What a difference four years makes. The last time REALTORS® were in Orlando for the REALTORS® Conference and Expo in 2008, foreclosure filings had increased 81 percent over the previous year, home sales had decreased nearly 42 percent from a record high in 2005, and big banking conglomerates were still trying to enter into real estate brokerage and property management.
Today, foreclosures are trending down, home sales are trending up, and banks have been permanently prohibited by law from entering into real estate brokerage, protecting consumers from anti-competitive and anti-consumer concentrations of power within the financial services sector.
“As the leading advocate for residential and commercial real estate, the National Association of REALTORS® has been tirelessly engaged throughout the past four years to ensure access to homeownership and a healthy market for real estate investment,” said NAR President Moe Veissi. “We celebrate our accomplishments, but Realtors® also remain committed to confronting the challenges still ahead.”
In 2008, REALTORS® were focused on relief and assistance for struggling homeowners, affordable and accessible financing, and stimulus for the commercial real estate market, all with the goal of supporting a real estate and economic recovery. In October of that year, NAR submitted a “Four-Point Housing Plan” to Congress and the administration, outlining consumer-driven provisions that called for eliminating repayment of the first-time home buyer tax credit and expanding the credit to all home buyers; making the increased mortgage loan limits permanent; focusing the economic stabilization efforts on supporting the housing and mortgage markets; and permanently prohibiting banks from entering into real estate transactions.
NAR also developed a commercial economic stimulus plan to provide liquidity to the commercial real estate credit market, maintain or enhance federal tax policies that strengthen commercial real estate, and stimulate and support CRE through investment.
Four years later, the housing market is on the road to recovery, but obstacles remain. In the very near term, if the Mortgage Debt Cancellation Relief Act is allowed to expire on December 31, 2012, homeowners will be forced to pay an income tax when a loan amount on a principal residence is forgiven following a loan modification, short sale or foreclosure. NAR is urging Congress to extend the legislation to help struggling families already in financial distress.
As Congress begins to address the U.S. deficit, some of the tax benefits that encourage homeownership may enter into the debate, including the mortgage interest deduction. “Homeowners already pay 80 to 90 percent of U.S. federal income tax, and this share could rise to 95 percent if the MID were eliminated,” said Veissi. “NAR will remain actively engaged to protect this important benefit, which helps hard working families begin to build their futures through homeownership.”
Over the longer term, necessary reform of the secondary mortgage market must include a role for federal government participation to ensure that mortgages are affordable and available to creditworthy buyers, especially in times when private lenders cannot or will not.
In the commercial market, more than $1 trillion in commercial real estate loans will come due over the next few years, and with ongoing credit restrictions, many commercial property owners and investors will have difficulty refinancing these loans. “REALTORS® are working with Congress and regulators to accelerate depreciation rules, improve the availability of credit for small businesses, and increase the cap on credit union member business lending – all of which aim to support an ongoing recovery in the commercial real estate market,” said Veissi.
REALTORS® realize that their advocacy efforts in support of homeownership, housing issues and private property rights must be directed at the federal, state and local levels, which is why NAR recently created the REALTOR® Party Initiative. Through the initiative, state and local REALTOR® associations can access tools, services and funding sources to mobilize REALTOR® and property owners on key issues, tap into advocacy campaign support mechanisms, and conduct campaigns to further local and state issues and policies that advance the real estate business and the rights of property owners.
“Whether REALTORS® are engaged in local issues or national public policies, we will continue to fight on behalf of our country’s families, companies, and communities,” said Veissi. “We need to keep real estate issues a priority on the nation’s agenda, because a strong real estate industry supports a strong America.”
For more information, visit www.realtor.org.
