BuyingCommentary March 7, 2013

On Hovercrafts

HovercraftI was fortunate enough to be quoted in Business week in an article entitled Why Redfin, Zillow, and Trulia Haven’t Killed Off Real Estate Brokers.  I spoke with the reporter for what seemed like a good healthy duration on where technology is taking our industry, the significance of its impact on the consumer experience and how licensees ply their trade, and the canard that access to information will somehow render real estate licensees redundant or irrelevant. After all that, here is the one quote that made the piece:

“We will never be a point-and-click industry…You will always need a trusted adviser to ensure that you get the best terms possible. The stakes are so high. If you want to do a do-it-yourself project, build a hovercraft.”

Now, I have said that 1000 times, but the other 999 times I have said or written it, I said “if you want a do-it-yourself project, build a go-cart.” The one time I say it with hovercraft, it makes the media. 

And my friends all picked up on the hovercraft thing. 

Hovercraft do exist. Not just the science fiction kind, but the ones you build at home from a kit. I used to see the ads for them in the back of Boys Life and comic books, and I think they require parts from a vacuum cleaner. I don’t know. I was more of a sea monkey kind of guy. 

But I have seldom felt so strongly about something as to the importance of having a trusted adviser in what is typically the largest transaction of one’s life. The median price for a home in Westchester is about $600,000. Assuming a 20% downpayment and a $480,000 mortgage at 4% interest, the total payments over the life of the loan are just over $825,000. But it doesn’t stop there. The taxes, conservatively in today’s dollars at $15,000 annually, would total another $450,000. The home insurance at $1200 annually would be another $36,000. Add in maintenance, improvements, a new roof and furnace along the way, updates, and you could spend another 6 figures easily over the life of the loan. Staggering. And I didn’t even add inflation or rising taxes. 

One might think I am a lousy broker for scaring off potential buyers with those numbers, but the truth is that you have to live somewhere, and that somewhere is never free. The numbers are uglier for renters, because you spend almost the same money over time, with no tax benefit (Call a CPA. I am not giving tax advice. This is a muse. Hovercraft, dammit), and at the end of the term you have no asset and  no equity. Living is expensive. But it beats the alternative. 

Regardless, you never undertake that kind of a project alone without some experienced advocacy to help guide you. Not all agents are created equal, and I have always stressed to consumers that they should choose their representation wisely. 

But do have representation. Jokes, hovercraft and sea monkeys aside, real estate should never be a do it yourself project. 

Uncategorized March 7, 2013

Latest Stats Out of Philly Main Line

As the data below indicate, all is well in Villanova, Pa. I don’t hold a real estate license there, but a chunk of my heart remains. Go Wildcats.
—————–
 
GEORGETOWN
 
VILLANOVA
 
Points 57 67
FG Made-Attempted 23-50 (.460) 16-34 (.471)
3P Made-Attempted 7-18 (.389) 5-10 (.500)
FT Made-Attempted 4-8 (.500) 30-42 (.714)
Fouls (Tech/Flagrant) 27 (0/0) 12 (0/0)
Largest Lead 7 12

Game Leaders

 
 

GTWN

 

VILL

Points O. Porter Jr. 17 J. Pinkston 20
Rebounds N. Lubick 9 M. Yarou 12
Assists N. Lubick 5 R. Arcidiacono 6
Steals N. Lubick 2 J. Pinkston 5
Team Stats: Georgetown | Villanova

(5) Georgetown 57

(23-5, 13-4 Big East)

Villanova 67

(19-12, 10-8 Big East)

 

1 2 T
#5 GTWN 29 28 57
VILL 33 34 67

Top Performers

Georgetown: O. Porter Jr. 17 Pts, 4 Reb, 5 Ast, 1 Stl, 1 Blk

Villanova: J. Pinkston 20 Pts, 4 Reb, 5 Stl

Market Statistics February 28, 2013

January 2013 Westchester Real Estate Market Shows Health

Forget the fact that I’m busy. Forget the fact that we are seeing multiple offers far more frequently. Never mind that we have more buyers looking, more sales pending, and more offers being made. Ignore the 5 new construction listings the company now carries, which is an all-time high. Those are all anecdotal examples of the market stabilizing. The real good news lies in the statistical data: more homes are selling for more money than they were a year ago, and not by a little. According to the Hudson Gateway Multiple Listing Service data for single family homes, January 2013 was far healthier than January 2012.

