RISMEDIA, Oct. 24, 2008-The Emergency Economic Stabilization Act of 2008, also known as ‘the bailout bill’ that has been dominating headlines in recent weeks, has real estate leaders talking about its impact on the industry, real estate markets around the country and the overall effect on consumer confidence when it comes to buying and selling.
RISMedia recently interviewed several industry experts on the subject and is presenting their comments in a regularly occurring series called, “The Bailout-Looking Ahead.” Here, Gino Blefari, Founder, President & CEO of Intero Real Estate in Cupertino, California, offers his thoughts about the bailout, what it means to consumers and the government’s new role in real estate.
RISMedia: Was the bailout necessary and do you support it?
Gino Blefari: The bailout was needed. It will allow banks and note holders to get direct liquidity. This is a strategy, though-not a one-trick pony.
RISMedia: What is the bailout’s effect on consumer confidence in the real estate market?
GB: It will take time for consumer confidence to come back to the market. It looks like we’re getting close to bottoming out.
I think something to be cognizant of is that people are now afraid for their jobs. Nothing changes overnight. We have a lot of instability and uncertainty in this country right now. We’ll have to wait and see how the country reacts to the bailout once things start to happen and the election is over.
Inventory is high. Consumers are just not confident in anything.
RISMedia: What do you think is needed to get consumers back to buying and selling?
GB: If job security goes up, job demand will push real estate up as well. When more jobs come in, there are just more transactions. People aren’t buying right now because they want to see what will happen-with the economy, with their jobs, with everything.
We need to look at the prices we’re offering. It needs to be a realistic price or it should be taken off the market. Then there wouldn’t be so much inventory.
RISMedia: Is now a good time to buy?
GB: If you talk to people who bought their homes anywhere between 10-30 years ago, a good number of them will say that they wished they’d bought more. People are still looking for places to put their money-would you really put your money in stock market right now? No, it’s a great time to invest in real estate. There are great buys, prices are down and you can get a lot of great deals from foreclosures.
It’s still the law of supply and demand. Lower the prices and they’ll be a big push. However, we also need to have the best professionals offering the best customer experience. We have to look out for our buyers and sellers. In the boom years, there were some in this industry that said, ‘We’ll sell it-even if they can’t afford it.’ We just need to sell people homes that make sense-that they can afford.
RISMedia: What do you think of the government’s new rights (within the bailout bill) to purchase foreclosed homes and refinance them at their current value so that homeowners can stay in the home?
GB: Given the situation, we have to explore all options. However, private enterprise should try to fix this first. We need to take every available option and see what makes sense.
We already have an FHA rescue program that authorizes government to help homeowners in danger of foreclosure. FHA acts as the mortgage guarantor.
What if the government just brought the interest rate down to 4 percent? Everyone could buy fixed and at 30 years, and title and mortgage would soar.
To learn more about Intero Real Estate, visit http://intero.terabitz.com/.
Stay tuned for a full report and analysis of the bailout bill and how it will affect the real estate industry in our November 2008 cover story in Real Estate magazine!
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