Johnny Isakson - US Senator and REALTOR from Georgia at Atlanta GA Real Estate FMLS Tradeshow - August 2010
Every year I attend the FMLS Showcase for all kinds of real estate knowledge and making sure I am keeping up with trends, new products and software updates. Yesterday, for the first time I got to see Johnny Isakson, our Senator from GA give an excellent talk about our economy relating to Real Estate from a Realtor's perspective.
Johnny spent over 20 years as a full time Realtor in Atlanta, as well as part of that time operating a local real estate firm as a business person. What he said made a lot of sense and I took notes. I thought I'd give a go of trying to share his message, as he is the only REALTOR in the US Senate and is considered the expert in our industry for the US Congress.
First, although Senator Isakson was a Realtor through a few difficult recessions, in the past 40 years, he noted that this one was worse and different, as while inventories are down, our economy has two big challenges:
- Jobs - very high unemployment
- Uncertainty - such that there's a lack of decision making, as folks are concerned about what's coming at them next!
Senator Isakson expects it will be a 5-7 year housing recovery with a "new normal" within that of three criteria to get a mortgage:
- Solid job
- 20% down payment for your purchase
- Good Credit
He will not be going back to the US Congress and asking for any additional house buying tax credits because he promised he would not and our countries deficits are just too high. Doing an additional credit would destroy value of hard assets and affect inflation, neither of which is good for us!
We really need to recover slow and steady and debt is a big problem. So big, he cited the example of perspective that now that the US Government Debt is in the Trillions, he wanted to try to share how big ONE trillion is. If you count a trillion seconds going by, you need 31,709 YEARS of time to do so!!!!! Wow, that is a heck of a long time folks.
With respect to Flood Insurance via the US Government, Isakson was embarrassed that it ever lapsed in the first place, although now in place through September 30th, 2010. He is completely expecting that to be made permanent, as there is no other option to insure flood plain properties to take it's place.
Interestingly, he didn't make the presentation very political, but thought November 2nd would see very high turnout as folks vote their pocketbooks.
A great question was asked about how he sees the future of Fannie Mae and Freddie Mac. Senator Isakson took us back through the 1980's collapse of the Savings and Loan Banks - evolving into the RTC who took over bad assets evolving into Fannie & Freddie. Continued evolution of those two is expected as they cannot survive in their current form.
Citing an example from Great Britian, he shared how there is a small insurance for all properties sold that goes into a bucket to cover issues as a reserve fund, so it wouldn't be the government, but this private fund resolving issues. Interesting option, as he doesn't see how the US Government can be the only resource for all housing issues.
As far as the Finanical Reforms related to Mortgages, Isakson doesn't feel that they hit the mark, in fact costing the consumer more, when the goal was to reduce costs. Most likely more work to follow. He cited one challenge of having appraisers come in from another state to do appraisals, that just isn't good business practices.
When asked about FHA mortgages, he thought their future was bright as long as they are not the only source for mortgages, but about 40% of new mortgages.
Lastly, Senator Isakson shared that HOUSING is the CORE of the US ECONOMY!
I know this is long, but thought it worthwhile to hear what our Realtor advocate in Congress is saying about the Real Estate Market!
A special thanks to Mitch Kaminer, (shown smiling with Johnny Isakson in the picture above), an Atlanta Realtor & upcoming Atlanta Board of Realtors' President for allowing me to use his nice picture!
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