NORMAN — The real estate industry has gone through the most “bizarre five year history” ever and surviving Realtors need to spread the message that home ownership should remain part of lasting American values, the president of the National Association of Realtors said here Wednesday.
Ronald Phipps, a third-generation Realtor from Warwick, R.I., told about 300 Oklahoma real estate professionals gathered at the Holiday Inn that he spends much of his time lobbying in Washington, D.C., to protect the home mortgage interest tax deduction and working for a sustainable secondary mortgage market, two keys to encouraging property ownership.
“We are in times of great challenge,” said Phipps, a Realtor for 31 years. “We have been through the most bizarre five years in real estate history.”
Real estate is cyclical and housing often is credited with bringing the economy out of a recession but not this time. Home ownership remains a tremendous way to build net worth. A home’s value often reflects an owner’s world view.
“They view their well being directly as the value of their homes,” Phipps said.
He said an American family that owns a home has an average net worth of $188,000 whereas a family that rents has a net average worth of $4,600.
“It’s in the national interest to encourage home ownership,” Phipps said.
While interest rates on 30-year home mortgages remain at near-record lows, Phipps said access to loans has been frustrating for many Realtors who have clients who appear to be bankable.
“If a person has money in the bank, money to put down and for some reason or another has a bad credit score, then let’s analyze it. Let’s not just throw it out.”
He said tight credit cost the housing industry 770,000 transactions last year alone, a loss of 375,000 jobs. Realtors figure each transaction sustains half a job and affects 80 more.
In a Transcript interview before his talk Wednesday, Phipps, who represents the 1.1 million members involved in all aspects of the residential and commercial real estate industries, said a sustainable replacement is needed for mortgage giants Fannie Mae and Freddie Mac in order for buyers to have predictable mortgage interest rates.
“They (Fannie Mae and Freddie Mac) did terrible things but for 80 years they provided stability in the housing market,” he said.
He said the Oklahoma housing market appeared relatively stable with little impact from swings in prices as other areas of the country have experienced. Employment, he said, drives more home sales than interest rates and recent announcements of job gains in Oklahoma should help move some houses, he said.
Phipps said it doesn’t appear likely Congress is seriously considering dropping the mortgage interest deduction. “But just by asking the question, it causes doubt,” he said.
He was joined in Norman Wednesday by Nobu Hata, a Realtor and nationally known instructor from Minneapolis, who talked about technology in the real estate industry.
Welcoming the Realtors Wednesday were Norman Mayor Cindy Rosenthal, Lt. Gov. Todd Lamb, Norman Board of Realtors President Sherri Parker-Evans and MLS President Tom McAuliffe.
Rosenthal thanked the Realtors for promoting the state in their work.
“The role of Realtors is to sell Oklahoma,” she said.