How much better? I’m glad you asked.

For the first month of 2013, 256 single family homes closed, up from 219 a year ago. That is an improvement of  17%.
Median price for those homes sold in 2013 was $522,500, up from $485,000 in January 2012. That is a 7.7% rise in median price.

There are still too many distressed homes, upside down mortgages, short sales and shadow inventory to be dancing in the streets.

But there is no longer any blood in the streets.

Amen.

#Precovery

Company NewsIndustry News January 30, 2013

Jenn Maher Joins J. Philip Real Estate

Jenn MaherIt is with great joy that we announce the addition of Jennifer Maher to the J. Philip Real Estate family. Jenn is among the most respected and admired names in the Westchester and Putnam real estate community. She is a current Vice president of the Hudson Gateway Association of REALTORS,  Chairperson of the Putnam Chamber of Commerce, has run her own firm, and, by the way, sells a ton of property. Perhaps most impressive to me is the loyalty of her clientele; it seems that many of the deals she works on involve someone she has served in the past. That speaks volumes.

I met Jenn six years ago when we collaborated on a deal that actually never closed- the challenges on both sides of the transaction were considerable, but I had my first experience with the aplomb with which she handled obstacles. We have remained friends ever since. It is easy to do that when the other person is so engaged with association involvement, gets the power of social media the way Jenn does, and always participates (and sometimes organizes) in educational events to help stay ahead of the curve. Her energy, involvement and hyperactivity have always struck a chord with me.

Outside of the industry, Jenn is as much a Renaissance Woman as she is in uniform. A native New Yorker, she’s a supermom, dog lover, hugely active in philanthropy and community, and terrific writer. While I kid her for never taking a bad picture, Jenn is incredibly cerebral and profound; the lens she sees the world through has always spoken to her great intelligence and grasp of the Big Picture.

Jenn’s role will be that of Associate Broker and Director of Development. She will run the commercial division, fortify our presence in Putnam County, and spearhead the growing of the team. Her joining us signifies to me that this is a special place; we are not another independent or boutique. We are building something special here, and will not just be a place where people hang their license. This enterprise should be an example of where real estate should be for consumer experience and as a place to practice the profession at it’s highest level.  This firm will be built with powerful women. That is my intention, and why I am incredibly honored that she chose this firm as her home.

 

Jennifer MaherRarely do great beauty and great virtue dwell together.
Petrarch, De Remedies

 

 

Commentary January 12, 2013

I Am No Middle Man

 

A recent client's very apros pos token of gratitude.

A recent client’s very apros pos token of gratitude.

AGBeat has an interesting article on how technology has eliminated many “middle men” from their respective industries, but that real estate brokerage has not been among the victims. It is a well done piece, and I agree that technology will never replace agents for many reasons. However, I do take issue with one thing: The term “middle man” does not apply to me. I am no middle man.

“Middle man” implies an intermediary that stands between the consumer and the good or service who adds their fee without bringing lots of value. That isn’t me, and it isn’t any one of my agents. And that goes for the vast majority of my industry.

Real estate is not a point and click transaction. The proliferation of data and access on the Internet may have destroyed travel and brick and mortar book sellers among others, but those exchanges last a few minutes and end with entering a credit card number. However, real estate transactions begin weeks and months before the deposit. They also do not conclude until 60 to 180 days later (as in the case of short sales) at the closing. There is no similarity to any other piece of commerce.

