Jamaican sprinter Usain Bolt captivated audiences with his speed and charisma during the 2012 Summer Olympics. You may have noticed “The Fastest Man in the World” slows his steps ever so slightly when approaching the finish line during his individual events, confident that he had clinched the win. But in the team relay, he never let up as he ran full speed through the finish line. NAR Chief Economist Lawrence Yun attributes this to the team-mentality. Studies have shown that athletes often perform better in a team environment, he said.
REALTORS® also belong to a team, and consequently should work for the betterment of the industry and attainability of home ownership, Yun said during the economic update at the NAR Leadership Summit in Chicago Tuesday. Despite the fact that the economy is growing, the nation’s mobility rate has slid and owner-occupied sales are still stalled. Thus, the teamwork of REALTORS® is needed more than ever.
“Once you have the baton, you have to be the fastest runner in your association,” Yun said to the audience of REALTOR® association leadership and staff executives. “We have to get America moving again.”
Existing home sales came in at a seasonally adjusted annual rate of 4.37 million in June, up 8 percent year-over-year. Investors coming into the market account for many of those sales, but Yun called the growth “only a slight increase compared to what it could be.” Investors are needed, but Yun said he wants to see less hindrance for owner-occupied buyers, such as reevaluating the stringent underwriting standards from lenders that have been a stumbling block preventing buyers from entering market.
Another big issue continuing to hold back home sales is job creation. The economy is growing at a slow, incremental rate, said Yun, with 4 million new jobs added over the past two years. However, that gain only gets the country halfway back to speed with 8 million jobs lost during the recession. Yun said the country would need to generate 200,000 to 250,000 new jobs every month for next decade to get back to the normal 5 percent unemployment rate.
The nation’s mobility rate—the ability to move to find greater opportunity—has been dramatically affected by the recession and joblessness. Not long ago the mobility rate was 20 percent, while today it’s down to 12 percent.
The good news is that the estimated shadow inventory is falling, which includes seriously delinquent mortgages and homes in foreclosure. Shadow inventory is down to an estimated 3.5 million homes as of the first quarter of 2012 after peaking at 4.7 million homes two years ago.