Five PM Eastern Standard Time, January 1, 2009: Here in Rhode Island we are watching the tail of another major snow storm. We usually get a few inches.
There must be six or seven inches on the ground. The snow is really welcome tonight as 2008 has been a very challenging year. It hides the coldness of winter with an indiscriminate, universal blanket. It is a fitting end for a trying year. It is time to say goodbye to 2008.
So what are we looking forward to in 2009? I predict there will be the good, the not so bad, and the ugly.
For the good, we have a new leadership team taking over in Washington led by President Barack Obama. We have a new commitment by the government to address the national economy and specifically housing. As an association, we are continuing to make major investments through our Second Century Initiatives. Among them is the Realtors® Federal Credit Union which has been chartered and which will be open and serving members by mid-2009.
And also due to NAR’s strong lobbying efforts, mortgage interest rates, “for credit worthy customers,” are at 50-year historical lows. Because of this, home sales should rebound to a respectable 5.2 million in 2009, which is above the 20-year historical average.
For the not so bad, we made it through 2008. In addition, several markets continue to show strength in the number of sales.
Prices are down, which increases affordability. The number of short sales and foreclosures has drawn bargain shoppers and investors into the market. Moreover, they are making purchases. This should continue in 2009.
Now, for the ugly, we have increasing unemployment, more foreclosures, and greater difficulty obtaining mortgage financing. It is important to understand that all of these problems are related. Most buyers do not have 20 percent or 720+ credit scores. Thus many credit-worthy people cannot obtain financing, which means, they do not buy houses. If they could, there would be fewer foreclosures. Finally, as the housing industry contracts, more people become unemployed.
As an association, your leadership is committed to doing everything we can to stabilize housing prices, free up mortgage money, and help minimize foreclosures. This will help unemployment.
John F Kennedy said, “Ask not what your country can do for you; ask what you can do for your country.” This question applies to today, maybe even more urgently. We need to do our part for our country. As Realtors® our part is housing. We need to get the financial system working and unclogged so buyers can get back into the market. We all have a role to play, so your first step can be making the New Year’s Resolution: I will respond to each and every Realtor® Call-For-Action.
United together, we can make this country a better place. Celebrate 2009. — Ron Phipps, NAR 2009 First Vice President