OLYMPIA, WA – January 13, 2009 – (RealEstateRama) – The Washington REALTORS® today announced several recommendations designed to energize Washington’s housing market. The recommendations are the product of the Realtors’ Economic Stimulus Presidential Advisory Group, which included three of the Northwest’s top economists and leaders from state agencies. The Realtors will ask lawmakers to adopt the economic-recovery recommendations during the 2009 session of the state legislature.
“Washington state’s economic health depends on a vibrant housing market; every 1000 first-time home sales generates more than $126 million for the state economy,” said Washington Realtors 2009 president, Greg Wright (Chelan), noting also that the state treasury relies heavily on the real estate excise tax and the sales tax on construction labor that is not even included in that number. “The credit crunch is causing home buyers to back away from the market for now, and that’s helped punch a huge hole in the
state budget.”
Wright said the purpose of the advisory group was to identify incentives for people to re-enter the real estate market and revive a critical sector of the state’s economy, adding that the Washington Realtors will seek policymakers’ support of recommendations during the 2009 legislative session that include the following:
1. Stimulate 12,000 home sales by first-time buyers by expanding down-payment assistance, which would be funded by increasing the Washington State Housing Finance Commission’s bond capacity and debt limits.
2. Allow first-time homebuyers to use the tax credit associated with the Housing and Recovery Act for closing costs. The Washington State Legislature, the Governor, and the Washington State Congressional delegation should seek federal legislation to effect this change.
3. Stimulate home sales by offering a temporary property tax credit. The Washington State Legislature should approve short-term legislation that allows home buyers to receive a property-tax credit.
4. Educate consumers about financing and purchasing opportunities. Develop a collaborative, comprehensive public information campaign that helps consumers choose responsible and effective financing options and enhances homebuyers’ awareness of home-purchase options.
5. Protect Washington’s home market, which is a key source of employment and state revenue. “Do no harm” must be the first rule in housing policy legislation to ensure that the unintended consequences of well meaning ideas do not further impair the vitality of this critical sector of the state economy.
Wright said the prompt attention of the Legislature to the recommendations could begin to restore the housing market right away, adding that the ripple effect of home sales is felt in businesses throughout the economy. According to preliminary research of the advisory group, every 1,000 home sales generates the following economic activity:
• $78.4 million of immediate economic activity preparing a house for sale and due to the purchase of home furnishings for up to six months after the sale;
• 20.3 million of direct economic activity for affiliated industries including financial institutions, home inspectors, title companies and agents; and,
• $26.9 million of induced, longer term activity.
“That’s a total of nearly $126 million in purchases and services generated as a result of the sale of 1000 homes,” says Wright. “Imagine what 12,000 home purchases would do for our state and our residents.”
The advisory group included the participation of three of Washington’s most respected economists: Dr. Kriss Sjolblom from the Washington Research Council; Dr. ChangMook Sohn, former Executive Director of the state Economic & Revenue Forecast Council; and Dr. Glen Crellin, Director of the Center for Real Estate Research at Washington State University. In addition to these distinguished economists and Realtor leadership, the advisory group included Scott Jarvis, the Director of the Washington State Department of Financial Institutions, and Kim Herman, the Executive Director of the Washington State Housing Finance Commission.
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For more information and for interviews, please contact Barbara J. Lally, Director of Public Affairs, 360-561-4848.
REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.
