By Ulrich
I had the opportunity last week to represent the Steamboat Springs Board of REALTORS at the National Association of REALTORS (NAR) Resort and Second Home Symposium (RSPS) held concurrently with the Western Mountain Resort Alliance (WMRA) semiannual meeting held on June 13-18 at Lake Tahoe. Besides being able to enjoy the beautiful Lake Tahoe area I found the Symposium and meeting educational and interesting.
During the two day RSPS Symposium there was several opportunities to speak with various persons from NAR including the President Elect, Ron Phillips. Ron comes from a six person firm in Rhode Island. Ron is a third generation REALTOR and quite available to his constituency. Throughout the Symposium members of WMRA spoke out about the lending issues that are plaguing all of our resort areas. As President of WMRA Dennis Hanlon would later state “NAR finally gets it”!
This became evident as during his opening remarks Mr. Phillips stated that a leadership team from NAR would be visiting all five major lending institutions within the next month to urge them to increase their lending practices. He informed us that 20 years ago the major banks conducted less than 10% of the national mortgage business. Now the big five hold 73% of all mortgages. NAR is also working on Congress to extend the June 30 deadline to close on a first time homebuyer’s tax credit property. There are currently 180 thousand properties nationwide that are at risk of missing this deadline.
We were also given a presentation by NAR’s Chief economist Lawrence Yun. There are several economic indicators that point to a slow but steady recovery. He pointed to items such as the GDP growth along with job market stabilization and recovery of the Stock Market. Having said that there are still 8 million jobs that need to be absorbed as well as high Real Estate inventories. The forecast is for this process of job and property absorption to take up to four years to fully recover. During most strong economies the United Sates will average about one million housing starts per year. The current forecast for 2010 is less than half of that. California seems to be leading the way with several areas showing raising prices and inventory dropping.
He forecast that the interest rates will remain low and stay between 5% and 7% over the next five years. When asked about inflation Dr. Yun’s opinion was that this was currently not a credible threat. The dollar is viewed as a strong and stable currency and worldwide is used by countries as currency stabilization. As long as the confidence in the dollar remains he does not see any significant sell off which would lead to inflation.
The Western Mountain Resort Alliance will continue to spearhead the effort to get some legislation passed to change Freddie Mac and Fannie Mae’s rules to allow for condo financing and/or ask for a temporary exemption like they allowed in various counties of Florida. The biggest hurdle is the perception that the legislators are simply clearing the way to allow second home and investment lending for the already rich. In the meantime we are also working through NAR to get the lending institutions to be more responsive to condominium lending. As I pointed out the issue is not just that we have well qualified Buyer’s who wish to purchase but also that some of the Seller’s of these properties HAVE to sell.
We have been very fortunate in the Yampa Valley in that our distressed properties consist of less than 1% of our market. The owners of these properties have been able to survive but now need to sell. I would suspect that the last thing that banks want is another wave of delinquencies.
I enjoyed my stay as well as the Symposium but I have to tell you there is nothing better than arriving back home in Steamboat.
