Home Owners Insurance In South Carolina

Federal action key to real estate crisis, recovery

It's often said that the three most important things in real estate are location, location, location. But there's one particular location far removed from Greater Charleston where a number of key issues facing the real estate industry will be determined: Washington, D.C.

"The major housing issues in the country right now are all federal," said Ryan Castle, government affairs director for the Charleston Trident Association of Realtors.

Nick Kremydas, chief executive officer of South Carolina Realtors, an industry trade organization based in Columbia, agreed.

"Our national association says these next 100 days could be a real turning point, or a critical time when the government and these agencies failed to respond to the crisis," Kremydas said.

From homeowner's tax breaks to lending regulations and flood insurance, Washington holds the reins right now.

"This is by far the most extreme (time) in terms of the potential for changes," said Mikell Richards of First Federal of Charleston, president of the Mortgage Lenders Association of Greater Charleston, who has been in the industry for 18 years.

Here's a breakdown of the top three issues that, in addition to depressed prices and a scarcity of buyers, are concerning the real estate industry.

The issue: The federal government has long allowed homeowners who itemize deductions on their tax forms to claim a write-off for the interest they pay on mortgage loans for their home, a second home or a home equity loan. As part of the deficit-reduction negotiations, President Barack Obama has proposed limiting the deduction for those with the highest incomes, and the congressional deficit reduction panel is taking a broader look at the tax break.

The concern: A reduction in the value of the mortgage interest deduction would make homeownership more expensive, at least for some people. Those with inexpensive homes may not pay enough loan interest to claim the deduction.

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