The Power Broker Roundtable is brought to you by the National Association of Realtors® and Jim Imhoff, NAR’s Liaison for Large Residential Firms Relations. Watch for this column each month, where we address broker issues, concerns and milestones.
Jim Imhoff, Chairman/CEO, First Weber Group, Madison, Wis., & Liaison for Large Residential Firms Relations, NAR
Dan Elsea, President, Real Estate One, Southfield, Mich.
Mike Pappas, President/CEO, The Keyes Co., Miami, Fla.
Sheryl Chinowth, CEO/Co-Founder, Chinowth & Cohen REALTORS®, Tulsa, Okla.
Bill Soffel, CEO, ERA Team VP Real Estate, Chautauqua, N.Y.
Jim Imhoff: This past October, the Federal Housing Finance Agency (FHFA) unveiled a plan that would allow Fannie Mae and Freddie Mac to once again back mortgage loans with down payments as low as 3 percent. While critics see it as a step back, the new plan is hailed by brokers—and many lenders—as a step toward getting more qualified purchasers into the market. Dan, what are you telling your agents now in an effort to start the new year off right?
Dan Elsea: I’m telling my agents the good news now is that the market is moving in this direction on its own. Lenders are becoming more aggressive as the refi market dries up and as supply and demand becomes more balanced and confidence grows in jobs and the economy. I think 3 percent down will help a lot of people who have good jobs and decent credit but not a lot in their savings accounts.
Mike Pappas: I agree that the market is correcting itself, and normal, creditworthy people have a plethora of options for getting loans. Prices have leveled out and interest rates are still low, so there’s no frantic intensity. Now is the time to buy, while those windows are still open. People need to be reminded of that, so reaching out to consumers is key.
Sheryl Chinowth: It’s critical, especially to the millennial generation, who make up a quarter of the adult population in this country and who’ve been sitting back content to rent. They’re a different kind of buyer, but they’re now getting the jobs they weren’t able to get right after graduation. That gives them stability, and we need to do a better job of reaching out to them.
Bill Soffel: This is where the “rent-versus-buy” analysis is crucial. These are smart, young people. They understand the economics, and it’s time to make the extra push to get them into the market.
MP: In many cases, they have the resources as well, as a lot of boomer parents are beginning to transfer wealth to their kids.
JI: As Steve Harney points out in his Keeping Current Matters blog, “You’re paying for housing whether you own or rent—and there are substantial tax benefits to owning.”
DE: It’s certainly the message we project in-house. Buyers may need higher credit scores and more documentation, but even conventional lenders are lending more aggressively today. We’re starting the year with full confidence that things are moving in a positive direction.
SC: We’ve remained on a fairly even keel, so financing has been less of an issue. Having a reasonable debt ratio is more important than ever, but loans are readily available. We’re seeing more investors from all over the world buying moderately priced rental properties, so the market environment is more encouraging all the time.
BS: It would seem the worst of the financing crunch is behind us. This is the time to reach out and connect, and to reconnect and build relationships with every person in your database.
JI: So the consensus is we have all the components to make a compelling case. If we get out there and tell it to a wide cross-section of buyers, we should all be able to look forward to a rewarding 2015. To that end, NAR’s Consumer Advertising Campaign’s national advertising efforts educate the public about the value of property ownership and the REALTOR® brand.
For more information, visit realtor.org.