Elisa B. Coyle

To say, "Our industry is in an uproar!",  is an absolute understatement.  I have spoken before about perspective of the market conditions and the like, but I feel I need to address the ridiculousness of our standards and protocols for operations. 

The sub-prime lending practices that contributed to the mess we are in right now were so lax that it created a mess that needs cleaning up and desperately so, however, now that everyone is aware of this necessity they are jumping off the deep end in the other direction.  Don’t get me wrong, I believe standards need tightening, but sometimes a little of something is better that a lot of everything.  The new appraisal requirements and education requirements for not only lenders, but borrowers and real estate professionals are good in theory.  I do not have any arguments about the necessity of educating the masses with respect to real property purchasing.  It is obviously necessary.  That much has been proven.  The primary issue I have is with the new requirements for the ordering of appraisals.  Those requirements have tightened so much that it is impractical to function.  I realize many questionable appraisals have been performed and submitted, but tightening the belt to the point where no one knows who is to do what and limiting the order to a very select few is not necessarily the best option. 

I agree with tightening the belt, but come on folks jumping in the complete opposite direction is carrying things a bit far.  Moderation and small steps are the keys to a successful transition period.  I hope all those involved in the policy shifts remember that and we, as professionals, need to speak up and give our advice to those involved.

With the economy being as it is today, consumers are extremely cautious. The most important thing for our industry to remember is that now is a great time to purchase real property.  Interest rates are down, as are prices.  That just does not happen.  The economic rule is if the prices go down, interest rates jump and vice versa.  

The consumers are wary of stepping out of the comfort of holding on to their money in lieu of spending on anything, let alone "big ticket" items like transportation and homes.  With a little education, I think our industry can turn that around, but the most important thing to remember is the feelings of the consumers,  What are their key factors in consideration…. Job security, will I be able to continue making my payments is one of the top items on this list.  As an industry, we should give them a pat on the back for this way of thinking, especially in light of the economic situation we are in currently.  In addition, they want to hold on to all they have so it does not lose any value. This is where we, as professionals need to educate the consumers.  Real property will not always be in this state of depression and flux.  It will rebound and appreciate, so any investment made now will give them equity later.

This is merely a sampling of what we can do for our consumer base to educate them on the rare opportunities that we are faced with right now.   

As a real estate professional in this economic climate, I have heard my fair share of griping.  Yes the economy is in a severe downturn and future prospects "don’t look good", but there is always the need for housing, whether it be rental or owner occupied.  The wonderful thing about this particular moment in time is that the housing options are more affordable than ever. 

I realize investors and potential home buyers are keeping close fisted right now, but I also realize that the safest investment in this volatile economy is real property, be it for rental purposes or other uses.  What people do not realize is that now is the time to invest.  When the boom in California was happening people were scooping up property like it was going out of style.  This is part of the reason we are in the situation we are in right now.  Property values were so high and the loans given on these values did not reflect the realistic portrayal of value.  Savvy investors know that now is the time to get into the investment market, when prices are low.  This makes the debt service on the property much more balanced and achievable.

So, when I hear we are in a "bad market", I scoff.  We are actually in a remarkably good market, but we need to educate the investors and potential home buyers to that fact.  Yes, the economy is bad, but wouldn’t you like your money in a safe investment, that you can actually have some control over.  Think about it, it is all in your perspective.