Monday, February 06, 2012

MHEHF :: Chair's Message

July, 2010

We read that the recent G20 Summit in Toronto was marred by wide-scale protests. We all watch with concern and disappointment as BP’s well leaks millions of barrels of crude oil into the Gulf of Mexico as we all prepare for hurricane season. We see stock prices slide. Still, we hold hope for the Summit outcomes, for capturing the oil, and for the strengthening bond market.

As we start the second half of this year, it is a good time to reflect on the economy – nationally and locally. It is no secret that the real estate market and the transaction-driven world have suffered over the past 18-24 months. This is a capital-intensive industry and very sensitive to interest rate fluctuations, access to capital, and the restrictions placed upon lending institutions by federal regulators. Traditionally our community has been insulated from the dizzying heights and the gut-wrenching lows of some regions. The national economic slump has not had the impact here that has been felt by some urban regions, but we have definitely felt the slowdown.

When our Board traveled to Washington, D.C. for its spring educational conference, we were offered words of optimism couched in caution from HUD and Treasury officials as well as House Financial Services Chairman Barney Frank. We had been hearing that the economy would begin to rebound in the third and fourth quarters of last year. Since then, we have seen some signs of an upturn - foreclosures rates did drop, and the stock market saw very nice improvement. At the same time, there are many mixed indications – the market has been slipping for a couple of months, unemployment rates may not be ready to come down for some time, and commercial lending is still very challenging. Whether the recovery efforts of the federal government will bring the desired results is yet to be determined. What is certain is that there are lessons to be learned from the financial meltdown of the past 18-24 months and we need to all be resolved that we cannot let ourselves repeat the mistakes that brought it about.

As a Board, we hold steadfastly to the belief that we need to keep standards high. We want our existing and our future development partners to know that we are much more interested in keeping the bar high and helping you get over it, than in lowering it for the look and feel of short-term success.

With pro-active leadership in local elected offices, our Board will look forward to seeing what new collaborative initiatives can accomplish as we all try to work our way out of the financial downturn and make Memphis a better place to live.