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Housing and Tax Reform: Where Could the Impact Land?

Tue, 01/16/2018 - 15:42

Homebuyers and homeowners are anticipating fallout from the Tax Cuts and Jobs Act, which has changed homeownership incentives, including the deductions for mortgage interest and state and local taxes.

How deep the effect is hinges on location, according to new research.

With the bill’s new provisions, the mortgage interest deduction (MID) is applicable to loans of up to $750,000 (down from $1 million), and state and local tax (SALT) deductions are limited to $10,000. An analysis conducted recently by HouseCanary, provider of predictive real estate analytics and insights, determined that 82 percent of lost MIDs under the new laws are concentrated in 10 metropolitan statistical areas (MSAs), including four California MSAs and four East Coast MSAs.

All told, 6.4 percent of loans between $750,000 and $1 million could be affected by the changed MID, or $287 million in deductions lost total, the research reveals.

In the case of the deduction of state and local taxes, including property taxes, 66 of the 3,134 counties in the U.S. could be impacted, the research shows. Bearing the brunt could be Boston, Mass., New Jersey and New York, where citizens could depart for lower property taxes in other states.

“The recent tax bill clearly addresses some key deductions for many current and potential homeowners, yet the overall net effect on the nation’s housing picture is harder to discern,” says Alex Villacorta, executive vice president of Analytics at HouseCanary. “On the surface, the reduction in the caps for the mortgage interest deduction (MID) seem to squarely target the higher end of the nation’s housing inventory, specifically those homes valued between $750,000 and $1 million. Throw in the caps to the state and local taxes deductions, and even more force is added to the headwinds for homeownership.

“Yet, for most homebuying consumers, there may actually be real tax savings that could potentially assist acquisition of the necessary down payment for homeownership, something that has been elusive for many new entrants into the market,” Villacorta says. “What we do know at this point, however, is that this new tax bill will add another layer of uncertainty to a market that has been searching for some semblance of normal since the euphoric run-up and near economic collapse of the housing market over the last decade. The new normal of today’s market dictates that all market participants—buyers, sellers, lenders, and investors—will have to be vigilant at a granular level to better understand when or if this tax bill, or any other factor, affects their property’s market value.”

Thirty-three percent of Americans approve of the Tax Cuts and Jobs Act; 55 percent disapprove, according to a Gallup poll in January. More than 35 percent of respondents to a December realtor.com® survey were “concerned” about homeownership in light of the reform.

For more information, please visit www.housecanary.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Help Your Agents Perfect Their Social Media Strategy

Tue, 01/16/2018 - 15:37

NAR PULSE—Back At You Media, the newest partner in the REALTOR Benefits® Program, provides powerful automated marketing to ensure your agents and their listings rise above the noise on social media. Learn about the three different plan options available to members of the National Association of REALTORS®. All have exclusive pricing for members. Learn more.

2018 NAR Member Orientation Video and Digital Materials Available Online
NAR’s 2018 New Member Orientation Materials are now available online for use by brokerages. NAR offers resources and tools to help brokers welcome new agents into the REALTOR® family, and its wealth of benefits and resources. Included is the new 2018 online video about NAR benefits to show at new agent orientation. The member orientation materials, including details about the online module, are available here.

Keep Business Moving With .realtor™
Kick off 2018 by claiming an exclusive .realtor™ domain for your firm and adding G Suite from Google Cloud and Placester®, a REALTOR Benefits® Program Partner, to your toolbelt. Learn more and get started today!

For the latest real estate news and trends, bookmark RISMedia.com.

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Home Laundry: To Vent or Not to Vent

Tue, 01/16/2018 - 15:30

I once believed it was a forgone conclusion that when adding certain laundry appliances to a home, it would mean installing exhaust ducting and cutting a hole to the outside for venting.

However, a recent report from Michele Weaver at Design Basics, LLC highlighted a growing trend in ventless dryers that can be easily located and relocated within a home because vent piping, exhaust holes and venting to the outside are not needed.

The mechanics of a home dryer can cause energy and safety problems if lint becomes trapped in the vent. This demands more energy use and frequent cleaning. Weaver believes one of the major trends consumers will be seeing in these key appliances will be the further refinement of ductless technology.

She says vent hoses snaking through a home’s framing have become a leading cause of the 2,900 (average) home clothes dryer fires reported annually, according to the U.S. Fire Administration.

J.D. Wollf at HomeSteady.com recently explained that a ventless or condenser dryer— also known as a Heat Pump Clothes Dryer (HPCD)—doesn’t need a vent because instead of expelling the hot, moist air, a heat exchanger removes the moisture from the hot air and “recycles” it, passing it back through the drying clothes. The excess water is then drained away or caught in a container that is later emptied.

The trade-off for energy savings and safety is a requirement for slightly more maintenance than vented dryers. Wollf says the condensing unit must be cleaned about once a month to remove any lint.

A study at the Florida Solar Energy Center at the University of Central Florida states that while an unvented HPCD uses less electricity than a standard resistance dryer, it was found to release significantly more heat than a conventional dryer during operation, demanding additional cooling energy that may compromise overall savings.

However, the study points out that with a current retail cost of $948, there is only a small premium on the HPCD dryers, making them cost-effective when chosen at time of replacement.

For the latest real estate news and trends, bookmark RISMedia.com.

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Survey Results: What Keeps Brokers Up at Night?

Mon, 01/15/2018 - 17:44

As we begin a new year, what are the most pressing issues on the minds of the nation’s real estate brokers? What are they most looking forward to in the year ahead? What strategies do they have in place to address inventory issues, technology adoption, agent retention or to ensure their continued profitability? Better Homes & Gardens® Real Estate and RISMedia recently teamed up to find out the answers to these and more questions through a survey on “What Keeps Brokers Up at Night?” Their answers provide a detailed map into the best practices every company can follow to success.

The U.S. brokers we surveyed represented a wide swath of company structures, from companies with less than three offices and single digit agent counts to those with more than 400 offices and 13,000 agents. Respondents’ average age range was 51-70 and responded from all regions of the country. Annual sales volume listed by respondents ranged from approximately $650,000 to over $4.8 billion.

Check out this infographic based on part of the survey results. Full results to follow in article after the graphic.

Top Concerns

Taking a look at brokers’ most pressing, high-level concerns, the top three ‘most disruptive to the current real estate model’ were: Direct-to-consumer, online, flat-fee and 100% commission models. The top three ‘most pressing issues facing the industry’ were lack of inventory, recruiting and non-traditional competition. Top obstacles to profitability were lack of inventory, increasing agent productivity and pressure on commissions. Some responses entered in the ‘Other’ category for this question included discount brokerages, Zillow, too many agents, lead generation and ‘declining market without increase in sales volume on top of rising labor costs.’

On the subject of budgeting, brokers listed online marketing and technology as some of their top investments; also included were administrative, office expenses, labor, rent occupancy, advertising, recruiting and training. ‘Client services’ was the clear winner in what sets their firms apart, showing per tradition that nothing can replace good, old-fashioned customer service. Agent tools, technology and commission structure were the runners up for budget dollars.

Brokers listed their top operational challenges as recruitment of agents, agent productivity and business model competitiveness. And to the question, “What keeps you up at night the most?” brokers listed recruiting more agents as the top answer, followed by new business models, uncertain economy, keeping up with technology, lack of inventory and housing legislation issues.  ‘Other’ answers in this category included: relevance to agents, inspection repairs, Zillow, lack of agent experience, builders and owners reaching buyers directly and lead generation.

Is the key to success being organized? One respondent wrote, “I sleep like a baby because I am organized.” This can only help in business—and with sleep.

Deeper Dive on the Issues

With lack of inventory rising to the top of the most pressing issues, we asked how brokers believe this challenge should be addressed. The top response was ‘increase percentage of new home construction,’ followed by ‘better education of clients on rent vs buy and view of current inventory,’ ‘motivating agents to be more proactive with lead generation,’ ‘reevaluation of local zoning and permit laws,’ ‘changes to tax structure,’ ‘reevaluation of national housing regulations,’ and ‘creative solutions such as manufacture housing.’

