Cleveland HBA takes a stand for NEO homeowners and builders in the U.S. Capitol

The Home Builders Association of Greater Cleveland recently took a progressive stand to turn the tides on homeownership and home building in Northeast Ohio. The executive board of the Cleveland HBA recently met with Washington representatives to share a united voice on what needs to happen to bring stability and growth back to our community.
“We convened at the National Association of Home Builders in Washington D.C. with 450 to 500 other builders from across the nation. Everyone shared information about their own particular regional issues, as well as the broad issues that impact communities across the United States,” said Enzo Perfetto, vice president of the Cleveland HBA and manager of Enzoco Homes.
“We went to Washington to argue as much for new housing, as well as existing housing. We do realize that there is a glut of existing homes out there. Many of those deals are very attractive, so customers vacillate between new construction and the existing inventory. But until that existing housing starts to see some movement, the new construction isn’t going to take place.”
The executive board of the Cleveland HBA met with:
• Congressman Steven C. LaTourette
• U.S. Representative Betty Sutton
• Congressman Patrick J. Tiberi
“All of these representatives were very well informed on who they were meeting with. They were aware of the issues at hand. Our focus was on the big picture. How do we get this to work again? How can we get the system to function?
“Housing is a very big issue! Housing impacts the Gross Domestic Product between 15 and 17 percent. And it’s more than just the 2-x-4s and the windows. It’s the work boots that you buy at Walmart, the GMC truck that you buy, the subs that the contractors purchase for lunch, and much more. So if you take the full extrapolated amount, it’s very astonishing how our industry effects the economy. And it’s one of the products that is truly made 100 percent in the United States. You cannot outsource the building of a new home. So we employ people in this county,” Perfetto stated. 
The issues addressed
According to Perfetto, the broad issues are obvious. They include:
• The lack of financing for builders to build and homebuyers to purchase homes.
• The appraisal process.
• The proposed mortgage rule for homebuyers.
“What I want people to understand is that the HBA is more than an organization that focuses on builders and issues that affect home building. In reality, we went to Washington D.C. on behalf of all housing. This affects existing homes, as well as new construction. The free-flow of financing, the ability to get credit, and the inaccurate appraisals, which are prohibiting sales, were our key talking points. Yes it affects new-home construction, but new-home construction is affected by the existing housing inventory. If there isn’t a free flow, then there is bottlenecking in the system and it doesn’t work for anyone.”
Financing
Perfetto feels that there may be too much government intervention regarding financing.
“Maybe a part of the problem is that regulators are telling banks when they can and cannot make loans to builders and buyers. The 4.5- and 5-percent interest rates aren’t doing anyone any good if you can’t get approved for the loan or don’t have a job. Lower interest rates are not always the best scenario. You want interest rates that are sustainable at 6 or 7 percent, because that’s a sign of a healthy economy. Low interest rates are usually a sign of an economy that has issues,” he indicated.
“You also want to ensure that financing is being approved for those who can afford it. Those are individuals who are good stewards of their money and who practiced responsible savings over the years. That doesn’t fit everyone,” he said. 
Appraisals
Appraisals are also having a huge impact on housing.
“What we surmise is that the pendulum has swung way too far to the other side,” he indicated. “What the government is trying to do is overcorrect the problem. So what’s happening is that appraisals are coming in much lower than what most professionals feel are reasonable. When you start bringing in foreclosures and things of that nature as comparables, it really brings down the value of neighborhoods. It’s a vicious circle that really needs to be addressed. How do you grow value back up when you keep using foreclosed homes in the appraisal process? It’s bringing down homes that are not under water, and those owners are having a difficult time selling their homes. And the system just keeps spinning downward.”
That is the premise that the executive board conveyed to Ohio’s U.S. House and Senate representatives.
“The big picture is that they need to give buyers, sellers, and builders a little more credit. We are probably the best stewards of our money. We don’t constantly need government intervention to fix the problem. A lot of times it is too much government intervention. You just need to let the free market work. I know what my house is worth, you know what you want to pay for a home, and we meet somewhere in the middle. That’s the beauty of what our country was founded on. Unfortunately, they are trying to correct a problem that they may not have seen in the past. Their methodology is really just bogging the system down. And the more the system bogs down, the higher unemployment goes because it curtails construction and residual business. It’s just perpetuating the problem. You’re not going to trick someone into buying a home. They know what the value is,” said Perfetto. 
This is specifically true in Northeast Ohio, according to Perfetto. Northeast Ohio did not have the run up that was seen on the West Coast and in Florida. Northeast Ohio is a very conservative housing market. 
“The appreciation has been between three to five percent, and we haven’t seen the falloff in values. What is really hurting us is the foreclosed homes.
“Our goal was to shed some light on the issues from those who are on the street every day. We wanted our representatives to understand those issues. And they were very open and responsive. Many of them really didn’t realize how severe the problems were.”
The proposed mortgage rule for homebuyers
The government is currently looking to eliminate the interest deduction for home owners.
“We are very strong opponents of that. You do not want to take away any incentives or do anything that will further decline home ownership,” he indicated. Homeownership has always been the backbone of America.” 

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