RISMEDIA, June 23, 2009-(MCT)-The dream of homeownership is alive and well in the U.S., the president of the nation’s largest real estate trade association recently told a professional group in Fort Worth.
“That’s pretty remarkable considering what’s happened to home prices and sales this year,” said Charles McMillan, who this year is leading the 1.1 million-member National Association of Realtors.
McMillan got his start in real estate in Fort Worth in 1983. He was the Greater Fort Worth Association of Realtors’ 1992 Realtor of the Year and the 2000 Texas Realtor of the Year.
He’s now director of realty relations and broker of record with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. He returned to his home turf Friday to speak to the Dallas-Fort Worth Chapter of the National Association of Hispanic Real Estate Professionals.
He told the group that consumers want back in the market on two conditions: They can get a home for a good price and financing at an affordable rate.
“With so many distressed properties for sale, it’s not difficult to find a bargain. However, some might say that we communicated our message too well because now we have so many buyers who have unrealistic low-price expectations for all homes. They have the feeling that all sellers are distressed sellers and they’re not.”
Finding affordable financing for potential home buyers also remains a challenge, McMillan said. Last year’s government takeover of Fannie Mae and Freddie Mac should have encouraged financial institutions into pumping more money out to consumers, but that has not been the case, he said.
“I’ve heard many, many stories from Realtors who have seen good-credit clients turned down for loans,” he said. “We’ve got to take a critical look at lending practices and find a way to balance responsible lending with an appropriate pool of capital in the marketplace.”
McMillan spoke with the Star-Telegram following his address:
Star-Telegram: As the housing market was going bad, was there anything that real estate agents could have done back then to help?
McMillan: Neither the real estate industry nor its allied folks and regulators knew the huge tsunami that was about to hit us. One of the things we did, and do, as Realtors, is we would bring to the attention of authorities when we saw abuses going on at the closing table; fraud going on at the closing table. As far as us forecasting and foreseeing the great decline, we did not, nor should we be faulted for it.
Star-Telegram: What is it going to take to stabilize the U.S. housing market?
McMillan: Keep interest rates low and stable. The volatility that’s occurred in the last three weeks has not been helpful. Make financing, mortgage money, available. That’s still a challenge despite the fact that all of the bailout money was given to financial institutions. Stem the tide of foreclosures; shrink the existing foreclosure inventory. Our data shows that is starting to happen.
Star-Telegram: The NAR has called for the expansion of the first-time home-buyer tax credit for all buyers. How will that affect the market?
McMillan: It will impact the market significantly. The current tax credit brought buyers back in unprecedented numbers. Approximately 43% of all sales have been first-time home buyers making use of the first-time tax credit.
Star-Telegram: What glimmers are you seeing in the housing market right now?
McMillan: Existing home sales are increasing. They’re increasing more dramatically in areas that had more severe downturns, like California, Nevada, Arizona and Florida. That says a lot about the ability to decrease the excess inventory on the market. Unfortunately, most of the sales that are a part of this dramatic increase are distressed sales.
Star-Telegram: What other issues will be facing your organization this year?
McMillan: There are two issues: reform with respect to appraisal issues and appraisal management companies and healthcare. Almost 50% of real estate practitioners operating as independent contractors don’t have healthcare.
Star-Telegram: You took over this organization at one of the most critical times in the housing market. How are you handling the pressures?
McMillan: I think I’ve been handling it very well. Hours after I took over, I was scheduled to go to Tokyo and no sooner I got home, with a 48-hour turnaround, I flew back to Washington to testify before the House Financial Service Committee about reform. While the job has been difficult, it’s required a whole lot of time. It’s a commitment I made going into this role.
Star-Telegram: What has been your biggest accomplishment?
McMillan: Having Freddie Mac and Fannie Mae eliminate their “declining markets” policy, which was adding tremendously to the decline of neighborhoods by stigmatizing those areas. That was a huge coup. We met with them intensely and hours later they rescinded that policy. [Under the policy, loan underwriters were requiring larger down payments in areas where home prices were falling or were hard to determine. The NAR argued that the policy disproportionately affected minorities and lower-income families.]
Star-Telegram: Is real estate still a good career choice?
McMillan: Absolutely it is. One of the things we’re seeing now, more people are coming into this who have chosen real estate as a career from high school.
Copyright ©2009, Fort Worth Star-Telegram, Texas
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