Some ‘Other’ responses included: More affordable and entry-level housing and home-buying incentives. One broker stated, ‘Time will solve the problem.’

In an effort to garner some insight from brokers in their own words, our survey included several open-ended questions. On the question, “What best practices do you have in place to ensure your firm and agents remain relevant to today’s consumers?” some answers included: Continuing education, communication, staying on top of technology, training, brand awareness, quality service, integrity, strong online presence, easy-to-use tools, response time, being able to change with the trends, strong marketing and pricing and market knowledge.

We also asked for insight into brokers’ approaches to adopting technology in their firms. Responses primarily indicated this is a high priority, with some having to outsource IT help and other larger firms with dedicated in-house tech departments.

Here’s a sampling of broker responses:

“Technology is a primary focus and one we will continue to put a high priority on keeping up and implementing.”

“The highest priority is absorbing the skills and needs of our millennials.”

“I do not feel like we need to be on the cutting edge of technology because most agents won’t use it anyway. More important to invest in technology that makes agents more productive, happier, gives more free time and easy to learn/implement. Once you make the decision, thorough on-boarding and education is key.”

“Our founder has allocated over $40 million to improve technology for our associates.”

“We have a small brokerage It is a challenge to offer the technology that new agents expect.”

“I outsource all of it.”

“We do not have an IT staff. I handle the company’s technology needs as we are a small brokerage. The implementation of CRM or lead management, developing effective on-line marketing and advertising campaigns has become too great a task for the small broker who wants to grow their business. It appears we are entering a period that will greatly benefit national franchise brands.”

“We are continually looking at improving our technology and investing on upgrading our website design to attract customers. Growing our Facebook presence as well.”

“Not the highest priority. Too much industry emphasis on tech and not enough on high-quality, personalized service itself.”

“Moved to paperless system which has been working. This makes everyone more productive. Challenge is learning how to use the technology and staying on top of it. Like marching forward in a sandstorm – you just keep moving and try to pay attention only to those grains of sand that will help you succeed.”

Q. How do you ensure your agents are utilizing the technology systems you have in place?

Many respondents indicated that constant training and education is key to tech adoption by agents. One-on-one support, sales meetings, using technology that monitors agent tech use and providing incentives were also noted.

“Constantly educate them at weekly staff meetings, using case studies or real-world examples. Following up with agents at quarterly reviews to see what issues they’re having.”

“Education. We have literally hundreds of online videos for training on tech systems as well as a marketing company that assists our associates with their online presence and tech skills.”

“Talk about it; demonstrate it and show them personally how to use it. Those that still don’t adopt…they will either grow or go.”

“Offering lots of courses and one-on-one coaching. We track agents’ production based on workshop training attendance.

“My agents are all self-employed independent contractors so I can set company policies that insure legal and ethical practices but cannot require they complete their tasks in a specific manner. I recommend tech and marketing classes whenever available, show agents new and old tech opportunities, explain the advantages of using specific tech tools and make myself available when they feel they need help. I use sugar not a stick.”

Q. What recruiting efforts do you employ to make sure you’re securing the best and brightest?

On this topic, brokers stated they often rely on traditional face-to-face meetings with new recruits, personal relationships and peer recruiting. Some use personality tests. Here are more insights:

“Personal profile of each recruit to learn how they like to work. Tailoring their on-boarding to match their profile. Using our brands extensive recruiting training and tools to help.”

“I mostly do my own recruiting. I try and judge the people that I think would make good sales associates.”

“We are very visible in the local real estate community, interact with agents on a regular basis. Be at their level and not on the “broker pedestal.”

“Ongoing monitoring or local agent’s production. Setting up lunches/coffees to get to know them better and understand what their goals are.”

“Upfront sales personality testing. Create an avatar of our ideal agent, use that to interview and evaluate candidates.”

“Hired a full-time recruiting professional to work with and to hold managers accountable.”

Q. What are your best approaches to retaining agents and how does company culture play a role in that area?

Company culture is paramount to brokers and plays a vital role in agent retention and productivity, and is also key to profitability, many stated.

“We take great pride in the culture we’ve developed over the past 10 years since opening as an independent brokerage. We only recruit/offer to agents that we feel fit our culture…We try to ensure our agents know we expect everyone to act ethically and we ask each of them to know WHY they are in the business and what they want out of it. We make sure they’re in it for the right reasons and support them with their needs.”

“Company culture is essential to retaining agents, as the owner of the company you need to be accessible.”

“Frequently checking in with agents as to how their business and personal lives are going. Showing that you are interested and you care.”

“Maintain a culture of support and focus on agent growth and development. Foster integrity, honesty and sharing among agents. Build a cohesive group of independent contractors who depend on one another.”

“Recognition, incentives, goal setting, accountability – culture is HUGE.”

“Always looking at adding value to our agents’ business through leverage of time through staff, one-on-one coaching, social events, weekly training events, and our culture plays a huge part.”

“Goes to education again. Culture is paramount in our brokerage and we spend a lot of time and energy in bolstering a culture of support, ethics and camaraderie.”

“We offer coaching and focus strongly on building relationships. We have lots of workshops and office parties to have a healthy mix of work hard, play hard.”

“Company culture is critical. As we are small, retention is based upon being involved with each agent’s business.”

“Professional recognition is very important in a ‘sale environment,’ and equally important is being aware of the agent’s personal needs and recognition. Hand-written notes to agents are still effective in a world of impersonal technology.”

“Creating a cohesive and collaborative culture in the office. Offering brokers an attractive split threshold, marketing materials, great websites, attorney PMB and tons of educational opportunities free of charge.”

“Freedom, respect, recognition, mentoring/training, and proper compensation.”

We concluded our survey with a couple of questions about new opportunities and what brokers are most looking forward to heading into 2018. The groups in which brokers see the best opportunities in the year ahead include Millennials and first-time buyers, as well as retirees, move-up buyers, luxury buyers and past clients.

What are brokers most looking forward to in their business in the year ahead? Many said a continued stable economy, continued sustainable growth and sales, low interest rates, more inventory, agent growth and increased productivity, increased market share and new partnerships, and technology platforms. Some also said they were looking forward to retiring in 2018.

In their own words:

“We are going to be trying a new commission structure with our agents/clients with the ability of a flat-fee structure for certain clients. Also, we are going to be taking a more active role in upping the productivity of each of our agents.”

“Having new sales associates joining our firm and hoping an uptick in our local market.”

“Systems, more routine, following the blue print and checking the results.”

“The spring market when buyers are ready to move.”

“Understanding the next technologies that my company has committed to and putting them in motion.”

“Continuing to build successful agent careers. the market may change, but housing needs will always be there.”

And just because we love this…

“We are forming a Golden Girls network of successful women with decades of experience in real estate who are nearing retirement. Our goal is to make the next 5 years our most productive.”

In addition to looking forward to the opportunities to come in the new year, the majority of brokers expressed confidence in the future of the housing industry. Fifty-seven percent of brokers said they are ‘optimistic,’ followed by 20% have a high confidence level. Another 20% stated neutral and only 3% said they had a low confidence level in the housing industry.

Following the survey, John Featherston, CEO and Publisher of RISMedia said, “While real estate professionals are cognizant of the unique challenges facing individual localities or offices, this research overwhelmingly found most to be optimistic about opportunities for success in 2018. From company culture to new technologies to a high confidence level in the housing industry overall, the insights bode well for the industry as a whole and serve as a resource and road map to help others implement best practices and set a productive agenda for the year ahead.”

Sherry Chris, President and CEO of Better Homes and Gardens® Real Estate, had this to say: “I have been fortunate to be in the real estate industry for more than thirty years.  Our industry has undergone far-reaching and important evolution in that time: from being broker centric, to agent driven, to consumer centric, and now to being consumer-data driven. Transformational change is a given in any dynamic industry. Our best advice to broker/owners has always been to stay focused on the aspects of their brokerages that contribute to a singular goal: creating a valuable asset. Strategies vary by company. Competitive pressure varies by market. But some things are universal: consumers will always seek exceptional service. Agents will thrive in values-driven, collaborative environments.”

