At our organization’s annual meeting and holiday party in December, I was honored for my 25 years with RE/MAX. This, combined with RE/MAX celebrating its 40th anniversary this year, has made me pause and reflect, more than usual, about what’s happened over the past 25 and 40 years.
But this isn’t a column about me, about RE/MAX or about looking back. It’s about looking ahead, and doing so through the lens of experience.
Those of us who’ve been in the business a long time have worked through cycles of ups and downs before. And most of us believe good times follow tough ones. Personally, I think we—and the people we serve—all deserve some smoother sailing this year.
And I think that’s what we’ll get:
• We’re going to see more buyers and sellers enter the market due to tremendous pent-up demand that’s been building over the last few years. Millions of young people have been living with mom and dad instead of forming families and buying their first homes, but that trend is on its last legs. And many who have moved out are encountering higher rents; they could become buyers soon.
• The lack of inventory that has dampened activity should cease to be a problem. Buyers will have much more to choose from, including the homes listed by move-up buyers, more foreclosures (because lenders have streamlined their systems) and a greater amount of new construction.
• Even though distressed properties are still a significant part of the market, the numbers should start dropping this year. With rising prices, fewer homeowners are underwater, and the shadow inventory that once loomed as a massive threat is becoming less of a concern.
One reason for my hopefulness on the distressed property front is the extension of the Mortgage Forgiveness Debt Relief Act. The decision, which will help countless families avoid foreclosure, also helped the housing industry sidestep a body blow that would have stalled the momentum built up throughout last year.
• To some degree, lenders and regulators still hold the key to the recovery’s pace. If they find a way to loosen credit to reasonable standards, millions of families will have access to the dream of homeownership. With interest rates near historic lows, it’s a great time for people to lock into long-term mortgages that are well within their means. But with down payment requirements so high and approvals so tough to get, too many people are missing out on the opportunity.
Lending challenges aside, there’s a definite, more positive tone in our industry that wasn’t present a year ago. You can notice it in conversations with other professionals, in the headlines and TV news reports, and even in the voices of consumers. It’s a tone of confidence, and of belief that the worst is behind us.
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