Housing Market Will Lead Economic Turn Around, Says Leading Economist

RANCHO MIRAGE – If the nation’s economy is going to turn around, the real estate market will lead the way. That was part of the message Dr. Lawrence Yun had for more than 400 Desert realtors Tuesday.

Dr. Yun, the chief economist for the National Association of Realtors, spoke at the Agua Caliente Casino while theUS Senate was passing a stimulus bill that includes a $15,000 tax credit for home buyers.

“This will be for all buyers,” Dr. Yun said about the proposed tax credit. “But it has to be owner-occupied. It cannot be an investor so whether trade-up buyers or trade-down buyers, first-time buyers, they will be eligible.”

But even with an incentive on the way, as most realtors will tell you, the trick will be to get people to pull the trigger.

“There are a lot of buyers who are just waiting,” said local realtor Maureen Bryne. “They want to buy now. They know it’s a good deal, but their fear is that perhaps housing prices will continue to drop.”

Dr. Yun went on to explain an underlying motive behind the tax credit.

“The intent of the stimulus measure is to reverse that psychology to say ‘here’s the money on the table.’ Get into the market because people need to get back into the market to absorb inventory and that will help stabilize home prices.”

Dr. Yun believes if home buyers are given up to a $15,000 tax credit, the real estate market could see signs of recovery by this summer.

And on that note, there’s nothing wrong with putting home sales in perspective.

“Everyone forgets it is a shelter,” another realtor put into perspective Tuesday. “It’s a roof over your head. You can lay down roots. There’s something other than homes besides the economics that’s been lost.”