Avoiding foreclosures helps local markets

REALTORS® can make a difference in people’s lives, especially those facing short sales or foreclosures, according to Grant Simon, a real estate instructor, broker and mortgage originator in Florida.

Simon will be teaching “Navigating the Waters of Short Sales and Foreclosures” at Triple Play 2010. His class covers market statistics, the impact of foreclosures and how REALTORS® can help consumers through this difficult time.

Two issues having the greatest impact on real estate are employment and stabilization of housing prices. “If there aren’t short sales and foreclosures, you have a more stable market,” Simon said.

In 2007, 15 percent of Pennsylvania’s gross state product was from real estate, according to Simon. “It’s important to keep in mind that the sale of one home has a positive impact of $53,849 on the local community from people buying new goods and services.

“When a home goes into foreclosure or a short sale, it has the opposite effect,” Simon explained. “When REALTORS® help a homeowner modify his loan or they sell his home to avoid a foreclosure, it has a positive impact on the market. REALTORS® can make a difference.”

Currently, one in 842 homes is in foreclosure in Pennsylvania. Simon compares this to one in 155 in Florida or one in 84 in Nevada. “Pennsylvania is ranked 33 in foreclosure rates on Realty Trac,” Simon said. “You have a lot to be thankful for but REALTORS® shouldn’t take their eyes off the ball.”

“We’re in historic times in the real estate market and that requires additional education and training to guide you through these turbulent times,” Simon said.

He said many people are waiting for the market to return to “normal,” but it’s difficult to tell what normal is since the market has been dealing with wide swings in the last decade.

Pennsylvania ranks 21^st nationally in home price appreciation, with a rate of -1.03 percent.  “If you look over the last five years, Pennsylvania was ranked 17^th nationally with positive numbers. In the last two decades, Pennsylvania’s real estate is up over 4.6 percent, according to statistics from the Federal Housing Finance Agency (FHFA),” Simon said.

The appreciation rate is important to recognize because real estate is a great way to build long-term wealth, according to Simon. “Real estate isn’t a short-term vehicle for building wealth. What happened over the last decade was unusual and there was a lot of greed in the marketplace. People lost sight of their values,” he added.

“Going forward, we have to do a better job of teaching budgets and qualifying consumers,” he said. “We need to rethink homeownership and put the right people in the right homes for the long haul.”