Beth McGuire is RISMedia’s Online Managing Editor. Email her at beth@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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Building a Reputation of Trust and Honesty

Mon, 01/15/2018 - 15:56

In the following interview, Phyllis Staines, broker associate at RE/MAX Coastal Real Estate in Ponte Vedra Beach, Fla., discusses disruption, marketing and more.

Region Served: Jacksonville, Fla.
Years in Real Estate: 20
Number of Offices: 1
Number of Agents: 16
Favorite Part of Your Job: The freedom and unlimited potential for earning. I also enjoy solving problems, and those who are needing to buy or sell have a problem that we need to solve for them.
Best Advice for Someone Just Getting Into the Business: Be prepared to work hard in order to build a reputation of trust and honesty that people will gravitate toward.

What factor has the largest influence on the real estate industry today?
As the industry continues to change and evolve, it’s important to remember that technology will never substitute the skill and diligence of a real estate professional. That being said, I believe technology disruption could have the biggest impact on the real estate industry if we don’t recognize that it’s happening. If we sit back and turn a blind eye toward the disruptors coming into the industry, it could impact us more than we realize. Complacency is a concern we must take more seriously. We can’t rely on technology to solve everything. It’s simply a tool.

Is there a specific trend or movement you’re currently paying attention to that has the capacity to disrupt the market?
Instant Offers have become a hot topic within the past year, with Zillow and other technology groups testing out instant-offer platforms. While I don’t necessarily foresee this becoming a huge disruptor in my market, it’s something I will continue to pay attention to.

In what ways does your company stay flexible and current?
The RE/MAX intranet we have access to—which includes RE/MAX University, where agents can take part in constant training—is key to staying flexible and current. Being a leader in the industry, RE/MAX is aware that they must be cognizant of the competition. The development of their new logo is one example that shows just how tuned into the market they are.

You utilize Homes & Land as part of an integrated marketing strategy that includes print publications. How does this benefit you?
I’m a big Homes & Land advertiser, a publication I’ve been advertising in for at least a dozen years. Not only do I recognize the value of print, but I also supplement it with social media, the internet and direct mail. I’m having a great response from both direct mail and Homes & Land, and that’s because so much of my competition isn’t doing it anymore. All in all, I’m a big believer in Homes & Land, as there’s no other magazine in my market that applies solely to homes. We owe it to our sellers to expose their property in every way possible, and print is one of those ways.

Looking ahead, what are you most looking forward to as 2018 gets underway?
While I’m hoping 2018 brings more inventory and drives more people into homeownership, I’m also going to continue to improve my skills and education in order to stay ahead of the competition.

For more information, please visit www.homesandland.com.

Paige Tepping is RISMedia’s managing editor. Email her your real estate news ideas at paige@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Buying Is Better Financially in More Than Half of Markets: Report

Mon, 01/15/2018 - 15:50

It is more affordable to buy a home than rent one in more than half of markets—but for how long remains uncertain, according to recently released research.

In 54 percent of the over 400 counties analyzed by ATTOM Data Solutions, buying the median-priced home is more affordable than renting a three-bedroom one, according to ATTOM’s 2018 Rental Affordability Report. The biggest counties better for buying are Tarrant County, Texas, home to Ft. Worth; Broward County, Fla., home to Miami; Bexar County, Texas, home to San Antonio; Wayne County, Mich., home to Detroit; and Philadelphia County, Pa.

Big counties in general, however, are better for renters, the research shows.

“Although buying is still more affordable than renting in the majority of U.S. housing markets, that majority is shrinking as home price appreciation continues to outpace rental growth in most areas,” says Daren Blomquist, vice president at ATTOM Data Solutions. “Renting has clearly become the lesser of two housing affordability evils in many major population centers, with renting more affordable than buying in 76 percent of counties that have a population of one million or more. And when broken down by population rather than number of markets, this data shows that the majority of the U.S. population—64 percent—live in markets that are more affordable to rent than to buy.”

Gains in home prices are exceeding growth in rents in 59 percent of the counties assessed, including Los Angeles County, Calif., Cook County, Ill., and San Diego County, Calif. The contrary is happening in 40 percent of the counties examined, including Harris County, Texas, home to Houston; Maricopa County, Ariz., home to Phoenix; and Kings County, N.Y., or Brooklyn.

Incomes are also lagging rents in 60 percent of counties, including, again, Los Angeles County, Cook County and San Diego County.

Learn more in the report.

Source: ATTOM Data Solutions

For the latest real estate news and trends, bookmark RISMedia.com.

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The Great Debate: What the MLS Can Be, and What It Should Be

Sun, 01/14/2018 - 13:06

Ask any agent, broker or constituent in real estate: There are challenges facing the Multiple Listing Service.

A discussion on the future of the MLS—what it can be, and what it should be—hosted by the California Association of REALTORS® (C.A.R.) recently illuminated those issues, and strived for solutions.

“An MLS should be defined not only by its data, but its access to the data, so brokers can get easy access to and keep the products and services they want and not necessarily what the MLS decides to provide to its members,” said Rebecca Jensen, CEO and president of Midwest Real Estate Data LLC (MRED), during the discussion, held on Jan. 10 in Los Angeles.

Jensen is board chair of The MLS Grid—a consistent data feed, licensing and rules for brokers, MLSs and vendors—as well as on the board of the Broker Public Portal (BPP). The BPP and The MLS Grid are two of a few initiatives in play, along with Upstream, which is backed by the National Association of REALTORS® (NAR) and Realtors Property Resource® (RPR®).

Art Carter, CEO, California Regional Multiple Listing Service (CRMLS); Chair, Real Estate Standards Organization (RESO)

Addressing the inefficiencies is key, the panel said.

“Our goal is to really work on the challenges…to find a way, through the efforts of all these organizations, to provide consistent data efficiency, to try to break down data silos that are huge pain points in brokerage communities,” said Jeremy Crawford, CEO of the Real Estate Standards Organization (RESO), which has developed data standards used by hundreds of associations, brokerages, MLSs and vendors.

“As someone who lists and sells real estate, I need it to be more efficient—I need to not have to go multiple sources,” said Jeanne Radsick, broker of CENTURY 21 Tobias Real Estate in Bakersfield, Calif., and member of the National Association of REALTORS® (NAR) Mergers & Consolidations Task Force. “I think the first step is we need to have one system.”

Mark McLaughlin, CEO, Pacific Union International

“We are playing a long game,” said Mark McLaughlin, CEO of Pacific Union International, based in the Bay Area and a member of 12 MLSs. “The solution for our businesses to drive efficiencies and economies of scale is very important to us, especially in the race to zero. The only way to do that is to have one database.”

“It’s all about how you define ‘one database,'” however, said Craig Cheatham, CEO and president of The Realty Alliance, a brokerage network that includes Douglas Elliman Real Estate and HomeServices of America. “As I talk to our brokers, it’s not about one MLS or one database; it’s ‘I just want to have access to my data, or my marketplace’s data.'”

Is it beneficial, even, for the existing inefficiencies to be streamlined?

“Fundamentally, the MLS needs to serve [agents and consumers],” said David Silver-Westrick, partner at Keller Williams OC Coastal Realty in San Clemente, Calif. “We serve them less and less with every year—not because we don’t intend to solve their problems, but because the world has moved on, and we’re unwilling to…reimaging our relationship with consumers, and agents’ relationships with consumers, has got to be at the base of what we do.”

“Meeting the consumer where they are, but empowering the agent with more data—that’s available through these silos that we’re trying to break down—will make the MLS more valuable than it is today,” said Quincy Virgilio, broker associate of Coldwell Banker Residential Brokerage in San Jose, Calif.

Concerning, however, is the pace of progress.

“There’s an opportunity that is fast fading in the MLS community as a whole to make meaningful change, and if we do not do it shortly, then we will forever be chasing others that will most likely take the handles and move forward,” said Art Carter, CEO of the California Regional Multiple Listing Service (CRMLS) and chair of RESO.

