Op-ed – The More Things Change, the More They Stay the Same

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By Richard Gaylord

Last month, during the National Association of Realtors® Midyear Legislative Meetings, NAR officially marked its 100-year anniversary. As Realtors® from around the country met to discuss the association’s public policy agenda in the context of today’s real estate market, we had a chance to reflect on just how much progress has been made over the past century. In the process, we were all the more invigorated in our commitment to meet the challenges ahead.

In fact, our role is now more important than ever. After several years of record sales and home-price appreciation, recent market adjustments combined with problems in the mortgage industry, as well as negative coverage in the national media have shaken consumer confidence in the value of homeownership.

NAR has addressed the issue head-on, aggressively advocating for FHA reform that will give a safe, affordable financing alternative to more first-time, low- and moderate-income, and minority home buyers. We’ve also pressed for increases to current conforming loan limits that will result in more than 300,000 additional home sales and strengthen current home prices by 2-3%.

But that’s not all. Educating consumers about the long-term financial and social value of homeownership is also a priority. According to data from the Federal Reserve Board, a homeowner’s net worth is 46 times that of a renter’s. Over the past 30 years, the national median existing-home price has risen an average of more than 6% per year.

On the social side, studies show that homeowners are more likely to vote and volunteer time for political and charitable causes than renters, and they do not move as frequently. Homeowners are engaged in their communities, which in turn helps prevent crime, improve childhood education and support neighborhood upkeep.
In today’s environment, it’s essential that consumers not be swayed by doom-and-gloom reports. It might be easier if they knew that negative news about the housing market was nothing new, and certainly not an accurate predictor of future developments.

One of our Realtor members, Terry Forsberg from Scottsdale, Arizona, recently sent me some interesting excerpts from historical media reports about the housing market, all of them consistently incorrect in predicting long-term declines in housing values. Here are some examples:

“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.”
- Time Magazine, 1947

“The median price of a home today is approaching $50,000…Housing experts predict price rises in the future won’t be that great.”
- Nations Business, 1977

“Financial planners agree that houses will continue to be a poor investment.”
- Kiplinger’s Personal Financial magazine, 1993

“…a home is where the bad investment is.”
- San Francisco Examiner, 1996

From these examples, it seems that where the national media is concerned, the more things change, the more they stay the same.

As NAR embarks on its next 100 years, consumers-whether they’re home buyers, sellers, renters, or investors-can rest assured that Realtors will be doing their part to protect the American dream and ensure that the real estate industry remain a vital, vibrant part of the nation’s economy, today and into the future. RE

Richard Gaylord is the 2008 President of the National Association of Realtors®.