In the News, Atlanta Builders Promote Housing Turnaround
Frustrated that downbeat national reporting on the state of the housing industry was a turnoff for prospective buyers in its local marketplace, the Greater Atlanta Home Builders Association last week succeeded in using the news media to inform readers of prime home buying opportunities in the area.
“Our positive ‘Get Home Atlanta!’ public relations campaign was being overshadowed by national housing statistics reports,” said David Ellis, the association’s executive vice president. Housing in Atlanta has been down, but local builders haven’t been suffering nearly as much as their counterparts in more distressed parts of the country.
Looking to increase the sales numbers of its members, the HBA decided to launch a campaign to directly address the media’s inaccurate portrayal of the local market.
Leveraging the Myth Buster resources from NAHB, the association worked with a public relations firm to develop solid economic statistics and convincing information on why now is a good time for looking at what the Atlanta housing market has to offer.
“The PR firm really helped shape our perspective,” said Ellis. “Being outside the housing industry, they were able to keep us grounded and help us see what would make sense to the average prospective home buyer.”
That effort paid off with double coverage in the Tuesday, March 25 edition of The Atlanta Journal-Constitution.
The business section ran a national Associated Press story on an increase in existing home sales for February in which Ellis reported an uptick in model home visits in his market and price declines that have been milder than in comparable cities. “Buyers are starting to wake up to the fact that there are some great buys out there," Ellis told the AP reporter.
The media exposure generated by the remarks of Ellis to the press was expanded on the newspaper’s op-ed page by a fact-filled opinion piece authored by Steve Palmer, the association’s president and chief financial officer of Bowen Family Homes. In the article, Palmer urged leaders in Washington to get behind efforts to preserve the health of the nation’s economy by stabilizing housing.
Ellis said that feedback from the news coverage was immediate and positive — from both members and the community.
“The local news media are starting to use us as a resource to provide a local perspective to their coverage of national housing industry statistics," said Ellis.
Ellis added that implementing a quarterly press conference is another tactic that has been successful for the association.
"We ask economists from local universities and representatives from the mortgage industry, the board of Realtors® and the home building industry to participate," he said. "And we're careful to maintain our credibility and not sugar-coat the numbers — but we provide context and make sure our messages are heard."
Ellis said that after their most recent conference, The Atlanta Journal-Constitution ran a front-page story full of direct quotes from the panelists.
Members and local associations finding themselves in a similar situation as the builders in Atlanta can turn the situation around by employing information and resources from NAHB to combat negative media stories and restore the confidence of hesitant buyers. Click here to be linked to Myth Buster Resources.
For more information, e-mail Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447. For information on legislation, contact Michael Strauss, x8252.
Here is The Atlanta Journal-Constitution article that last week helped to generate positive buzz, establish local home builders as a leading authority on conditions in their market and outline a solution to harness the strength of housing to preserve the health of the nation’s economy:
Housing Industry Needs Congress' Help
Few can argue that the home building industry is a critical component of the economy, both in metro Atlanta and the nation as a whole. In fact, housing represents 15.2% of the U.S. gross national product. As housing goes, so goes the economy, and this statement has never been more accurate.
It was encouraging to learn Monday that the sales of existing homes rose by 2.9% in February, marking the biggest increase in a year and the first month-over-month rise of the annualized pace since July. But several key indicators pertaining to the housing industry show that we are on the brink of recession. The mortgage delinquency rate on all homes stood at nearly 6% in the fourth quarter of 2007, an all-time high. And the Federal Reserve reports home equity debt is greater than equity for the first time since 1945.
The housing contraction of the last couple of years is weaving its way through the entire economy, wreaking havoc on the credit markets and causing job losses. Nearly one in six jobs is connected with the housing industry in the metro Atlanta area. There were a reported 63,000 jobs lost nationally in February, the fastest falloff in the labor market in five years. Great concern also remains about the 1.3 million subprime loans that are due to reset this year where 165 of borrowers have been behind on their mortgage payments.
An additional impact is being felt by state and local governments that are losing money for their operating budgets as a result of lower property values and reduced tax bases. Roughly half the states in the country are facing serious financial difficulties linked directly to declining home values and the credit crunch.
National retail sales are being affected as well. Lower home prices prompt consumers to buy fewer TVs, digital cameras and other electronic equipment. Analysts note that, unlike many other products, electronics sales have weathered all downturns in recent years until now.
The message coming from the housing industry at this point is urgent, yet simple. Congress must move now to enact a temporary home buyer tax credit. This will pay huge dividends, with three immediate results: a stimulation of home buying activity, a drop of excess supply in housing markets and a halt to the erosion of housing prices and mortgage credit quality.
There are several other measures that lawmakers should take into consideration. The revitalization of the Federal Housing Administration would provide reasonably priced, low-downpayment mortgages to millions of home owners and potential home buyers. Comprehensive government-sponsored reform for Fannie Mae and Freddie Mac will enable these financial institutions to greatly relieve liquidity and inventory pressures in the mortgage credit markets, help stabilize home prices and boost consumer confidence.
An expansion of the mortgage bond program would help strapped borrowers refinance existing mortgages. Lastly, allowing tax-free withdrawals from IRAs and 401(k)s for the purchase of a first home would also be a tremendous boost for home buyers.
The voluntary industry-government approach to help stem the tide of foreclosures clearly is not working. We're still seeing hundreds of billions of dollars in write-downs, and there is great uncertainty in the private securities markets. The Bush Administration claims it is waiting until the stimulus package kicks in before doing more, but by then it will be too little, too late. We just can't afford to wait any longer. During the congressional recess, home builders will be setting up meetings with key members in their home districts to talk about the importance of moving ahead with legislation that will address this crisis and provide immediate relief.
The Fed has been our biggest ally and understands the gravity of the situation along with the need to stabilize financial markets and increase liquidity in the credit markets. Its first move was to back the acquisition of Bear Stearns, thus increasing the flow of funds to other banks squeezed for credit. Last Tuesday's decision to cut interest rates another three quarters of a point should help. We encourage the Fed to continue to assess the need for further rate cuts as they help spur growth.
It is the Fed and Congress we turn to as they hold the keys to averting a national recession and placing momentum back into the housing industry, one of the vital engines in the U.S. economy.