Often, I will not conclude a transaction with a client until 6 months or a year after my first contact with them.

In the case of a seller, I have given them exhaustive research for pricing, the key to my Rolodex for resources in lawyers, title, contractors, stagers, inspectors, and other trades, and many man hours of time and advice. I have been the general contractor overseeing renovations on property to complete repairs, bring homes into compliance, and getting the home ready and presentable for sale before it saw 1 day on the market. I did it all for free, because I don’t get paid unless and until that home closes. And yes, there have been rare cases where I did all that, the people didn’t take my pricing advice, expired unsold, didn’t renew with me, and then listed with another broker at the price I recommended, selling in short order.  Even if I sell a home in a week, I can guarantee that the work started long before that, in some cases years. Middle men don’t do that.

I have communicated with buyers for months before they were ready to actually look for homes. I have helped them repair their credit. I almost always help them with mortgage resources who have gotten them the very best home loan terms available on the market because, after 16 years in this business, my contacts would make the King of Siam envious. I have put walk through videos on Dropbox for out of state prospects so they’ll know if they should fly in or not. And yes, there have been buyers who have ridden in my car for months, seen dozens of homes with me, and not closed either because they had a change in life circumstance or bought through another broker in different conditions. My pay in those cases was always the same: Zero. That  isn’t a complaint. It is also something middle men don’t do.

And when the right place for my clients is found, the work really starts. I have advocated, sleuthed, investigated,  negotiated, and worked on behalf of my clients for months from accepted offer to close to ensure that the mine field of home inspection, title, contact, mortgage, appraisal and hundreds of other things concluded to their best interests. Middle men don’t do that.

With over 340 sets of clients in transactions valued at over  $140 million, I have remained available for free, as a resource, trouble shooter, and friend. Middle men don’t do that.

Oh. And I have a skill set that only comes with that experience. I look millionaires in the eye the same way I do with regular Joes. I have exercised the patience of Job with other agents in many circumstances, many of whom tough counterparts for a variety of reasons. I have gone toe to toe with lenders loss mitigation departments at huge banks in short sales. I have matched wits with attorneys who think that their JD, and not the facts, put them higher on the food chain than I am. 

All too often the outside eyes looking in judge a broker by the amount of labor they do to the naked eye. There are few metrics for knowledge, communication and a thousand other skills that are not rooted in “doing” but “being.” That goes for many things, including calls, emails and texts late at night.

I am a trusted adviser in what is typically the largest transaction of one’s life as an advocate, fiduciary, sounding board and friend. I am no middle man.

Market Statistics January 7, 2013

2012 Westchester Real Estate Market Wrap Up: Strong Finish.

New Construction for $674,914. New Starts are another positive sign.

More homes sold because prices same down.

That would be one clear message in looking at the December sales figures for single family homes on the Hudson Gateway Multiple Listing Service in Westchester County. Transaction totals were their highest in six years with no special stimulus and buyer appear to be returning to the market in stronger numbers. Overall, 2012 was considerably busier than the prior year, and again posted the highest closing tally since 2007. There is reason for optimism looking forward to 2013.

The totals are as follows:

In December, 2012, 376 single family homes closed at a median price of $557,250.
In December, 2011, 278 single family homes closed at a median price of $542,900.

That is a gigantic 35% leap in transactions, and a modest 2.6% rise in median price for the month.

For the overall year of 2012, the totals were 4476 homes closed at a median price of $587,000.
For the year 2011, 3,842 single family homes closed at a median price of $600,000.

That is  a 16.5% increase in closed sales and a 2.2% drop in median price for the year.

Median price is still down six figures from the peaks we saw in 2005 and 2006, and it could be a decade or more before we return to those values. However, that, along with the low rates and pent up demand of a stagnant market for over 5 years, is probably the very reason why more buyers performed in 2012 than so many years prior. With values at this level tens of thousands of homes in the county probably remain underwater. We are, therefore, a long way away from anything resembling a robust seller’s market. The numbers do point to the infancy of a recovery, or a “precovery” as I have written before.

