Former Federal Housing Administration Commissioner William Apgar sees no reason housing can't remain the bright spot of the economy in the aftermath of the Sept. 11 terrorist attacks.
But market watchers and home buyers and sellers won't need pundits and prognosticators to tell them what's in store for the industry. All they have to do, he said, is look to "the order takers" who operate on housing's front lines to see what the immediate future holds.
Real estate agents, loan brokers and subdivision salesmen will have the answer long before anyone else, said the former HUD official, who has returned to the Joint Center for Housing Studies at Harvard University in Cambridge, Mass., where he now holds the title of senior scholar.
Apgar, who was at the Joint Center when he was tapped by Andrew Cuomo four years ago to head up the FHA, believes it's "too early" to know whether the attacks and the impending war on terrorism will cause would-be home buyers to change their minds.
"Many have pulled back, and have adopted a wait-and-see attitude" he said. "We're not at the stage yet where they've made a fundamental change. But the question remains, how long will they be out of the game?"
Everything else being equal, however, the former government housing official is one who thinks buyers won't be sidelined for long. While here are some signs of weakness, he said, the housing market remains "pretty much in balance."
Not only is housing performing well, he said, it's performing "beyond people's expectations. We still have a strong trade-up market, an active senior market and a powerful immigrant market."
If anything turns consumers from being skittish to being scared, it won't be an attack by Muslim terrorists, Apgar believes. It will be an attack on housing prices.
And right now, he sees no signs of any downward pressure on prices. Builders' inventories are in balance, so they won't be dumping unsold houses on the market at bargain prices, he pointed. And despite some slowdown in resales, the existing home market is extremely strong.
Even what happens in the stock market won't tarnish housing too badly, he said, explaining that while a decline in equities may be important psychologically, what happens to basic homes prices is paramount. "Most Americans have most of their wealth tied up in their homes," he noted.
People may "button up" for a little while, he said. But its one thing to postpone a vacation or not get on a plane and its another thing entirely to delay the purchase of something you've been aiming at for years.
"So in terms of their fundamental plans, I believe they'll come back. And when all this settles out, housing-centered activities sales, remodeling, furniture will remain strong."
Not everyone agrees with that prognosis, however. One who is surprisingly pessimistic is Angelo Mazilo, chairman of Countrywide Home Loans, one of the nation's largest lenders.
In an interview with National Mortgage News, Mazilo said he is looking for a 30 percent drop in sales in the near term. While he thinks homes priced under $300,000 should hold their value, he worried that those over $500K will not fare nearly as well.
For more articles by Lew Sichelman, please press here.
Published: October 1, 2001
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