Dan Ariely, James B. Duke Professor of Behavioral Economics, Duke University; Visiting Professor, MIT's Media Laboratory The positive spin on negative numbers is something those in the many industries have become accustomed to as of late.

Larry Mizel, Chairman and CEO, M.D.C. Holdings; Conference Chair, Big Builder '08

"GM sales are down 47%, for the month. I guess they had a good month," said Larry Mizel, M.D.C. Holdings CEO and chair of Big Builder '08, to the crowd at the conference's opening night Nov. 3.

Mizel's address, in which he urged attendees to visit www.FixHousingFirst.com to do their part in urging Congress toward an improved housing stimulus package, preceded an Economic Roundtable to kick off the three-day event.

Dan Ariely, professor of behavioral economics at MIT, opened the evening with a keynote address regarding the predictable ways in which consumers behave irrationally?a point he was able to later link to comments made by fellow panelists Eric Belsky, executive director at Harvard University's Joint Center for Housing Studies, and Tom Block, senior vice president for government relations at JPMorgan.

Industry leaders are sure to understand Ariely's comments with the current housing crisis, and thoughts of uncertainty were only paralleled throughout the evening in regards to what will bring the market back.

"Housing is what lifts the economy," Belsky said. "But things need to happen that just aren't happening." He pointed to interest rates, continuing losses, and still rising foreclosures as reasons why a stimulus package is necessary to boost housing and get the economy back on track.

Tom Block, Senior Vice President, Government Relations, JPMorgan

But the biggest problem the home building industry faces, according to Ariely, is trust.

"The stimulus plans need to have a trust building aspect," he explained. "We have to restore trust because, without it, the stock market will keep bleeding for a long time."

A stimulus plan that has been on the minds of many in the industry is Fix Housing First, which advocates a $10,000 to $22,000 tax credit with no repayment provision for purchases of all primary residences, both new and existign, with the provision that the credit would be incrementally re-paid to the government should the home buyer sell within three years. This tax credit would replace the existing $7,500, which, in addition to being restricted to first-time home buyers, also includes a repayment provision, essentially acting as an interest-free loan rather than a true credit.

Eric Belsky, Executive Director, Joint Center for Housing Studies, Harvard University

Fix Housing First also seeks a government-subsidized interest rate buydown to 2.99% fixed rate for a 30-year fixed mortgage for all existing and new homes. The rate would be available for contracts signed between now and June 30, 2009. For contracts signed between June 30, 2009, and Dec. 31, 2009, the rate would increase to 3.99%, again for a 30-year fixed rate loan.

The problem with getting this plan through the system, as Block pointed out is that the industry "overplayed its hand with the NOL tax provision, and some of their friends on Capitol Hill felt betrayed when that fell apart."

Belsky said that he does not have a very good outlook for the next six months, and he is still looking for a reason for the market to come back. The plan advocated by Fix Housing First could be that necessary nudge, but as Block told audience members, "It's not impossible, but you have a lot of people ahead of you [in line for a government bailout]."

View Tom Block's Presentation here

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