The 2011 Political Arena: How Will It Impact Real Estate?

The 2011 Political Arena: How Will It Impact Real Estate?

RISMEDIA, January 10, 2011—Now that the November elections are over, real estate professionals are looking to 2011 as a year that will be marked with change. With a decisive shift in Congress, the fallout for the economy, business and consumers is still yet to be determined. In this month’s Power Broker Roundtable, real estate professionals Helen Hanna Casey and Matt Rand discuss where they see the market headed as we continue through the year.
Moderator:
Charlie Oppler, Special Liaison for Large Firm Relations, NAR
Participants:
Helen Hanna Casey, President, Howard Hanna Real Estate services,
Pittsburgh, Pennsylvania
Matt Rand, Associate Broker, Better Homes & Gardens/Rand Realty, Hudson Valley, New York
Charlie Oppler: The November elections are behind us at last, but there is, as they say, a new sheriff in town—or at least a decisive shift in Congress. What the fallout will be, for the economy, for business, and for consumers is yet to be determined. One thing is certain: there is plenty of gridlock, and how adroitly legislators on both sides of the aisle can negotiate through it for the greater good will have a direct impact on our pocketbooks. If there is a bright spot, it is the unanimous recognition that job creation is key to recovery—and, by extension, to growth in the housing industry. So real estate professionals, like businessmen in every industry, are keeping their eye on the prize: sustained job growth that leads to more robust consumer spending. According to figures from ADP Employer Services, employment nationally increased by 93,000 last November, the most since November 2007. Is that a fair indication that we are on the road to recovery? Will the post-election Congressional split be able to keep the momentum going? To toss these questions around, we’ve invited a couple of savvy industry veterans to join us. Let’s start with you, Helen. What do you think we can we expect going forward?
Helen Hanna Casey: Well, it’s easy to say that things will change, but it’s too early to tell whether the two sides can actually work together. I think business people and entrepreneurs in general feel perhaps a little more comfortable, and the hope is that extending tax credits and benefits will, in fact, stimulate job growth—which, as you say, is paramount. Certainly there are target groups and target areas that would benefit from federal intervention.
Charlie Oppler: Like preserving the mortgage interest deduction, which NAR is pressing hard on both sides of the aisle.
Helen Hanna Casey: And change in the condo market. Like the tax credit for first-time buyers, a tax advantage now for people selling their houses and moving into condos would go a long way toward stimulating the housing market.
Matt Rand: That’s true. On the other hand, it would be foolish to expect this Congress or any other to come riding in on a white horse. The economy will continue to improve slowly anyway. Maybe the best thing we can hope for is that they don’t do any damage—like raising taxes or eliminating deductions.
Charlie Oppler: In other words, stop the finger pointing, stay out of our hair and let the healing take its course.
Matt Rand: Right. We can’t control the market, but we don’t have to get caught up in the drama.
Helen Hanna Casey: There is something to that, and I think it’s important to keep in mind that real estate is still, and will always be, a local issue. Perhaps the real question is, what can we all be doing on the local level to stimulate jobs and the economy?
Charlie Oppler: I don’t know. How do we, as REALTORS®, get involved in job creation?
Helen Hanna Casey: Well, in our region, for example, there are major market opportunities in the massive oil reserves of the Marcellus Shale formation. Excavating, trucking, fabrication, hotels, restaurants, and other support industries have already created 88,000 jobs in Northeast Pennsylvania. If we can get our arms around the environmental issues, which could be the potential downside, there will be thousands more jobs created and plenty of housing needed, so it behooves us, as REALTORS®, to get involved in reaching workable, local solutions.
Matt Rand: And also to realize that the focus needs to be local, and it needs to be on ourselves. There’s an old story about two guys in the woods who come across a bear. They both start to run, but then one of them stops to tie his shoes. “What’s the matter with you?” the other guy yells. “Why on earth are you stopping?” “Because,” says the first guy, “I don’t need to outrun the bear. I only need to outrun you…”
Charlie Oppler: If I read you right, you’re saying we can’t control the market, but we can control our own destiny.
Matt Rand: Right. The economy will do what it’s going to do. Our job is to outrun our competition.
Helen Hanna Casey: Get involved in creating jobs…
Matt Rand: Focus on performance. Keep our agents well- trained, know the local market better than anyone, and make the best use of new technology to keep our sales force efficient.
Charlie Oppler: Sounds like we have work to do. Anything the government adds is a bonus.
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