The drama that has been unfolding on Capitol Hill this week is not the usual production that is played out by the theater of Congress. While it seems as if everyone has something to say about debt ceiling issue, it’s no surprise that the National Association of Realtors® (NAR) also issued a statement.
A statement released July 29th by NAR president, Ron Phipps (Realtor.org) urged Congress to resolve the debt ceiling issue. Phipps stated; “…Until a resolution is reached, Congress will be unable to address the myriad issues facing the nation’s families, communities, and economy. The indecision in Congress is paralyzing progress on other fronts, and it is harming home buyer confidence and negatively affecting home sales…”
Although it is a convenient opportunity to point the finger at Congress for eroding home buyer confidence; by many accounts, the housing market has been affected since spring.
Given that June is typically the height of the home buying season, it comes as no surprise that NAR’s June pending home sales report (homes under contract but have not yet settled) indicated a 2.4% increase in nationwide pending home sales. Local June data corroborates a slight increase in pending home sales, however, the number of contracts actually going to settlement is decreasing. Montgomery County single family home sale data compiled and reported by Metropolitan Regional Information Systems, Inc. (MRIS.com) and the Greater Capitol Area Association of Realtors® (GCAAR.com) may reveal that momentum in the local housing market may have been losing steam since April; the number of settlements in April, May and June of this year decreased compared to the same time the previous year.
Much like the bipartisan group who appear to be contrarian to the status quo of a brokered calm after the debt ceiling storm, some housing experts are looking to correct the spinning rhetoric of housing data. The housing status quo was challenged earlier this year when CoreLogic, a real estate data company, called into question NAR’s housing data and methodology as being “overstated.” Naturally, the NAR refuted the allegation and quickly posted answers to their questioned methodology.
Also, akin to the confusion of mixed issues in the recent debt ceiling debate, housing issues also continue to be mixed and confused. Even though the debt ceiling discussion was (appropriately) tied to deficit spending and the national debt, the bigger picture was substituted for a shortsighted thumbnail focused on the status quo. Meanwhile, a fragile housing market continues to languish; albeit bits of positive statistics that are used to spin hope and rationale to buy a home and maintain a status quo. The result is that a new home buying paradigm may be eluding experts; a new approach to home ownership and motivation for buying a home that may be uncovered when the numbers and statistics of arcane housing reports are stripped away.
Since housing is a large sector of our economy, then comparisons may be fitting. The reality that seems lost to some is that just because “you can” buy a home may no longer be the reason to do so. Unlike the characteristic home buyers, who in the last decade, leveraged themselves to the hilt to buy a home; many current home buyers are concerned about an uncertain future and their family’s welfare- and as a result have become austere in the current economic environment.
by Dan Krell
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