Is the answer consolidation? Archaic hierarchies are a hurdle, with resistance starting at the top, according to a few panelists.

“The issue boils down to an obvious reality,” said Wes Burk, broker/owner of Patterson Realty in San Luis Obispo, Calif. “I think that the MLS structure itself is a legacy organizational chart, and I think it’s led fundamentally to a bureaucratic roadblock to what should be our primary objective, which is serving the consumer.”

“The people that sit on those [MLS] boards don’t have the broader view that others have…[they’re] not as well informed as they need to be, and it goes all the way through the system,” Radsick said.

Fear is another obstacle.

“It’s really human factors that stand in the way of this—of greater cooperation and consolidation,” said David Charron, chief strategy officer of Bright MLS, which is a consolidation of nine Mid-Atlantic MLSs. Bright MLS adheres to the RESO Data Dictionary.

“The elephant in the room is a lot of people are employed doing this stuff,” Silver-Westrick said. “A lot of people are employed at the local board level, the MLS level—the pushback we get is natural enough. ‘Yes, I’m willing move towards the future, so long as I’m still here.’ I think what we have to discuss is a lot more revolutionary than evolutionary. We’re talking about perfecting a VCR in a world of streaming and virtual reality. We need to leapfrog that. What do you do about the career incentives of the very talented people working in MLSs that say we can do this better, but we want to still be here?”

“The reality is that those people are so protective of their jobs,” said Sandra Deering, broker of record for Coldwell Banker Residential Brokerage Southern California. “People who sit on the board of directors of MLSs have great intentions, but they don’t have the bandwidth to see beyond their day-to-day operation.”

“There’s fear in association-owned MLSs that they may lose revenue,” Virgilio said. “Let the association use what they want to lay on top of the database. They can serve their subscribers and clients in any way they think best, but put the data in one spot. It’s a matter of getting past that fear.”

As a construct, the MLS is still valuable, agreed the majority of panelists. Across the board, collaboration—and compromise—is needed.

“We have to remember that the MLS is a terrific concept,” said Dale Ross, CEO of RPR. “That should not be thrown out—that has to be enhanced.”

“If you have a hand in creating your future, even if you [only] get 85 percent of what you want, that’s still enough to move forward,” Jensen said.

“We get tension between who does the resolution,” Cheatham said. “Is it [The MLS] Grid? Is it Upstream? Is it RPR? We need to be in a room and be open to letting go of our project…It can’t be the superstars of the MLS world again and again talking about the problem and getting painted with a broad brush. We’ve got to be open, because our industry is at stake.”

Readers: What is the fate of the MLS? What improvements are needed? Comment to share your thoughts.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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California Real Estate Professional Among Mudslide Victims

Sun, 01/14/2018 - 13:05

A Southern California real estate professional perished tragically in the mudslides last week, one of more than 15 victims of the latest catastrophe to strike the state.

Rebecca Riskin, of Riskin Partners in Montecito—known as the “first lady of luxury real estate”—was killed as a result of the ensuing flood and mudslides in the Thomas Fire‘s wake, Riskin Partners confirmed in a release on Thursday. Riskin was a longtime Montecito resident, responsible for over 470 transactions totaling $2.17 billion, according to the release.

“The pinnacle of Rebecca’s life’s work and her lasting legacy lies in Riskin Partners and our enduring commitment to selling Montecito real estate,” said Dina Landi, managing partner of Riskin Partners. “We plan to continue Rebecca’s legacy and love for real estate with the same level of excellence, experience, and service that Rebecca so effortlessly embodied.”

Riskin is survived by her husband, Ken Grand, and a son and a daughter, as well as other extended family members.

(At press time,) the mudslides have claimed the lives of 17 people and destroyed 100 homes, reports the Wall Street Journal. Mudslides commonly occur post-fire season when the land has been stripped of vegetation, allowing water to quickly flow down hills in under 30 minutes of torrential downpour.

This incident, however, has been one of the more destructive. According to CAL Fire, Gov. Jerry Brown ordered mandatory evacuations for areas below the Thomas, Whittier, Sherpa and Rey fire burn areas last week, and multiple areas were under voluntary evacuation orders. But unlike the fires, which take more time to reach the communities within the hills, the mudslide happened quickly, leaving residents with less time to prepare.

Controversy surrounds the state’s preparedness, as residents report confusion when it came to delineating the mandatory and voluntary evacuations zones. Residents did not have time to make a decision about staying or going, and confusion about whether their area was in immediate danger could have played a role in the only 200 individuals (reported by WSJ) that heeded warnings to leave the Montecito area.

The heavy rainfall has tapered off, taking with it the risk of additional mudslides. Multiple rescue teams have been deployed. The California Governor’s Office of Emergency Services (Cal OES) reports it deployed a 14-member Swiftwater Flood Search and Rescue Team from the Long Beach Fire Department last week, along with others.

Multiple residents are still reported missing, but the rescue efforts are underway, having rescued over 20 injured or stranded residents (at press time). The WSJ reports that helicopters are airlifting people off rooftops, stating that a real estate agent was found alive, hanging from a tree branch, after his partner assumed worse hours earlier. Another real estate agent, Marco Farrell, survived the ordeal after he stepped outside to discover the oncoming mudslide and tried to warn neighbors, reports ABC News.

It is too early to assess the full scope of property damage or the impact on pending real estate transactions, but the CAL OES Twitter account reports that the mudslides lifted entire homes off their foundations. Mike Eliason, a spokesman for the Santa Barbara County Fire Department, told the New York Times that “Some single-story homes were obliterated, just wiped off the foundation. Others had holes blown through from boulders.”

Have you been impacted by the California mudslides? Email online@rismedia.com to share your story.

Stay tuned to RISMedia for more developments.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Fair Housing Makes Us Stronger

Sun, 01/14/2018 - 13:04

On April 11, 1968, President Johnson signed the Fair Housing Act into law. This marked an important and historic change in our nation’s commitment to property rights, recognizing that property rights should not be abridged because of discrimination based on race, color, national origin or religion. In later years, the law was amended to prohibit discrimination based on gender, disability and familial status.

The National Association of REALTORS® (NAR) will commemorate this historic piece of legislation with a year-long campaign beginning in January and highlighted by a reception at the National Museum of African American History and Culture during NAR’s 2018 Legislative Meetings & Trade Expo in May. The campaign will incorporate a review of history that recognizes our early opposition to fair housing and celebrates real estate leaders and organizations that helped change our policies. Today, we’re leading efforts to expand fair housing protections based on sexual orientation and gender identity.

We’ll also look at ongoing fair housing issues affecting our communities. Fair housing isn’t just about the transaction. Our livelihood and business as REALTORS® depend on a free and open market that embraces equal opportunity. We need to take a leadership role in identifying and addressing these issues. Whether it’s school quality or access to healthy communities and economic opportunity, these issues not only affect the choices of homebuyers and renters; they make it harder in some communities to be a successful REALTOR®.

By commemorating this law, NAR, as the “Voice for Real Estate” and a champion for private property rights and homeownership, will raise awareness about the importance of equal housing opportunities. The National Association of Real Estate Brokers, the Women’s Council of REALTORS®, the National Association of Hispanic Real Estate Professionals, the Asian Real Estate Association of America, and the National Association of Gay and Lesbian Real Estate Professionals will join NAR in commemorating the fair housing anniversary. These organizations are firmly committed to equal housing opportunities and recognize the unique and important role each organization has in this noble endeavor.

You can go to fairhousing.realtor to learn more about the commemoration and to find materials and resources you can use to participate. Consider the following actions to join in this commemoration:

  1. Help your company, community, and local and state association identify and commemorate fair housing history and champions in your state.
  1. Post what you’re doing on fairhousing.realtor. Share ideas, adapt what others are doing to meet your needs and work with local chapters of our national partners.
  1. Work in your committees to support efforts to get Congress to pass changes to the Fair Housing Act to expand fair housing protections based on sexual orientation and gender identity.

