By Jay Hummer
Last night, as I watched the New England Patriots play in Super Bowl XLVI, I could not help but marvel at the success of this franchise since the Bill Belichick/Tom Brady era began. During the last 11 seasons, the duo has been to five Super Bowls. They’ve won the big game three times. Even though there have been some heartbreaking moments since the collapse, including last night, their accomplishments cannot be understated.
The Patriots are not only a model franchise, but a model business. They’re able to address their short term needs while also following a long term strategy which has resulted in unprecedented success since Robert Kraft purchased the team. Kraft, Belichick and Brady understand steady success will lead to great things.
Steady success is sometimes overlooked, especially in a corporate climate where every decision must result in a blockbuster. However, steady success is exactly what we need to jump start the real estate market and I feel like we are finally beginning to see it.
Just a few short weeks ago, RE/MAX of New England released its 2012 Housing Market Trend and Forecast Report. What we found is that historically low interest rates, renewed interest by investors and job growth helped provide modest stability to the market in 2011. The first half of the year was a little slow, but the last six months showed very encouraging signs of growth and stability.
Once the final home sales were tallied, 2011 was virtually flat compared to 2010. Make no mistake: flat is positive, especially after the roller coaster ride we have experienced since the recession officially began in 2008. Flat is the first step towards stability, and the beginning of what many of us hope will be a slow, but steady, recovery over the next few years.
The importance of a vibrant housing market cannot be overstated, as it is one of the basic building blocks of a healthy economy. Someone who understands this is Federal Reserve Chair Ben Bernanke. Bernanke has promised to keep key interest rates near historic lows int0 2013, and according to Bloomberg News, he has also been a vocal advocate for programs to help the U.S. housing market.
One such proposal was unveiled in President Obama’s recent State of the Union Address, when he promised to submit to Congress a plan “that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates.” Details of the plan remain scarce, but The Brookings Institution says it appears to be targeted at underwater borrowers who are current on their mortgage payments.
Only time will tell how many homeowners will actually be helped, but what is important is that nobody in charge of our economy ever forgets the importance of homeownership. That is something which is always top of mind here at RE/MAX of New England, but not because it is our job. Rather, quite the opposite. It’s our job because it is what we are passionate about.
Just last week, we capped off our most recent contest, called RE/MAX, Recognize & Remodel, by awarding a $2,500 room make over to Paul Agakian and his family. Paul and his family purchased his first home, a fixer-upper, from RE/MAX sales professional Pam Gray of RE/MAX Coast to Coast in Portsmouth, NH late last year. But, just a few months later, he was diagnosed with an extremely rare form of brain cancer. Paul, an experienced tradesman, has had to put his renovations on hold while he undergoes radiation five days a week. The community, including Pam who submitted the video that helped Paul and his family win, is rallying around the family, and we couldn’t be happier to do our part to help make their lives just a little bit easier during this difficult time.
Supporting the community is just one of the many reasons homeownership is so important. And now that it seems prices have reached the bottom, I expect more people will recognize the value of owning a home. As consumer confidence increases, those who were uncomfortable with purchasing a house or condo will begin to realize there is actually no better time to buy.
As more buyers get in the game, we should begin to see month-over-month and year-over-year home sales and prices begin to creep up. The change won’t be an overnight blockbuster, but the slow, gradual increase will result in a steady success that will lay the foundation for long-term stability in the New England housing market.