Category Archives: Federal Government Feeds

NAR Hosts eClosing Summit

By Christie DeSanctis, Melanie Wyne

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HUD Regulatory Review

By Megan Booth, Sehar Siddiqi, Joe Harris

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NAR Weighs-In on NFIP Bills

By Austin Perez, Ken Wingert, Erin Stackley

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Bob Goldberg Named CEO of National Association of Realtors®

WASHINGTON (June 23, 2017) – Bob Goldberg has been named CEO of the National Association of Realtors®. Goldberg currently serves as NAR senior vice president of Sales Marketing, Business Development Strategic Investments, Professional Development and Conventions for NAR.

Goldberg was the choice of NAR’s leadership team after an extensive national search. He succeeds Dale Stinton, who is retiring after 36 years at NAR and 12 as CEO. Goldberg has been with NAR since 1995 and will be NAR’s 12th CEO since the association was founded in 1908.

“Bob’s vision, business acumen and unique ability to successfully leverage NAR’s technology investments will ensure Realtors® remain at the center of the real estate transaction,” said 2017 NAR President William E. Brown, a Realtor® from Alamo, California. “With extensive knowledge of the association and real estate industry, Bob brings with him a strong track record for future-based thinking and enacting change, which is why the NAR leadership team is extremely confident in his ability to lead the association and membership to continued future success.”

In his current SVP role, Goldberg is responsible for brand and strategic marketing and association non-dues revenue, and oversees the largest employee base at NAR, with 69 division personnel. He guides a broad range of association initiatives including business development, strategic planning and partnerships, association product and marketing services and management, member professional development, competitive brand positioning, marketing, advertising and promotions, and group conventions.

In addition to his NAR roles, Goldberg also acts as SVP of administration for REALTOR® University, overseeing graduate school staff, day-to-day operations of the research center, curriculum development and budgets. He is also president and CEO of the REALTORS® Information Network, or RIN, an NAR for-profit and wholly owned subsidiary responsible for overseeing the realtor.com® operating agreement with Move, Inc.

“I’m humbled and excited to be named NAR’s next CEO,” said Goldberg. “This is a dynamic time for the association and the industry, and I am looking forward to my new role and working with Realtor® leaders and staff to advance the association and our members towards long-term success.”

After soliciting and considering recommendations from NAR’s members, the Leadership Team appointed a diverse 15-member search committee in December 2015 to work with executive search firm Heidrick Struggles to recruit candidates for the CEO position. 2015 NAR President Chris Polychron served as the search committee chair, and 2003 NAR President Cathy Whatley served as vice chair.

“Finding a successor for Dale Stinton was far from easy, but it was a challenge our search committee took very seriously. The final candidates, who were all top-notch, brought diverse backgrounds and the right mix of skills, but Bob Goldberg stood apart because of his considerable understanding of and expertise in the many the issues facing the industry and NAR’s members,” said Polychron. “We greatly appreciate Heidrick and Struggles’ insights and assistance throughout the entire selection process and look forward to moving ahead.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Existing-Home Sales Rise 1.1 Percent in May; Median Sales Price Ascends to New High

WASHINGTON (June 21, 2017) — Existing-home sales rebounded in May following a notable decline in April, and low inventory levels helped propel the median sales price to a new high while pushing down the median days a home is on the market to a new low, according to the National Association of Realtors®. All major regions except for the Midwest saw an increase in sales last month.

Total existing-home sales1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1 percent to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April. Last month’s sales pace is 2.7 percent above a year ago and is the third highest over the past year.  

Lawrence Yun, NAR chief economist, says sales activity expanded in May as more buyers overcame the increasingly challenging market conditions prevalent in many areas. “The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” he said. “Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”

The median existing-home price2 for all housing types in May was $252,800. This surpasses last June ($247,600) as the new peak median sales price, is up 5.8 percent from May 2016 ($238,900) and marks the 63rd straight month of year-over-year gains.

Total housing inventory3 at the end of May rose 2.1 percent to 1.96 million existing homes available for sale, but is still 8.4 percent lower than a year ago (2.14 million) and has fallen year-over-year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago.  

“Home prices keep chugging along at a pace that is not sustainable in the long run,” added Yun. “Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”

Properties typically stayed on the market for 27 days in May, which is down from 29 days in April and 32 days a year ago; this is the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 94 days in May, while foreclosures sold in 48 days and non-distressed homes took 27 days. Fifty-five percent of homes sold in May were on the market for less than a month (a new high).

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in May were Seattle-Tacoma-Bellevue, Wash., 20 days; San Francisco-Oakland-Hayward, Calif., 24 days; San Jose-Sunnyvale-Santa Clara, Calif., 25 days; and Salt Lake City, Utah and Ogden-Clearfield, Utah, both at 26 days.

“With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month,” said Yun.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased for the second consecutive month, dipping to 4.01 percent in May from 4.05 percent in April. The average commitment rate for all of 2016 was 3.65 percent.