This column is brought to you by the NAR Real Estate Services group.

Fred Underwood is the director of Diversity and Inclusion, NAR Community and Political Affairs. For more information, please visit www.nar.realtor.

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Confidence in Housing Subdued at Year-End

Sat, 01/13/2018 - 00:02

Confidence in housing was subdued in December in the Fannie Mae Home Purchase Sentiment Index® (HPSI), derived from Fannie Mae’s National Housing Survey® (NHS). The HPSI overall posted 85.8 in December, two percentage points lower than the month prior.

“Consumers remained cautious in their housing outlook at the end of 2017, as tax reform discussions continued,” says Doug Duncan, chief economist and senior vice president at Fannie Mae. “In December, mirroring the other major consumer sentiment benchmarks, the HPSI reflected this caution and declined slightly.”

The share of homebuyers surveyed for the Index who believe now is a good time to buy fell five percentage points to 24 percent, while the share of sellers who believe now is a good time to sell stayed the same at 34 percent. The share of those who believe home prices will go up fell two percentage points to 44 percent.

Source: Fannie Mae

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Facebook Shops Around for Its Next Business Endeavor: Rental Listings

Wed, 11/15/2017 - 15:52

Once touted as the most popular and innovative internet community of its time, Facebook is now pushing to compete with trendy social media platforms like Instagram and Snapchat. As part of its rebranding efforts to become an all-in-one service, Facebook recently added payment capabilities to its messaging service, along with various filters to its camera settings to mimic Instagram’s photo editing settings. It is now making a move into the real estate industry by adding apartment and home rental listings onto its existing Marketplace storefront, which so far only included household items, job postings and car listings.

Adding a social media twist to a popular Craigslist service, Facebook is transforming apartment searching into an interactive experience by providing 360-degree photo capabilities and using social media profile information to reduce the chances of scams and unsafe transactions. And while consumers will be able to search for properties based on location, price, size, bedroom number and animal restrictions—information that is provided by landlords and leasing companies—a real estate agent is nowhere in sight. So, how is this going to be impact the industry?

For many real estate agents, being fully entrenched in the rental business is a great way to transition into buying and selling. This is especially true for greener agents that don’t yet have the real estate experience, and need to build business by working primarily with renters. After all, it’s safe to assume that many of those renters will become buyers someday. Not only is it a great way for agents to familiarize themselves with the industry, but it’s vital to building a contact database that they can grow.

Not only is Facebook looking to list its consumers’ properties using Marketplace, but it is also pulling property information from partnered sources—Apartment List and Zumper—which will integrate hundreds of thousands of listings. Although only in the early stages of adoption, the industry could see this as a direct challenge to Zillow and other popular home search sites. Unless Facebook decides to go the lead marketing and agent branding route with brokerages, as Zillow does, the real estate industry may see this as an unwelcome addition. So far, it doesn’t sound great for the industry overall. But here’s why it won’t be an overnight success:

Consumers Want Simple
The more capabilities are added onto an app, the more complex it will become. Yes, consumers expect a one-stop shop for services that make sense together, such as ordering food and getting it delivered; however, Facebook is primarily a social media site, and that’s what it will always be known for. While some community aspects like groups and neighborhood tag sales are successful, trying to condense an entire rental industry into an app’s subcategory may be a stretch.

It’s Free, but at a Cost
While Facebook maintains that the service is free of charge, putting a rental listing on the market is well worth the commission paid. When using a real estate agent, the rental commission goes toward listing services, such as photography and staging, as well as marketing, consulting and vetting renter prospects. While working with a real estate agent may be more expensive, the money paid goes further in providing clients with piece of mind and ensuring a quick and smooth transaction. And while the partnered companies say they are relying on brokers, agents and other property managers to fill out the housing section, Facebook has not yet clarified how it plans to involve industry professionals in the process.

Transactions Won’t Be So Easy
The problem with marketing a rental outside a multiple listing service is visibility. A brokerage will be able to promote the listing, making it visible to its own set of renters, as well as the clients of other brokerages. By using the Marketplace platform, landlords will have to settle with renters who are primarily on Facebook, which may lengthen the renting process. There is also no vetting by an experienced agent involved. Landlords will have to deal with all credit types, and will have to request and go through references and rental histories on their own. Unless landlords find renter candidates from their own friends list, they will still be interacting with strangers, regardless of being members of the same social media site.

It will be interested to see how Facebook fares in its latest endeavor. But the industry will have to keep a watchful eye for signs of this social media enterprise involving itself in buying and selling real estate.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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Appraisals Better Match Owner Perceptions

Wed, 11/15/2017 - 15:48

Appraisals better matched owner perceptions in October, coming in only 0.99 percent lower than expected, according to the latest Quicken Loans’ National Home Price Perception Index (HPPI). The latest Quicken Loans National Home Value Index (HVI) shows appraised values rose 4.76 percent year-over-year.

A summary of the HPPI:
Owner’s estimates of their home’s value rose above the actual appraised value by an average of 0.99 percent, according to the National HPPI. This marks the fifth consecutive month the gap between the two value opinions narrowed. Also, the HPPI is now the closest to equilibrium it has been since April 2015. The trend of appraisals surpassing homeowners’ estimates in Western cities continued in October, with appraisals as much as 3.13 percent higher than expected in Dallas. On the other hand, Eastern and Midwestern cities were more likely to have an appraisal below the owner’s estimate.

“Based on the HPPI, it appears homeowners in the markets where prices are rising faster than the national average—like Denver, Seattle and San Francisco—are continuing to underestimate just how quickly home values are rising, so the average appraisal is higher than the homeowner estimate,” says Bill Banfield, executive viec president of Capital Markets for Quicken Loans. “On the inverse of that, homeowners in areas where the values aren’t rising as fast may think they are rising faster than they are, leading to the appraisal lagging the estimate.”

A summary of the HVI:
The HVI, the only measure of home value change based solely on appraisal data, showed values increasing at a measured pace month-over-month and making larger strides on an annual basis. Nationally, appraised values rose 0.71 percent from September to October and jumped 4.76 percent year-over-year, according to the HVI. All regions had similar annual growth; however, the Midwest and the West had slight dips in monthly value.

“As we enter the traditionally slower demand season in the home purchase market, persistent supply constraints may keep home prices elevated,” Banfield says. “Compared to the previous year, our economy continues to improve and attract homebuyers who may have been on the sidelines during the past few years. This will add additional demand to the equation.”

For more information, please visit QuickenLoans.com/Indexes.

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Get a Quote, Make a Difference With Liberty Mutual

Tue, 11/14/2017 - 15:47

NAR PULSE—When you get a quote on home or auto insurance from Liberty Mutual, a REALTOR Benefits® Program Partner, they’ll donate $5 to NAR’s REALTORS® Relief Foundation to support survivors of disasters across America. Find out how you can save hundreds on your insurance coverage and give much-needed help to others. Offer is valid until Nov. 30, 2017. Save and support today!

Save on Products and Services You Already Use!
In just one year, over 800,000 REALTORS® saved a combined $59 million by taking advantage of at least one offering through NAR’s REALTOR Benefits® Program. Learn how you can save this year with industry-leading companies, including FCA US LLC (Fiat Chrysler Automobiles), Placester, FedEx, DocuSign and more. Learn more.

Have You Seen What’s Hidden Within the RPR® App Icon?
Introducing, digital shortcuts to the features you use most, now within the Realtors Property Resource® (RPR®) app. Known as 3D Touch on iOS and Quick Shortcuts on Android, the shortcuts are really all about efficiency, enabling users to gain quick access to favorite RPR features such as nearby properties, an agent’s current listings, recent reports and saved searches. Discover the app.

For the latest real estate news and trends, bookmark RISMedia.com.

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Report: American Dream Incomplete Without Homeownership, Parties Say

Tue, 11/14/2017 - 15:44

In the country’s currently divisive environment, Democrats and Republicans agree on at least one American hallmark: homeownership.

