Just days after it was reported in the Rome News-Tribune that the sales of existing single-family homes increased by 17.9 percent in 2012 compared to 2011, Free, president of the Greater Rome Board of Realtors, told the Rome Exchange Club on Friday that one more plateau has to be reached.
“Construction of new homes is going to be our biggest sign of recovery,” Free said. “When we start seeing spec houses, that will be the final exclamation point in a full recovery.”
Guessing the daily ups and downs of the market is just that, Free said, guess work. To prove his point, Free held a Magic 8 Ball. When the ball is shaken, a message can be seen through the window.
At one point, Free shook the Magic 8 Ball, which came up with: “The outlook is good.”
Showing houses the past few years has come with some frustration, he told the crowd.
“Tell us what you can afford, we’ll have a good laugh and go look at some property,” Free joked.
He also complained about the overregulation of banks and mortgage companies, although he admitted that shoddy lending practices played a role in the housing bust.
Now, Free said, “You have to go into the lending institution and prove you don’t need the money.”
Mortgage fraud and shoddy appraising both played a role in bursting the housing bubble, according to Free. But he has seen encouraging signs.
“We are closing more deals, sales volume was up during eight months of 2012 and the average sales price increased in Floyd County over the past four consecutive months,” he told the crowd at The Palladium.
He also said the housing market has been affected by the slow cultural shift from the baby boomers to the millennials, today’s young consumers.
Baby boomers, Free said, married early and wanted to own homes. Free said baby boomers control 80 percent of the personal assets in the U.S. and account for more than half of the consumer spending.
The millennials, Free said, tend to marry late, and many, because of the economy, have moved back home with mom and dad. That means they are not in the position to buy a home. Many are also strapped with college debt.
“We can’t seem to get rid of them,” he quipped.