Looking forward in the first quarter of 2013, we seem to be hitting the ground running. Inventory numbers show 2,469 active listings for sale at a median list price of $639,000. Of greater import is that  785 homes are under contract for purchase at a median list price of $585,000. While there is no doubt that the consumers are trending toward lower cost homes when given the choice (and who can blame them for being more cautious?), that is a strong number of pending deals at this point in the year a week removed from the holiday season (or a day, if you count Epiphany).  What we are seeing is the market striking a balance between a decent number of choices for buyers but not enough to give them the leverage they possessed in weaker prior years.

If 2013 continues the pace I will talk of the R(ecovery) word. Until then, I’ll remain cautiously optimistic. The overall economic status is fragile, and as long as the government does not do anything stupid like repeal the mortgage interest deduction or end the debt relief act for short sales, we can go from crawling to walking again.

 

Company News December 31, 2012

State of J. Philip Real Estate 2012 Edition

With 2013 mere hours away I am pleased to close the books on another successful year that saw the company weather the challenges of the changing market and continue on the path of encouraging growth. We eclipsed some goals set in last year’s end of year report, fell short in others, and are set up for a strong new year. At the risk of sounding brazenly self aggrandizing, there is an awful lost of positive to note as we build the brand.

Out of about 900 member brokerage firms in the Hudson Gateway MLS, our company was ranked 53rd in closed transactions, putting us strongly in the top 6% of brokerages for that metric. Last year I was about  two thirds of the company production and my goal was to be less than half in 2012. I reached that goal. For the first time since founding the firm in 2005, I was not the majority of company dollar volume. I still closed well over 30 transactions, but the team’s continued growth and improvement eclipsed my own production for the first time. This was important to me. In building an enterprise, it is crucial that the company, and not just one person, has strong production. My goal in 2013 will be along the same lines: I am committed our rankings improving, and I want to be one third or less of the production personally.

Our team has indeed grown and reached some rewarding benchmarks. First, we have expanded to 34 agents and associate brokers. The growth of the team included the addition of our first ever Vice President, Angela Johnson, who joined us in July to assist in implementing systems to better run the organization and spearhead the hiring and development of new associates. I remain at my teams’ disposal 100% as well. I have the greatest respect for Angela and greatly value her contributions thus far.

2012 also saw the revamping of the company website and my personal blog. The new jphilip.com unveiled in March has averaged about 20,000 page views per month and made a huge impact on developing new clients and customers for the team. My own self hosted blog was also rebooted in March, and the feedback has been rewarding. It remains one of the firms’  best assets. Our web presence has always set us apart, and that will continue with the upgrades.

In July, the firm was awarded membership into Westchester Real Estate, Inc., the area’s most prestigious and highly regarded consortium of independently owned brokerages. This is an achievement that I am incredibly proud of.

I was also among 20 agents selected nationwide to be part of  Zillow’s  Agent Advisory Board. We had our first meeting in September, and I believe that the group is making a difference. It is an incredible team of industry leaders, and I am also impressed with Zillow managements’ desire to do right by their premier agents.

2013 will begin my 4th term as Vice President of the Hudson Gateway Multiple Listing Service. The New York Association of Realtors has appointed me as the 2013 vice chair for the bi-annual Technology Forum, and I remain a state director on the MLS and Technology committees.

The year was not without setbacks. Not every goal was reached. Deals fell through. New hires didn’t work out. But overall I remain humbled at the incredible men and women who have chosen my firm to their professional home, and I will make sure that in 2013 we exceed their expectations. This much is for sure: as I look over the results of the soon to be closed 4th quarter, it is clear that the first quarter of 2013 is set up to be extremely productive. We will absolutely hit the ground on January 1 running, and I have over 30 incredible people to thank for that.