Approximately 65 percent of Democrats and roughly 68 percent of Republicans surveyed for the Zillow® Housing Aspirations Report believe the American Dream is not complete without homeownership. According to the report, both parties believe homeownership is ideal for community relationships and raising a family, and promotes quality of life. Both also believe it “increases standing in the local community” and is “key to a higher social status.”

Additionally, both sides believe they can afford their home for as long as they would like to live in it (91 percent of Republicans and 89.6 percent of Democrats), even as prices reach—and, in some areas, shatter—records. According to the latest Zillow Real Estate Market Report, home prices increased 6.9 percent year-over-year.

The ability to afford their current home for the long term, however, means more are staying put. Forty percent of Democrat and Republican respondents on the West Coast—containing double-digit growth in many markets—do not plan to buy a home for at least five years, if at all, the report reveals.

“In a time of political division, these survey results remind us of something most Americans share: the sense that owning a home is a big part of living the American Dream,” says Dr. Svenja Gudell, chief economist at Zillow. “Homeownership—and its ability to create wealth, stability, and community—doesn’t depend on political affiliation. As we debate the national and local politics surrounding affordability and tax reform, it’s worthwhile to pause and remember a value most of us can agree on.”

For more information, please visit www.zillow.com.

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2017 REBAC Hall of Famers Share Their Secrets to Continued Success

Tue, 11/14/2017 - 15:42

Today, the Real Estate Buyer’s Agent Council (REBAC) boasts nearly 30,000 members and over 25,000 Accredited Buyer’s Representative (ABR®) designees.

As the industry continues to grow and flourish, REBAC singles out certain members performing exemplary acts who deserve special recognition. These outstanding ABR® designees are selected by an independent panel for inclusion in the REBAC Hall of Fame.

This year’s Hall of Fame inductees include Todd Beckstrom of ERA Wilder Realty, Inc., in Chapin S.C.; William Bodouva of Coldwell Banker Residential Brokerage in Port Washington, N.Y.; and Peggy Worcester of Weichert REALTORS® in Clarksville, Tenn.

How exactly did the latest batch of REBAC Hall of Famers elevate themselves to be the best buyer’s reps in their respective markets? Here, learn what the trio does differently to consistently keep their name and brand top of mind.

“Flexibility is crucial,” says Worcester, who works in a military market where buyers don’t have a great deal of time to view homes. “We have to be sensitive to their needs and schedule,” she adds.

Quite often Worcester will receive a phone call bright and early on any given Monday saying that her newest buyers are coming to town for the weekend…and plan to return to duty the following Monday having purchased a home.

On the other hand, Beckstrom says he starts every relationship with a mandatory buyer consultation where he’s asking a lot of questions—his favorite coming from a colleague he worked with many years ago.

“She would answer the phone and establish rapport with the caller, and then I’d hear: ‘Tell me about your situation.’ I think you get so much more honesty and information with this one inquiry,” says Beckstrom, who focuses on determining the client’s ‘why’ during buyer consultations. “Getting to ‘why’ is important because it allows me to truly understand their motivation and keep them focused.”

But Beckstrom doesn’t just educate his buyers. In fact, he wrote a patented algorithm to help his clients analyze any market segment anywhere in the world for supply and demand.

“The program takes 15 minutes to run, and my buyer becomes an instant expert on market conditions. They understand what it will take to buy the type of house they want after using my program at howisthemarket.net,” says Beckstrom.

Bodouva earned his International President’s Elite Award (given to the top 2 percent of all sales associates/representatives worldwide in the Coldwell Banker System) with a well-practiced system that consistently elevates him to best-in-class status among his market’s buyer’s representatives.

“I try to remain current with all the things that can and do affect real estate markets so I can offer accurate and relevant information, always being careful not to overstep my role as a broker,” says Bodouva. “Then, I read, learn, read more and share. By sharing my professional knowledge without a self-serving agenda, my professional reputation continues to grow year after year.”

The REBAC Hall of Famer also networks in many professional associations, carefully monitoring the ever-changing needs of buyers and sellers alike.

To that end, he’s working on a program where international buyers relocating to the U.S. can reach a qualified Accredited Buyer’s Representative to assist them with both their purchase and move.

While it could take years to implement such a program in his home state of New York, Bodouva confidently pledges that he’s on it.

When it comes to differentiating themselves among peers and colleagues, this year’s REBAC Hall of Famers each recounted specific practices they developed to shine brighter in their markets.

“I stay on top of every step in the transaction,” says Worcester. “You need to have great organizational skills and systems to serve buyers, because nothing should be left to chance.”

Since a large amount of first-time homebuyers are constantly hitting her market, Worcester accounts for the time it takes to help each prospect become better educated about the home-buying process.

“Listening is the most important thing when working with buyers,” she says. “Many agents are good at talking, but not listening. When working with buyers, you have to learn to remain quiet and listen to what they’re really telling you. This leads to a better experience for buyers, less wasted time and a better transaction.”

Beckstrom helps buyers understand that his time is ultimately of greatest value to them from the get-go.

“If buyers want my time, they have to play by my rules. All appointments begin in my office. And to see homes, they must hire me as their agent and be pre-qualified for financing. I not only focus on helping clients reach their goals, but also removing their stress by taking as much off their plates as possible so they can concentrate on the joy of buying.”

After the sale has been completed, Beckstrom touches base by phone every quarter, in addition to sending emails, mailers of value, and more.

Because of his practiced follow-up, more than nine out of 10 new clients come through referrals every year.

Bodouva believes most agencies discourage agents from venturing into the realm of buyer representation due to “vicarious liability.” This just spells more opportunity for credentialed buyer’s agents.

“Buyer representation is the most natural, misunderstood concept in New York real estate,” he observes.

When it comes to leveraging his ABR® designation, Beckstrom’s initial motivation was to show potential clients that he was capable.

“But I soon found that what I learned in the course is what made me the professional—not the designation,” he says. “I still use the lessons I learned over 15 years ago on a daily basis, and love teaching them to other agents as an ABR® instructor.”

Worcester proudly displays her ABR® designation on her business cards, name badge and email signature.

“I also take the time to talk about it during my buyer consultation,” she adds. “I explain how the additional education gives me the knowledge to better aid them in finding their dream home.”

By building an added layer of trust in knowing about Worcester’s ABR® designation, her clients recognize and appreciate that she goes above and beyond to be a better buyer’s agent.

“I really am proud to have my ABR® designation,” says Worcester. “Not every agent has taken the time to earn it, so it sets me apart.”

Bodouva educates his clients about the stringent criteria he had to complete to proudly earn and promote himself as an ABR® designee, and the many ongoing administrative costs and responsibilities he has to maintain to promote himself as such.

“I make it very clear through positive informational comparisons that ABR® is the benchmark of buyer representation,” he says.

For more information, please visit www.REBAC.net/HOF.

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Home Prices Rapidly Rise: Is History Repeating Itself?

Mon, 11/13/2017 - 16:12

‘Rapid Price Increases Will Not Last Forever’

The current growth in home prices is echoing the lead-up to the recession. Is history repeating itself?

The answer is likely not, according to a recently released realtor.com® report. Building is lacking in many markets—one hallmark 10 years ago was over-construction—and credit standards are more stringent, says Danielle Hale, chief economist of realtor.com.

“As we compare today’s market dynamics to those of a decade ago, it’s important to remember rising prices didn’t cause the housing crash,” Hale says. “It was rising prices stoked by subprime and low documentation mortgages, as well as people looking for short-term gains—versus today’s truer market vitality—that created the environment for the crash.”

In 2016, home prices (the national median home sales price) were 2 percent higher than they were in 2006, the report reveals. Pre-recession prices have returned in 31 of the 50 largest metropolitan areas.

In contrast with 2006, however, are today’s credit conditions. Currently, the median FICO score for a mortgage is 734; the median in 2006 was 700.

Builds and flips are also different from 2006—starkly. The credit environment, among other factors, is keeping a lid on unfettered flipping and over-construction. In 2006, one household formation generally equaled 1.4 single-family housing starts; in 2016, that number shrank to 0.7 single-family starts. Flips accounted for 5 percent of sales in 2016; in 2006, they comprised 8.6 percent.

