It’s true, things remain tight in the real estate market. It seems as though every time we think there’s a reasonable chance for expansion, more bad news comes. Just today, the Washington Post reported that May new home sales fell 33%. In similar fashion, REALTOR Mag reported mortgage applications declined 1.2% on an adjusted basis and 2.3% unadjusted compared to last week. Year over year, applications are down 36.8% according to the publication.
As we all know, the May numbers were significantly impacted by the expiration of the federal tax credit April 30th, 2010. Many fear that the market, now independent of the superficial stimulus, is beginning to show fissures in what was viewed to be a recovering facade. Lenders continue to show significant risk aversion; Fannie Mae recently rolled out their Loan Quality Initiative (LQI) which forces potential homebuyers to qualify for their mortgage based on “refreshed” credit profiles. The alternative? Have your closing canceled and in some cases, deposits are not refunded; for details regarding the initiative, visit Inman. Meanwhile, economists and government agencies argue over our taking an expansionary or contractionary posture.
It’s easy to feel detached. However, as real estate professionals, each of us plays an important role and each of us makes a difference. This is not “a market” that’s in trouble. It’s our market. We participate in it daily – and I know each of us feel the pressures. From a macro view, private investment always leads economies out of turbulent waters – lead by those who refuse to allow the bear to get them down. From a micro view, I would suggest that it’s time that we redouble our efforts and redouble our investment in our market. Take heart, take hold, and let’s pull together to set our market on a firm foundation.
Now is a chance for each of us to set the tone. We’re all ambassadors for the real estate industry and it’s future is in our hands. It can feel like we’re living in the worst of times, but for that reason, these are the best of times. We can do something, and we will.
Thoughts on the current state of affairs? Share!