The takeaway for the consumer is clear to me: companies grow and contract for a reason, and we remain committed to learning, development,  being our best, and getting the best results for our clientele. That is why we grow.

Commentary December 31, 2012

Why the Journal News was Wrong About Publishing Gun Owner Information

In the aftermath of the Journal News’ recent publication of the identity of every handgun license in two counties, their claim that it would be good for starting a dialog on gun ownership is proving to be very wrong. There is discussion, not about guns, but about privacy and what constitutes responsible use of public information. On a personal level, I feel far more vulnerable as a non-gun owner than I did a week ago. It is now easier to find me and target my home and family.

The defense the Journal News offers hinges on the fact that the data was public. But what the editors do not distinguish is the difference between making information available and crossing the line and aggregating that information. The JN is not an almanac. They did not report news. They made it.

Here’s why.

I am a real estate broker. I am also a member of the Multiple Listing Service and have access to that database. The MLS has records of every home in 5 counties via a direct link to public records. Just by knowing your name or address, I can typically tell you what you paid for your home, what mortgages have been recorded on it, and if there are other liens or judgements on the property. It is all in public records, but the non licensed person would only have access to that information by going to the county clerk or paying a website for access, which can be pricey.

If I were to exploit my access to this information and publish on my blog, for example, everyone in Westchester with a mechanics lien or mortgage default, the backlash would be justifiably significant. My job is to use that information to serve clients, not enrich myself by distributing it. Information can be abused. Access does not make it right to aggregate.

I’ll repeat that: access to public data does not make it right to aggregate and mass distribute that information.

In a society where property records and property ownership are transparent, that access to public records is a public good. However, that doesn’t mean that access gives me or anyone else the right to distribute that information to anyone who would not otherwise seek it through the regular channels. All that does is feed the least common denominator who neither went to the clerk’s office nor paid a reputable source for it. The same goes for gun records.

The cynical side of me makes me wonder if this was all just a ploy to be relevant. I haven’t subscribed to the Journal News in years and stopped frequenting their website when they introduced the paywall. Now the publication is discussed coast to coast. Unfortunately, the discussion is not about gun ownership. It is about the paper’s decision to distribute the data.

In an era where we all hope and pray that the 26 lost souls in Newtown did not die in vain, that is a very sad thing indeed. In light of their promise to publish the data on Putnam County, we should also remind them that their job is to report news, not be the news.

Just one last thing: I may not be in the database of handgun licensees (for now), but we do have a 95 pound German Shepherd.

 

Commentary December 23, 2012

Mark Zuckerberg is the John Wilkes Booth of Privacy

As a guy who is required by statute to respect the confidentiality of those who hire me, I can only shake my head at the violence done to online privacy by the current wave of popular Internet platforms. I don’t recall much of a hubub about privacy in the days that widespread use of the web was relatively new in the 90’s;  “netiquette” and admonishments to never give out personal information were the rule of the day, and my biggest headaches were spam and discussion group trolls on the old NY Yankee message board. But as the children of that era grew up and the ads in my sidebar began to eerily reflect the content of my writing, it became clear that privacy was flat-lining.

I place the blame squarely on the shoulders of the Mark Zuckerbergs of the world. I cannot expect a 20-something to share my mid 40’s world view. But they can listen, and I don’t believe that Mr Zuckerberg does. I think he is focused solely on short term figures while he is putting out fires like the Facebook IPO headache and recent Instagram debacle, where the idea of  good faith took a serious body blow. But beyond that he has such a deaf ear to Facebook users that it is sad. I do understand this (but I don’t excuse), because when I was 25 my concept of privacy was little more than making sure the men’s room stall was closed.

I didn’t get medical privacy because I was healthy.
I didn’t worry about my children’s likeness being in the wrong places because I had no children.
I didn’t worry about online privacy because when I was Mark Zuckerberg’s age a cookie was something you ate.
I didn’t get financial privacy because I was broke.