“Lending standards are critical to the health of the market,” says Hale. “Unlike today, the boom’s under-regulated lending environment allowed borrowing beyond repayable amounts and atypical mortgage products, which pushed up home prices without the backing of income and equity.”

Additionally, economic indicators point elsewhere. Employment was healthy then and is now, but inventory is limited more today—at a 20-year low. Presently, the average months supply is 4.2; in 2007, the average months supply was 6.4.

“The healthy economy is creating more jobs and households, but not giving these people enough places to live,” Hale says. “Rapid price increases will not last forever. We expect a gradual tapering as buyers are priced out of the market—not a market correction, but an easing of demand and price growth as renting or adding roommates becomes a more affordable alternative.”

For more information, please visit www.realtor.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

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New Study: Where Self-Directed Real Estate Investors Are Buying Property

Mon, 11/13/2017 - 16:04

Perhaps the biggest advantage self-directed IRAs offer is the ability to invest in what you know. For many Entrust clients, that means real estate. More Entrust clients invest in real estate than in any other asset.

Their reasons for investing in real estate include the desire to diversify their investment portfolios; benefit from long-term, tax-advantaged market value growth; and generate an ongoing revenue stream while they own the asset.

Every year, Entrust produces a report that describes trends and activity among their real estate investors. This article highlights their 2016 real estate purchases.

Where Entrust Clients Bought Real Estate
California, Texas, Colorado, Florida, and Arizona are the top five states where clients bought property in 2016. This has been consistent for several years.

Looking at the list of 12 states where Entrust clients bought real estate, purchases in Missouri increased nearly 4 percent over 2015. And for the first time, clients bought property in Ohio, Tennessee, Indiana, and Washington. California, however, remained the top choice, with one-quarter of all purchases made there.

Taking a broader look at the regional level, purchases in the West actually declined by 7 percent. It may have been that higher prices discouraged investors from buying there. The decline in purchases in the West was more than made up for in increases in the Midwest (up 4 percent) and South (up 5 percent). This may have been the result of investors seeking property in other, less-expensive regional markets.

Where clients buy is closely related to where they live. Floridians and Arizonans, for example, maintained their solid, 100 percent preference for local real estate, and Coloradans increased their in-state purchases by 8 percent, from 72 percent in 2015 to 80 percent in 2016.

Californians (57 percent) and Texans (88 percent) were more willing to buy out of state in 2016 than in 2015. This may have to do with the hot property markets in those two states, with investors looking for better deals a bit farther afield.

What Investors Paid for Real Estate in 2016
A glance at the stock market, unemployment figures, or the business news shows that the U.S. economy is picking up steam. In general, the real estate market is heating up, as well. As a result, Entrust clients paid more in 2016, when the average purchase price was $192,563, compared to 2015 ($177,777 average purchase price).

But not all regions benefited equally from higher prices. See the top five states average purchase prices price fluctuation in the full report here.

What Kind of Property Investors Bought
Historically, investors have preferred single-family residences, and that held true in 2016. The number of single-family houses bought increased 7 percent over 2015, from 44 percent to 51 percent. Multi-family residence accounted for just over a quarter (27 percent) of purchases. The big change came in clients buying vacant land; that number increased from 12 percent to 18 percent year-over-year. Commercial real estate purchases declined from 3 percent to 1 percent in 2016.

Learn More
The complete 2017 Real Estate Investor Market Research Report, including information on the U.S. rental market, is available on The Entrust Group website. The Real Estate IRA Center also provides comprehensive information on how to invest in real estate using your self-directed IRA.

Download the latest Real Estate Investor Market Research Report here.

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Straight Talk With 2018 NAR President Elizabeth Mendenhall

Mon, 11/13/2017 - 15:51

The National Association of REALTORS® (NAR) Power Broker Roundtable this month discuss broker challenges and opportunities with NAR 2018 President Elizabeth Mendenhall.

Moderator: Robert Bailey, Broker/Owner, Bailey Properties, Santa Cruz, Calif.; Liaison for Large Residential Firms Relations, NAR

Panelist: Elizabeth Mendenhall, 2018 NAR President; CEO, RE/MAX Boone Realty

Robert Bailey:
A 20-year, sixth-generation REALTOR® from Columbia, Mo., the National Association of REALTORS® (NAR) 2018 President, Elizabeth Mendenhall, will be bringing a fresh perspective and important agenda to her tenure at the helm of the membership in 2018. She was kind enough to join me this month to share some thoughts on what lies ahead for the broker community next year. First off, Elizabeth, congratulations on your appointment as president! Secondly, in your opinion, what are some of the biggest challenges facing brokers right now, and how do you hope to address those challenges as president?

Elizabeth Mendenhall:
Thank you, Robert! I’m very honored and excited to take on this important role. As far as broker challenges, I think market conditions top the list right now. We hope that our brokers can be more involved in taking a stake in their communities in order to be leaders in their own market issues. When they’re involved, they can help mobilize programs and development.

Brokers are also trying to tackle recruiting and profitability. While NAR doesn’t advocate one business model over another, we do advocate that REALTORS® are essential to consumers in the transaction, and we advocate for property ownership. We’re going to spend the next year advocating for our role in the profession, and why it’s critical to have a REALTOR® in the transaction.

RB: Where do the greatest growth opportunities lie for brokers?
EM:
Technology and partnering. The fastest way to profitability is to use what you already have. There can be big cost savings in scaling. If NAR can help facilitate that, or if your state or local association can help facilitate that by providing brokers with tools to help them with their business, that’s an advantage. An enthusiasm for adopting new tools is critical for long-term success.

RB: What should brokers focus on in terms of recruiting and retaining agents?
EM:
Just like with consumers, agents are exposed to a lot of information, and as a broker, you have to distinguish what makes you and your office stand out. What’s your culture? Your specific model? When agents go on listing presentations, they have to have confidence and know why they’re the best choice. The broker has to have that same confidence when it comes to recruiting agents. They have to know what makes them different. I teach a class called “Broker on a Budget,” and sometimes it’s just a really cool, inexpensive thing that can make your firm different or improve the overall office culture. You have to look at all those little ways that touch an agent and that build connections. Sometimes it’s the little things that make you stand out.

RB: How can brokers evolve their firms to best serve their agents and consumers?
EM:
Stay involved in their association. And I think they need to constantly make sure their firm reflects the market. Are we diverse enough? Do we have enough younger agents? Enough experienced agents? Do we have teams? If we want to continue to evolve, brokers also have to spend time on themselves in terms of education and training. And then they need to involve their team and their staff members. If you want to see change in your office, take your staff members to the annual REALTORS® Conference & Expo, invest in their training. It’s amazing what they’ll bring back and what ideas they’ll share.

RB: What trends should brokers pay close attention to?
EM:
For starters, the fact that we’re closer and closer to an electronic transaction—they need to start preparing themselves now. Brokers also need to be aware of security breaches and cyber attacks. You need to know how to protect your data and how data is being used. You also have to pay attention to changing consumer demographics. All of this is overwhelming, but this is where NAR plays a role as a valuable resource.

RB: How can brokers best lead in today’s challenging environment?
EM:
When we hired Bob Goldberg as CEO, we learned that people follow people—they don’t follow organizations. People are looking to their leader and wondering, what are their passions? Are they fun? Are they approachable? They also want to know their broker is available or that they’ve built a team to handle that type of connectivity with their agents. Brokers have to understand that their clients are their agents, so are they coaching and leading? Are they demonstrating how to be a good customer, a good volunteer? Are brokers mimicking the things they appreciate in their mentors? The best leaders are those who know they’re watched, but also don’t care that they’re being watched, because they’re going to do what’s right, no matter what. They’re not afraid to make changes, not afraid to let people see them fail. They’re going to own it, no matter what.

For more information, please visit www.nar.realtor.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Straight Talk With 2018 NAR President Elizabeth Mendenhall appeared first on RISMedia.

