgage is, where we had a sale at 35 percent over the mortgage.
NOGUCHI: Getting federal funds to work for Main Street businesses, Goldstein says, is what he hopes Washington will tackle next.
Yuki Noguchi, NPR News, Washington.