Focus on Real Estate

NAR launches Web page to help REALTORS® navigate the economy
Last month NAR started a Web page (Realtor.org/NARHelpsYou) full of free information and tools, including the all-new FHA Toolkit online. The free online kit can help you get clients the financing they need in the current credit environment.

A new page has been added to the Website, NAR Helps You Navigate the Current Economy, where you can find dozens of articles and reports on foreclosure, short sales, protecting your finances, the credit crisis and economic recovery act, as well as local market reports and business tips.

First floor master bedrooms among enduring home design trends
Katherine Salant, nationally syndicated columnist and author of The Brand-New House Book, says homes with both a master and second bedroom on the first floor have become the most popular because they appeal to all age groups.

Young couples use the second bedroom as a nursery. Middle-age couples use it to keep aging parents close by, and older couples like the design because their differing sleep patterns make sharing a bedroom difficult, Salant says.

Here are other trends Salant points to:

• The newest variation on the home office is a completely separate office space, connected to the house by a hallway or a breezeway.
• Kitchens are getting smaller, but they are connected to larger dining areas, often with a center island where family members can sit while they have an informal meal.
• Oversized family rooms with high ceilings are giving way to smaller, cozier rooms with lower ceilings.
• Home theaters have lost much appeal because people don't want to watch television in a separate area of the home. TV viewing is a more informal activity that people engage in while they're doing other things like cooking or getting ready for work.

NAR pushing Congress to return for a lame duck session to craft housing stimulus package
On Oct. 21, 2008, NAR President Dick Gaylord wrote to members of Congress indicating the need for members to return to Washington immediately after the Presidential election to craft a stimulus package that focuses on housing. As a foundation for any forthcoming stimulus package, NAR forwarded Congress its 4-Point Housing Stimulus Plan that includes the following:

1. Remove the requirement in the current law that firsttime homebuyers repay the $7,500 tax credit, and  
    expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.

2. Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them  
    permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary,
    and subsequent legislation reduced the loan limits and made them permanent.

3. Urge government to use a portion of the allotted $700 billion rescue package to purchase mortgage-backed
    securities from banks, which will provide price stabilization for housing. The Treasury department should be
    required to use the newly enacted Troubled Assets Relief Program to push banks to:

• Extend credit down to Main Street, making credit more available to consumers and small businesses
• Expedite the process for short sales ? Expedite the resolution of banks' real estate owned (REOs) properties

4. Make permanent the prohibition against banks entering real estate brokerage and management, further
    protecting consumers and the economy.

Forecast from NAR: Affordability is Key
In NAR's Chief Economist Lawrence Yun's forecast, released Oct. 22, he states that the U.S. economy has entered a recession and will contract for the next three quarters. The recovery, beginning in the second half of 2009, will be tepid. The unemployment rate will peak at 6.7 percent by mid next year before steadily heading down.

Despite these challenging economic times, existing home sales will be rising. Why? The answer, in a word: affordability. Currently, the most important factor driving home sales is affordability. With home prices falling in many parts of the country and mortgage rates still near historic lows, affordability conditions have markedly improved. Even with rising unemployment, nearly 93 percent of households will have jobs. These 93 percent of the working households (rather than 95 percent during good economic times) respond to home buying incentives. Measures such as the recently enacted first-time homebuyer tax credit and a larger number of mortgage loans that qualify for purchase by Fannie Mae and Freddie Mac and through the FHA program will further bring homebuyers to the marketplace.

I say this because we have history as a lesson. Back in the prior recession (2001-2003) the economy shed nearly 2 million net jobs. Even during those years, existing-home sales rose from 5.2 million to 6.2 million just as jobs were being cut. New home sales, likewise rose from 900,000 to 1.1 million. Mortgage rates were falling. Housing affordability increased. While those 2 million job cuts were painful, the economy still had 130 million job holders. And given the right incentives, they purchased homes.

To read the full article, visit www.realtor.org /research/reinsights/marketintelligence.