RISMEDIA, Oct. 28, 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, Michael Levitin, 2008 Chairman of the Houston Association of Realtors in Houston, Texas offers his thoughts about the bailout, what it means to consumers and the government’s new role in real estate.
RISMedia: What is your overall reaction to the bailout?
ML: The jury is still out on if this bailout will work. It’s nice to see the government involved to try and bolster a little consumer confidence and encourage people. However, I’m definitely taking a wait-and-see attitude.
Politics aside, this is a huge issue. We need bipartisanship-let’s talk about our problems. We can all learn from people with opposite views.
RISMedia: What will it take to get consumers back to buying and selling?
ML: People are going to have to feel that the country has optimism and a solution. The last eight years have been rough. To get consumers back to real estate, change has to happen and there has to be a plan for that.
RISMedia: What is happening in your market locally and how is the national discussion about real estate affecting that? What should the industry be doing to bolster consumer confidence?
ML: Here in Houston, for example, the average sales price is actually up. However, sales are down 15-17 percent-and we have a good job economy. But the problem is that everyone keeps talking about real estate being local. We always say that. But, there’s no way that Houstonians aren’t listening to what’s going on nationally. It’s still a problem and it’s still affecting us.
HAR does a wonderful job of getting people-including me-out in the media. We, as a group, try to tout Houston and all the great things about the local market. We’ve gotten that message across. However, it’s just not working anymore. This is national and people recognize that. When the stock market is tanking and there’s word of a bailout, it’s not local anymore.
RISMedia: What are your thoughts on 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?
ML: A few months ago I would have said let the banks solve it themselves. The problem now is so deep that someone’s going to have to step in and get the situation organized to a better extent than the way it is right now.
At some point in time, banks need to decide: do they need to keep people in homes at a lesser rate or go into foreclosure. There are some situations where banks should work with homeowners.
Everything starts with buying and selling a home. Having people lose their homes who shouldn’t, someone needs to get involved-that might just be government.
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