Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

President’s Corner Fear for your real estate future

Print
Font Size:
Default font size
Larger font size

Kerry Suess

Posted: Friday, October 21, 2011 7:09 am | Updated: 7:11 am, Fri Oct 21, 2011.

Neal Lipschultz recently wrote an article titled “We Can’t Ignore Housing Anymore.” The story ran in the Wall Street Journal, Real Time Economics Blog.

Neal said that “In the end, we can’t dodge housing.” The U.S. recession and financial crisis of the last decade began with housing and the scourge of subprime mortgages, which were so messily dispensed. It spread to Europe and its banks.

For a few years we tried to work around the paralyzed housing sector – the drip, drip of steadily lower home prices, the unresolved status of the wounded Fannie Mae and Freddie Mac — and it seemed to be working. With the help of a super-easy Federal Reserve, fiscal stimulus and much else an admittedly weakish recovery took hold.

Now that worries mount about an ever more likely return to recession amid a significant equities markets decline, we are hearing again about housing. There’s the foreclosure mess, the underwater mortgage mess, the tight mortgage lending standards and all the rest.

There’s displaced construction workers. There’s consumers unwilling to spend as their perceived real estate wealth evaporates. There’s housing, traditionally the leader out of recession, still generally in decline, and harder to ignore.

Just this month, two well-known commentators on the U.S. economic scene weighed in on housing, and it wasn’t encouraging. Warren Buffett, chairman of Berkshire Hathaway Inc., was generally upbeat about the economy. He cited record carloads at the company’s railroad, Burlington Northern, and same-store sales increases at Berkshire’s retail outlets. But he was downbeat on housing. The company’s housing units are “as bad as they’ve ever been during this period.” The usually sunny Buffett said he likely would have to amend his view that housing would recover by year-end.

On Capitol Hill, Fed Chairman Ben Bernanke talked about housing as he urged Congress and the administration to in effect join the Fed in attempting to spur the economy. He said Congress should develop a “future path” for housing, Dow Jones reported. Given political realities, it’s hard to imagine much of a fiscal push, in housing or elsewhere. But there are reasonable proposals offered from many corners that don’t spell stimulus in capital letters but would do some good.

As has been widely pointed out, the “Operation Twist’ effort by the Fed to drop long-term interest rates even below their historically meager levels won’t do much for housing if too many people won’t qualify for mortgages or can’t refinance because the value of their home has declined or they don’t have much equity. That has to change. By regulation, where possible, more people who are current on their mortgage payments have to be able to refinance their mortgages to take advantage of rates near 4%. That savings for many would go into additional spending, a stimulating measure, and would boost their economic psychology, which is important. Even if they used the savings to pay down their own debt it would do long-term good.

Someone also has to take a hard look at standards for initial mortgage qualification. Obviously, things became absurdly easy as the housing bubble inflated. But pendulums swing too far and experts should determine if there’s a middle ground that would allow more to qualify without excessive risk to lenders. It’s time to stop trying to work around housing, and take it on. I would prefer to see the ‘Occupy Wall Street” protesters at the foot of the White House and other State Capitols encouraging our officials to make beneficial changes to laws and regulations that might actually assist the 99 percent. Just my .02 cents.

By the time you read this the Lodi Association of Realtors will have celebrated their 90th Anniversary at Wine & Roses last night. We also, hopefully pulled off a surprise retirement party for our Association Executive of 38 years, MarJo Rivinius. LAR has seen many changes over the years and has been blessed to have the guiding hand of MarJo for many of them. As the 2011 President and a member of LAR since 1983 I have been a recipient of her help more times than I can count.

MarJo has helped the Association and the nearly 2,000 members become a strong and respected leader in the real estate industry locally and statewide. LAR has also become a major contributor, with her help and that of its members, by donating and being involved in numerous community charities throughout the valley. If you are one of the many thousands of people who have been influenced by MarJo over the years wish her the best and many healthy happy years to her and her family. Thank you MarJo. We all love you.

Questions or comments can be made to Kerry Suess at larpres2011@yahoo.com.

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.

Loan Calculator

Your News

News for the community, by the community.

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists