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VOL. 125 | NO. 57 | Wednesday, March 24, 2010

Yun Brings Economic Forecast to MAAR Summit

By Eric Smith

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Lawrence Yun, chief economist for the National Association of Realtors, will be in Memphis next week to discuss all things housing.

Yun

Yun is coming to town courtesy of the Memphis Area Association of Realtors, which is hosting its first Residential Real Estate Summit Monday from 1 p.m. to 4 p.m. at the Germantown Performing Arts Centre.

Local speakers include Dexter Muller of the Greater Memphis Chamber; Michael Murphy of Murphy, DeZonia & Webb; Lisa Reid of Magna Bank; Robert Stephenson of Stephenson & Associates; and certified residential specialist instructor Jerry Rossi.

Yun, who will deliver the keynote address, spoke with The Daily News about the real estate market’s woes and future.

Q: How bad has this real estate crisis been compared to other downturns?

A: It’s been four years of housing market recession. The economic recession lasted two years and it looks like the economy is coming out and is on a recovery path. For housing, it’s been much longer; four years of a downturn. But housing also appears to be on the verge of stabilization.

Q: What were the main reasons for the housing slump?

A: Without a doubt very lax underwriting standards; just trying to give out mortgages for anyone who had a heartbeat. That brought on too many people who were not financially capable. We can clearly see that in hindsight.

Q: Did the real estate industry, and specifically NAR, respond properly to the downturn and is there anything that could have been done differently?

A: From the real estate association and position as a chief economist, I think we need to be assured that we are promoting a successful homeownership policy, and not any homeownership where people buy and be foreclosed upon. That’s embarrassment for the association, it’s not good for the families involved, it hurts the community. Anything the association was either promoting or acquiescing in bringing about this frenzy, that needs to be re-examined.

Q: So not everyone should own a home?

A: Anything that says people should buy a home yesterday, today and tomorrow, that’s an irresponsible comment. That is not considering all of the factors.

Q: Is it difficult getting people to understand how their local market might differ from the national climate?

A: All real estate is local. ... In Middle America ... there was no bubble. Maybe just a modest-level mini-bubble that was occurring, but no major bubbles like the California, Florida markets. Hence, there was very little to pop. But what people get from the media is that the housing market was a bubble and then there was a crash, so even though people in Memphis may not be in that big boom and bust, consumers get that message and act based on that information.

Q: What is your forecast for 2010?

A: Forecasts are subject to error, but having said that I believe that 2010 will be viewed as a beginning of a recovery in the housing market. ... This year in 2010 with the tax credit in place … I do anticipate ... that inventory level will continue to shrink. And with a steadily declining inventory level that we will have and stabilizing home values, that by second half (of 2010), we hope the economy recovers fully and that we have a consistent job creation.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 51 223 1,152
MORTGAGES 55 189 861
FORECLOSURE NOTICES 25 45 144
BUILDING PERMITS 149 541 2,593
BANKRUPTCIES 24 120 581
BUSINESS LICENSES 14 65 264
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0