Interestingly, on that last point, when I was 28 an irate neophyte  landlord crossed the line the day I moved out of my apartment. He boiled over in anger over some minor damage to plaster walls, and, in front of my brother, groused how betrayed he felt that I caused damage in the apartment after giving me a chance with my bad credit and all. The damage was probably $50. But I couldn’t get over his big mouth (especially in light of the fact that my credit was actually about average for my age). He deliberately embarrassed me, and I never forgot the incident. It was one of those life experiences that I seriously doubt Mark Zuckerberg can relate to.

Perhaps the biggest casualty of the Zuckerberg culture is the wave of younger people with a voice who, like Mark himself, just don’t get it, because they have no experience How could they?

Take for example a minor phenomenon from this past summer when recent Iowa grad Cathryn Sloane got criticized when she wrote an article entitled Why Every Social Media Manager Should be Under 25. The article generated over 600 comments, the vast majority of which ranged from critical to enraged, and thousands of shares across the ‘Net. While privacy was not a topic, the myopia that comes with lack of perspective was center stage. In Ms Sloane’s case she has more or less disappeared, which is unfortunate because I think she meant well.

More emblematic of the problem is Sam Biddle of Gizmodo in his rant Stop Whining About Your Personal Data on Instagram You Little Whiny Baby. In it, the 2010 Johns Hopkins grad basically tells us all that our photos suck,  Instagram has to make money, and that’s how capitalism works, so eat it.

I am a capitalist. Sam Biddle is wrong. One of the basic underpinnings of capitalism is good faith, and Instagram’s unilateral terms of service change-since revoked- urinated on that idea. Privacy was another casualty. Instagram tried to annex private content, and were it not for the backlash I could see photos of my children meant only for the eyes of select friends out in the open, with no attribution or compensation. That makes my old landlord look like Santa Claus. And guess who owns Instagram? Mr Zuckerberg’s Facebook. Instagram recanted, not because they listened to users, but to their bottom line when high level accounts like National Geographic went dark.

I would bet my own good faith capitalist money that Mr. Zuckerberg will have a far different attitude about privacy the day he becomes a father. I’d like to know how he’d feel if he saw his child’s likeness in a sidebar ad. We’ll see how he feels when he’s older and sees a pharmaceutical ad above his email for a medical matter he’s dealing with. I’d love to be a fly on the wall when he posts a photo of his family out to dinner and it defaults to geo-locating him and some whack job accosts him.

The crux of the matter is default settings on social media that require elaborate opting out of disclosure rather than opting in. And the culture it has created is philosophically at odds with the prevalent attitudes when the Internet rose to prominence. This is unfortunate, because those of us who are older and wiser are forced to deal with the ignorance and sass of younger users like this comment screenshot on a video where Zuckerberg hems and haws like Ralph Kamden when addressing privacy.

What these people don’t grasp is that it wasn’t always that way. Privacy was valued. It was expected. It was a promise. Were we naive? Perhaps, but we weren’t an exhibitionist generation either, where everything we did or saw found itself on social media from childhood on. As demographics change and Gen-Y becomes more influential, privacy will hurtle toward extinction because those killing it never knew to value it. For this I blame Mark Zuckerberg, because he did more to create a generation that marginalized privacy more than anyone else. And he didn’t listen. 

That is too bad because listening would be good for business. The majority of people buying and selling Facebook stock aren’t 25. And I know slews of people in theirs 30’s to 50’s  who eschew Facebook and most social media because they don’t trust it. These people were early adapters of AOL and other earlier platforms. They have discretionary income. They are tech savvy. But they aren’t going to play in Zuckerberg’s sandbox. Perhaps someday Facebook will wake up and learn that good faith, respecting privacy and doing the right thing are the best ways to do business. I get the feeling right now he’s just listening to his own headlines, not realizing that the media loves one thing more than building you up, and that is tearing you down. If I were Mark Zuckerberg I would start to seriously listen

Mark Zuckerberg gets hot under the collar over your privacy issues and sweats

http://www.youtube.com/watch?v=o3hu3iG8B2g
CommentaryMarket December 19, 2012

In Defense of the Mortgage Interest Deduction

The chatter on the Interwebs lately is that a law that has been sacrosanct for generations, the right of a homeowner to deduct their mortgage interest on their income taxes, is now in jeopardy due to the fiscal cliff we collectively face in the wake of the Recession. 

