A panel of real estate experts convened at the annual conference of the Massachusetts Association of Realtors (MAR) offered moderate hopes for the future of the New England housing market, but the pressures of the present – especially the difficulties in closing short sales – seemed to be more pressing in audience’s minds.
Panelists discussed the likelihood of reform or elimination of Fannie and Freddie, possible options for local development initiatives, the renewed appeal of community banking, and the need to preserve the state’s affordable housing law, 40B, which is up for repeal on this November’s ballot. Experts included Gregory Bialecki, the state secretary of Housing and Economic Development; Barry Bluestone, a professor of economics at Northeastern University; Kevin Kiley, executive vice president and COO of the Massachusetts Bankers Association; and Kevin Sears, 2010 president of the MAR.
However, the loudest round of applause was in response to a remark by Bluestone that banks may have to hire as many as 50,000 to 100,000 more people, nationwide, to help process the increased volume of short sales and foreclosures next year. With a large proportion of transactions involving distressed property, delays and confusion in short sale processing have plagued many real estate agents this year, and agents have repeatedly raised concerns about it.
Kiley said that while no banks enjoy processing distressed sales, said the moral hazard issue remains a concern, particularly for larger lenders. "If we as a lending industry start getting into large scale short sales, I think that all sorts will start standing in line, saying ‘I want you to take a 40 percent haircut on my property, because it’s underwater, too.’ So there’s a balance there that has to be achieved," he said.
Speaking on behalf of the industry, Sears expressed worries about the possible elimination of the GSEs and the affordable housing law.
"Not only with 40B but with Fannie and Freddie, if they just get tossed out, I could see it wreaking havoc in our industries. And not only in our industry but in out communities, because of the inability to sustain the level of homeownership," he said.
