Realtors rally for home ownership
Last Thursday, more than 10,000 Realtors met on the lawn near the Washington Monument in Washington, D.C., in an attempt to get the attention of government. The message; Home ownership matters.
The Federal Flood Insurance program is set to expire again in just a few days. This may create another standoff as the parties in Washington use the opportunity to leverage other agendas. The problem is that, like it did six months ago when the program last expired, it will bring many home sales to a grinding halt. Banks won't lend money to buy homes that appear to be in danger of flooding according to maps drawn by FEMA.
Private insurance carriers have been unwilling to offer such insurance except at exorbitant rates that drive the monthly payment for homes high enough to eliminate the opportunity to own a home within many buyers' budgets. The new maps delineating the 100-year flood plain include more properties than before and experts argue that they are exceedingly inaccurate at best. These new proposed flood plain maps put 28 percent of all Idaho homes within the flood danger area. The lack of flood insurance will delay any pending sales of these homes and drive up the monthly payments for those who do find flood insurance.
How important is this to our fragile economy? When you consider that real estate sales account for 15 percent of our Gross National Product, it is very important. To allow the expiration of this insurance program will be very damaging indeed to the fragile and gradual recovery currently under way in many parts of the country including here in North Idaho.
This recovery repeats a historic cycle for real estate but the recovery period will be longer than past recessions by all accounts. Even with government flood insurance it will take awhile to dig out of the depths to which we had fallen at the end of the boom.
Should the flood insurance program be renewed the future of real estate is once again looking good. As we have reported here before, as a long-term investment, real estate has always paid off for those who have invested their hard-earned money for the long term while short-term "flippers" often get burned as many did in 2008.
In reality, the next few years is likely to see a housing shortage as the children and grandchildren of the baby boom generation reach the age where they want to become homeowners. Many are already there. They are buying their first homes and competing with savvy investors who are pouring cash into distressed properties that otherwise provide opportunities for first timers. As the last of these descendants reaches their 30s they too will seek permanent housing, driving up demand and further stimulating a lackluster economy.
The National Association of Realtors says that the average economic impact to a community when a home is sold is between $50,000 and $60,000 due to ancillary services and remodeling projects as the new owners make the home their own.
Driving up the cost or making financing even more difficult through the loss of the flood insurance program, particularly in the face of the newer, more restrictive zoning could deal a blow to the housing industry that could cost this nation dearly.
As we all have learned to say, "Home Ownership Matters." Tell your Congressmen.
Trust an expert... call a Realtor. To find a Realtor to represent you visit the Coeur d'Alene Association of Realtors website; www.cdarealtors.com. There you can also search available properties in the Multiple Listing Service.
Kim Cooper is a real estate broker, Realtor and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your commentary and feedback. You may contact them by calling 667-0664 or by writing to them at 409 W. Neider, Coeur d'Alene, ID 83814.