Importance of the Real Estate Market
Michael understands the integral role real estate plays in the U.S. economy. Residential real estate provides housing for families. It's often the greatest source of wealth and savings for many families. Commercial real estate, which includes apartment buildings, create jobs and spaces for retail, offices and manufacturing. Real estate business and investment provide a source of revenue for millions.
In 2017, real estate construction contributed $1.07 trillion to the nation's economic output. That's 6 percent of U.S. gross domestic product. It's less than the 2006 peak of $1.195 trillion. At that time, real estate construction was a hefty 8.9 percent component of GDP. Real estate construction is labor intensive. That's why a drop in housing construction was a big contribution to the recession's high unemployment rate.
Construction is the only part of real estate that's measured by GDP. Real estate also affects many other areas of economic well-being that aren't measured. For example, a decline in real estate sales eventually leads to a decline in real estate prices. That lowers the value of all homes, whether owners are actively selling or not. It reduces the number of home equity loans available to owners. They will cut back on consumer spending.
Almost 70 percent of the U.S. economy is based on personal consumption. A reduction in consumer spending contributes to a downward spiral in the economy. It leads to further drops in employment, income and consumer spending. If the Federal Reserve doesn't intervene by reducing interest rates, then the country could fall into a recession. The only good news about lower home prices is that it lessens the chances of inflation.
Georgia Association of Realtors Supported Legislation:
HB 410 HOA Letter Fees: (Rep. Smith voted Yes)
Current Law allows a Homeowners Association to charge $10 for a closing letter. In practice, however, many HOAs and third-party management companies are abusing the law by charging additional fees.
Such fees have various names (processing fee, convenience fee, expedited service fee, etc.) and they often far exceed the $10 charge. The consumer bears the burden of these additional fees and is only made aware of them at the time of closing.
HB 410 seeks to more clearly define the intent of the closing letter by identifying a disclosure list of specific items necessary for closing while eliminating unnecessary additional fees. It also establishes a timeframe for production of the letter, thus removing undue surprise at closing.
The allowed charge for production of the letter will be raised from $10 to $100 in acknowledgement of HOA and management company costs associated with adherence to the disclosure list.
HB 661 Tax Liens (Rep. Smith voted Yes)
Improves efficiency of deed recording and fixes unintended consequences of the 2017 State Tax Execution Modernization Act.
HB 204 Property Tax & Non-Tax Fees (Rep. Smith voted Yes)
HB 204 (as passed by the House) will require local jurisdictions to separate property tax billing from non-tax fees/assessments (such as solid waste services) and to prioritize payment of property taxes.
This separation and prioritization are important to protect the property owner from potential liens resulting from non-payment of fees.