By Robert Freedman, Senior Editor, REALTOR® Magazine
Executives from some of the largest brokerages in the country expect to see their sales grow 6-8 percent in 2010 and home prices to start heading up about 3 percent, REALTORS® heard in a state of the real estate industry discussion Saturday at the 2009 NAR Conference & Expo.
John L. Scott Real Estate chairman and CEO J. Lennox Scott said expansion of the tax credit to include repeat buyers will help boost middle-market sales next year, although mortgage financing above the $417,000 non-jumbo conforming loan limit will remain a challenge. “The repeat tax credit will at least start a conversation about buying” among existing home owners, Scott said.
Congress recently extended temporary high-cost loan limits of $729,750 for 2010 but the lion’s share of markets don’t qualify for those so-called conforming-jumbo loans. As a result, repeat buyers face tougher underwriting challenges. “People applying for a $417,000 mortgage are not wealthy—they’re two teachers,” said Helen Hanna Casey, president of Howard Hanna Real Estate Services, which operates in Pennsylvania, New York, and other states in that region.
The improvement in the middle market will help tighten inventories, helping to shore up prices, but the upper-end market will continue to underperform until companies start hiring again. That’s when the industry will see more relocation business among transferees, a critical component of the upper-end market, said Scott.
Merle Whitehead, president and CEO of RealtyUSA, said a key job of brokers next year is making sure their sales associates understand FHA, because federally backed mortgages will remain the principal provider of mortgage financing for most borrowers. Too many sales associates still think of FHA as financing for people who can’t qualify for conventional mortgages, but in fact FHA is the main source of mortgage capital today. “We have to change the thoughts and beliefs of our agents,” he said.
The session was hosted by Harley Rouda, Jr., chief of Real Living, based in Columbus, Ohio.