Realtors remain optimistic despite slumping market
More than 200 people, many of them Realtors, packed the Cotillion Banquets in Palatine on Friday to hear speakers talk about the economy and what they can do to survive the current housing market depression.
University of Illinois economist Geoffrey Hewings, speaking to the audience, confirmed Chicago area housing sales were down 33 percent last year. Hewings said the housing downturn can be linked to the Illinois job market being down since its peak in 2000.
"One-hundred thousand jobs will be needed to reach Illinois' 2000 level," Hewings said. "The most important thing for the economy and for your industry is job growth."
In the post-World War II period, Illinois has never had a recovery from a prior employment peak that has extended beyond eight years, he said.
Hewings told the group although housing accounts for 5 percent of the state's economy, it has a direct and indirect impact of $1.5 billion.
And with 70 percent of the U.S. economy being consumer spending, any change in spending due to a loss in value of homes could have a large ripple effect, Hewings said.
As for whether the economy is in a recession, he said "none of us (economists) know completely." The downturn wouldn't be officially declared a recession until the economy has two consecutive negative quarters, and a recession could be over by the time it is officially acknowledged.
Realtor and Bankrate.com analyst Steven Levitt spoke to the group about home financing and stressed with home prices depressed, Realtors should be telling clients this is the time to buy low.
"This is the best time to buy real estate," Levitt said. "You have to look at this as an opportunity, not as a doom-and-gloom situation."
Realtors Association of NorthWest Chicagoland President Piero Orsi, a RE/MAX Showcase broker and owner, told the group he has been in four cyclical downturns of the housing market in his career and he predicts a turnaround in the current downturn.
"We've been in valleys before but some time the valley will have to come back up," Orsi told the crowd.
Orsi described the current housing market as being in the midst of a "self-cleansing" process.
"We're now paying for our mistakes," said Orsi, referring to liberal lending practices that got homeowners into financial binds and in some cases foreclosures.
Orsi said Realtors should keep up their confidence during this downturn, which he said gets overblown in the media.
"There are opportunities out there," Orsi said. "It is up to us in the trenches to change the mindset."