Aneinfo Real Estate

The Federal Reserve Board of Governors needs to quickly cut interest rates further in order to stop the U.S. housing market slow down from worsening and avert a national recession, according to a new report by Housing Predictor.

The Fed finally acted to cut interest rates by a half a point and help the U.S. economy, especially the nation’s ailing housing market. But the Fed’s step to cut the chief bench mark rate is already too little too late for many American homeowners.

A record number of homeowners in the millions are facing foreclosure or at least the threat of losing the roof over their heads. The crisis has exploded into the greatest foreclosure epidemic since the U.S. Savings and Loan Fraud Crisis in the late 1980′s and threatens to worsen and produce the worst housing crisis since the Great Depression.

The Fed acts to maintain a balance of the national economy in order to avert economic down turns and hold off inflation. But the overall economy in the U.S. has already been damaged by the weakening U.S. housing market. Prices are declining in the majority of real estate markets, and too many Americans have used their homes as piggy banks to borrow against them.

The additional turmoil caused by the lack of mortgage funding for many loan companies and the resulting credit crunch with troubles on Wall Street has led lenders into a path of chaos, and threatens to undermine the entire mortgage loan business as we currently know it, according to Housing Predictor analysts.

The discount rate cut of 50 basis points, which equates to a half point rate cut in interest rates may be the first step in a long series of rate cuts the Fed is on to help improve the ailing U.S. housing market. The Fed left open the door in wording with the announcement of the rate cut that it is open to further reductions.

Housing Predictor forecasts more than 250 local housing markets futures in all 50 U.S. states and regularly updates it forecasts and information. Search for homes, including foreclosures and get the latest on your markets forecast at Housing Predictor.

Energy Efficiency and Green Building Offer New Hope for Real Estate

All of the changes that are still being proposed for more bailout money, these are still not addressing the real estate buyer’s mindset. Have you asked why a buyer is not buying? Try asking your friends and family this question. The response will be: too much for a home, taxes are too high and job security is an issue. Who wants an investment that is going south in value. Would you? The state of the real estate market is what is on the line. Ideas from real estate practitioners are what policy makers both Democrats and Republicans, need to be seeking. (And don’t ask NAR, the National Association of Realtors — they are just more policy makers.)

Ask the people in the trenches. Having completed close to 400 real estate transactions, ask me. We need to give the buyer reason to buy again. Create and advertise local and federal tax incentives and make them visible for homeowners to renovate green. A healthier home that comes with lower utility bills and reasonable taxes is an overall better investment. In these economic times, would you buy a home with a $600 utility bill and taxes at $200-$400 a month together that comes to over $10,000 a year? Would buying even be a consideration if your job is at risk or you feel insecure?

Sellers, builders, and renovators need to renovate and produce a product worth buying. THINK WHAT TAX INCENTIVES TO RENOVATE AND BUILD GREEN WOULD DO TO THE MARKET! Then the buyer will come. Then the value of that investment will increase again. Housing prices and real estate taxes need to be adjusted, big time. Who wants a mortgage at $1100 and another $1100 in taxes and utilities and HOA fees? The upside is that these tactical moves by government will create a job base building a new energy sector. This will also increase small business growth aimed at these types of renovations, as well as jobs for administrative forces. My company Green Real Estate Education, has established a “green leadership” certification program for those in th many professions in real estate for under $100.

Already 5,000 are training buyers and sellers, offering the guidance to make a difference for their high utility bills. Those real estate agents and mortgage professionals can now offer a new reason to visit their clients, with good news for bringing up the value of their investment.

The real estate and mortgage industries need market transformation. Consumers care about  how their home can build real value again, not lose value. It is not and will never be business as usual again. We are doing this with education in the field of energy consumption. Realtors learn how they can guide clients to mortgage professionals whose companies develop programs that can help fund a home to be energy efficient, using renewable energy. That creates better value. Through our educational programs, we push the mortgage industry to offer “green funding” programs for consumers to have upgraded systems installed in their homes to save on energy costs. The real estate industry needs to know how to save money and create valid reasons to want home ownership again.

I can tell you the real estate market will not recover with just lowering interest rates, or with just a focus on another bailout. Buyers want green homes. If a consumer looks at a home today, not only can it not lose value, but it better be energy efficient. It better offer a healthier interior space.