What a shame.

It is a shame for many reasons, not the least of which is that politicians, in their passion to get reelected, will fix anything that isn’t broken to say they did something. It is a shame because many of my own colleagues, a measure of whom are in low cost markets where they would personally be unaffected, are ambivalent about a change in the law.

The mortgage interest deduction (MID) has been in place since 1913. It has enabled generations of Americans to secure their futures. It is a promise in place that has been the incentive for millions of current homeowners to buy. I’ll restate that: The mortgage interest deduction is a presupposition that millions of people counted on to make the 6 and 7 figure decision to buy their current home. It factored onto choosing to own, what price to pay, and what community to choose. Taking it away breaks a significant promise.

What most people do not realize is that when they buy a house with a 30 year mortgage, they pay twice the amount of their loan over that period is just interest. Forget the current rates; they are a blip. If you bought a house 5 years ago at a 5.5% rate and borrowed $300,000, you’d pay back $613,000 back not including your property taxes. That is $313,000 in interest. When rates inevitably raise again from the current anomaly, people could pay back triple, not double, their principal due to interest.

In the above example, a borrower in a 25% tax bracket would pay roughly $16,000 in interest their first year and be able to save $4,000 in taxes (for clarity, speak to a CPA. I don’t advise on taxes. To say the numbers are perfunctory is an understatement). Some politicians see that and salivate. Some holier than thous scream an unfair subsidy. They are mistaken. That deduction is a 100 year old promise, and that homeowner puts that money right back into the economy- they buy lawnmowers, put on new roofs, update the bathroom, and thousands of other things that have made strong home ownership the cornerstone of a stable economy.

That is not my hot air. It is a fact. Don’t take my word for it, take Franklin D Roosevelt’s. One of FDR’s enduring legacies is the Federal Housing Administration, because even the liberal FDR knew that the get out of the Great Depression, housing had to be strengthened. FDR wouldn’t support removing the MID, not did Truman, Eisenhower, JFK, LBJ, or anyone else that followed. And for good reason. It was never part of the problem. The MID didn’t cause the crash, and indeed enabled more people to stay in their homes when times got tough.

Removing the MID not only breaks our word as a society, it destabilizes housing, which is the reason the whole Great Recession started in the first place. Removing the mortgage interest deduction puts millions of people counting on that money thousands of dollars behind, creating more distressed borrowers and cutting off commerce from other sectors because the money that would otherwise circulate is no longer there. And the distress caused for current home owners doesn’t even speak to the repercussions on those who might otherwise buy. Affordability would be lowered. Tax advantages would be undermined. The buyer pool would shrink. Values would decrease. Foreclosures would increase. Sound familiar?

If there is anything we should have learned from the past 5 years it is that a stable housing market is necessary for a stable economy. Disrupt housing and you get a hot mess. Those who are old enough to recall the 3 headed monster of the late 80’s and early 90’s will see a parallel: The Savings and Loan crisis, a Wall Street crash, and then a housing bust lead to a recession from which all too few lessons were learned. The MID was not on the table then; The FDIC absorbed the FSLIC, freely assumable FHA mortgages were converted to requiring approval, and the economy improved incrementally. Ability to buy and keep was never touched. No recovery ever touched it. We should not change that.

We should learn from history, not tempt fate. If anything, housing should be strengthened and bolstered to ensure stability going forward, and not viewed as a kettle from which money can be dumped into the great vacuum of government. Preserving the mortgage interest deduction will keep housing, and a sustainable recovery, stable.