Appealing to Investors: ‘Emerging’ Markets Show Strength

Sun, 11/12/2017 - 13:07

Housing markets in the three largest metropolitan areas—Chicago, Los Angeles and New York—have always attracted capital, eagerly handed over by investors recognizing profit potential, safety and security. Now, according to new research, other major metro areas are diverting the flow, drawing increased investment in real estate.

The common denominator? Economies flourishing with jobs and skilled workers.

“The growing interest in smaller cities by real estate investors is influenced by their relative affordability, coupled with a concentration of young, skilled workers,” says Mitch Roschelle, co-publisher of “Emerging Trends in Real Estate® 2018″ by PwC and the Urban Land Institute (ULI), and partner with PwC. “The diverse, robust economies of these smaller cities make them very desirable to investors.”

A barrier, for one, has been eliminated. Investors have become knowledgeable about markets outside the usual vehicles, according to PwC and the ULI. These other markets, also, have been less saturated with supply.

Additionally, cities with growth are ideal for investors because returns could parallel their trajectory. The cities with high interest from investors, “Emerging Trends” shows, are (in order): Seattle, Wash.; Austin, Texas; Salt Lake City, Utah; Raleigh-Durham, N.C.; Dallas-Ft. Worth, Texas; Ft. Lauderdale, Fla.; Los Angeles, Calif; San Jose, Calif; Nashville, Tenn.; and Boston, Mass. While Los Angeles appears in the top 10, the real story is in the others.

For No. 1 Seattle, challenging conditions exist.

“The booming employment market in Greater Seattle has brought multiple years of double-digit [home] price growth and less than two months’ [housing] inventory available,” says Sam DeBord, managing broker of the Seattle Homes Group and vice president of Strategic Growth with Coldwell Banker Danforth. According to Zillow, home prices in Seattle have soared 12.4 percent year-over-year.

The influx of newcomers, DeBord says, is piling onto the severe shortage.

“Since our building hangover from the last downturn, the region just hasn’t been able to keep up with growing demand for more housing units,” says DeBord. “Seventy-thousand-plus people are moving into King County every year, while we’re only permitting 10,000 new homes per year. The demand will continue to make rents and prices rise.”

Constraints in housing are not just plaguing Seattle. In Raleigh (No. 4), homebuyers are facing a fast-moving market.

“The Raleigh-Durham area is and has been one of the fastest-growing cities in the U.S. thanks to the economic growth, weather, affordability and quality of life,” says Ryan Fitzgerald, owner of Raleigh Realty. “The growth in Raleigh-Durham has translated to a real estate market with home prices appreciating at a fast rate, especially in the high-demand neighborhoods and locations.”

Fitzgerald says Raleigh-Durham is mirroring another market ranked by PwC and the ULI: Austin.

“If you have watched how Austin, Texas, grew in the last 20 years, you will notice that Raleigh-Durham is following a similar trend,” says Fitzgerald. “The rougher neighborhoods with great locations are exploding with relocating millennials, who are willing to sacrifice neighborhood identity for convenience, location and affordability—and their bets are paying off. As a relocating millennial myself, I targeted the East Downtown Raleigh area for my first home purchase, and my property has doubled in value in two years.”

In nearby Nashville (No. 9), however—newer to the scene—inventory is largely keeping pace.

“Land is a precious commodity [in Nashville], but it’s being used and we’re selling it like crazy,” says Carrie Zeier, CEO and owner of RE/MAX Elite. “I think Nashville has done a great job of staying ahead of the curve and planning for that [demand], because prices of homes are very healthy.”

Nashville has advantages both economically and location-wise, Zeier says.

“We’ve always been known as Music City—[in 2016] at least 6,000 employees made up the entertainment and music industry here,” says Zeier. “Healthcare is another driver, as well as manufacturing and tourism and hospitality. For years, we would lose out on big corporations that went to Atlanta, Austin or even Charlotte. We’re winning those now, and that’s because of our low cost of living and the ease of doing business here.”

All told, investors have not been deterred—and, despite high prices and limited supply, the forecast is sunny. According to PwC and the ULI, the investor outlook for the markets in the top 10 has risen 12 percent in four years.

“There’s no financial indicator that says Seattle is in a bubble,” DeBord says. “Unlike the last bubble, buyers today are paying cash, have good jobs, large down payments and high credit ratings. Even with high prices, interest rates have remained low. Seattle’s job market will continue to attract people from all over the world, and our housing crunch will continue. We’ll likely see a slight slowdown in appreciation with high single-digit price growth, and a continued focus on building more housing units of all varieties to accommodate our growing population.”

There is the chance for a downturn, but one investors can withstand if they get in early and at a good price.

“There’s always a correction in the market in real estate—there always has and always will be,” Zeier says. “Nashville was the last to go into that recession and really one of the first to come out of it.”

“Real estate investors should be keeping a close eye on Durham,” Fitzgerald says. “This city is a few years behind Raleigh and offers many opportunities that might have already passed in other areas. You can still buy a great home in walking distance to all Durham has to offer for under $150,000—[but] the city offers too much for these prices to stay this low much longer.”

Overall, investor focus is shifting. Cities like Nashville, Raleigh, Seattle and others are establishing precedent.

“The trend of smaller markets displacing larger ones as investment hubs is setting a new course for urban development that is reshaping cities across the nation,” says Patrick L. Phillips, global CEO of the ULI. “These cities are positioning themselves as highly competitive in terms of livability, employment offerings, and recreational and cultural amenities.”

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Appealing to Investors: ‘Emerging’ Markets Show Strength appeared first on RISMedia.

Don’t Wait: Buying Will Cost More in Just One Year

Sun, 11/12/2017 - 13:06

Are you on the fence about owning a home? It may be better to buy now than wait.

The nation’s median home value is expected to grow by $6,275 to $208,975 just one year from today, according to Zillow, adding on to the already considerable funds homebuyers need now to own a home. The average homebuyer, in fact, has to add $105 more each month to their down payment savings (assuming a 20 percent down payment on a median-priced home) over the next year, or $1,260 total, to keep up with the rise in values.

In other words: It costs more to hold off.

“Sky-high rents and rising home prices are putting first-time buyers in a bit of a catch-22,” says Dr. Svenja Gudell, chief economist at Zillow. “Buying now with a low down payment can be riskier, and the offer may not be considered as competitive by the seller; however, a renter who saves for another year to reach a larger down payment may find that the home they love today is outside their budget a year from now. For those considering buying in the next year, getting into the market today may make more financial sense than they think.”

Homebuyers in hotter markets have to contribute even more to their savings if they wait. In San Jose, Calif., the average homebuyer has to add $599 more each month to their savings to purchase a median-priced home ($1,088,434) with 20 percent down ($1,088,434); in Seattle, Wash., the average homebuyer has to add $394 more each month to their savings to purchase a median-priced home ($479,451) with 20 percent down.

In other markets:

San Diego, Calif.
Additional Down Payment Savings Per Month: $267
Expected Median Home Value (Sept. 2018): $569,906

Riverside, Calif.
Additional Down Payment Savings Per Month: $266
Expected Median Home Value (Sept. 2018): $348,949

Sacramento, Calif.
Additional Down Payment Savings Per Month: $246
Expected Median Home Value (Sept. 2018): $388,336

Las Vegas, Nev.
Additional Down Payment Savings Per Month: $229
Expected Median Home Value (Sept. 2018): $247,331

Portland, Ore.
Additional Down Payment Savings Per Month: $227
Expected Median Home Value (Sept. 2018): $383,348

Boston, Mass.
Additional Down Payment Savings Per Month: $206
Expected Median Home Value (Sept. 2018): $443,047

San Francisco, Calif.
Additional Down Payment Savings Per Month: $192
Expected Median Home Value (Sept. 2018): $876,938

Denver, Colo.
Additional Down Payment Savings Per Month: $181
Expected Median Home Value (Sept. 2018): $383,667

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Don’t Wait: Buying Will Cost More in Just One Year appeared first on RISMedia.


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