First-time buyers were 33 percent of sales in May, which is down from 34 percent in April but up from 30 percent a year ago. NAR’s 2016 Profile of Home Buyers and Sellers — released in late 20164 — revealed that the annual share of first-time buyers was 35 percent.

Earlier this month, NAR hosted the Sustainable Homeownership Conference at University of California’s Memorial Stadium in Berkeley. A white paper titled, “Hurdles to Homeownership: Understanding the Barriers,” was released, which honed in on the five main reasons why first-time buyers are failing to make up a greater share of the market.

“Of the barriers analyzed in the white paper, single-family housing shortages will be the biggest challenge for prospective first-time buyers this year,” said President William E. Brown, a Realtor® from Alamo, California. “Those hoping to buy an entry-level, single-family home continue to see minimal choices. The best advice for these home shoppers is to know what you can afford, lean on the guidance of a Realtor® and act fast once an ideal property within the budget is listed.”

All-cash sales were 22 percent of transactions in May, up from 21 percent in April and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 16 percent of homes in May, up from 15 percent in April and 13 percent a year ago. Sixty-four percent of investors paid in cash in May.  

Distressed sales5 — foreclosures and short sales — were 5 percent of sales in May, unchanged from April and down from 6 percent a year ago. Four percent of May sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in May (18 percent in April), while short sales were discounted 16 percent (12 percent in April).

Single-family and Condo/Co-op Sales

Single-family home sales increased 1.0 percent to a seasonally adjusted annual rate of 4.98 million in May from 4.93 million in April, and are now 2.7 percent above the 4.85 million pace a year ago. The median existing single-family home price was $254,600 in May, up 6.0 percent from May 2016.

Existing condominium and co-op sales climbed 1.6 percent to a seasonally adjusted annual rate of 640,000 units in May, and are 3.2 percent higher than a year ago. The median existing condo price was $238,700 in May, which is 4.8 percent above a year ago.

Regional Breakdown

May existing-home sales in the Northeast jumped 6.8 percent to an annual rate of 780,000, and are now 2.6 percent above a year ago. The median price in the Northeast was $281,300, which is 4.7 percent above May 2016.

In the Midwest, existing-home sales fell 5.9 percent to an annual rate of 1.28 million in May, and are 0.8 percent below a year ago. The median price in the Midwest was $203,900, up 7.3 percent from a year ago.

Existing-home sales in the South rose 2.2 percent to an annual rate of 2.34 million, and are now 4.5 percent above May 2016. The median price in the South was $221,900, up 5.3 percent from a year ago.

Existing-home sales in the West increased 3.4 percent to an annual rate of 1.22 million in May, and are now 3.4 percent above a year ago. The median price in the West was $368,800, up 6.9 percent from May 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

NOTE: NAR’s Pending Home Sales Index for May is scheduled for release on June 28, and Existing-Home Sales for June will be released July 24; release times are 10:00 a.m. ET.

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House Begins Flood Insurance Markup

By Austin Perez, Ken Wingert, Erin Stackley

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Monday Minute

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Realtors® Highlight Flood Insurance Concerns as House Committee Finalizes Key Markup

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NAR Welcomes 50% Fannie Debt-to-Income

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Monday Minute

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5 Root Causes for U.S.’s Depressed Homeownership Rate: New Study

BERKELEY, Calif., (June 9, 2017) – Despite steadily improving local job markets and historically low mortgage rates, the U.S. homeownership rate is stuck near a 50-year low because of a perverse mix of affordability challenges, student loan debt, tight credit conditions and housing supply shortages.

That’s according to findings of a new white paper titled, “Hurdles to Homeownership: Understanding the Barriers” released today in recognition of National Homeownership Month at the National Association of Realtors® Sustainable Homeownership Conference at University of California, Berkeley.

Led by a group of prominent experts, including NAR 2017 President William E. Brown, NAR Chief Economist Lawrence Yun and Berkeley Hass Real Estate Group Chair Ken Rosen, today’s conference addresses the dip and idleness in the homeownership rate, its drag on the economy and what can be done to ensure more creditworthy households have the opportunity to buy a home.

“The decline and stagnation in the homeownership rate is a trend that’s pointing in the wrong direction, and must be reversed given the many benefits of homeownership to individuals, communities and the nation’s economy,” said Brown, a Realtor® from Alamo, California. “Those who are financially capable and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream.” One of Brown’s main objectives as president of NAR is identifying ways to boost the homeownership rate in a safe and responsible way.  

The research, which was commissioned by NAR, prepared by Rosen Consulting Group, or RCG, and jointly released by the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley Haas School of Business, identifies five main barriers that have prevented a significant number of households from purchasing a home. They are:

Post-foreclosure stress disorder: There are long-lasting psychological changes in financial decision-making, including housing tenure choice, for the 9 million homeowners who experienced foreclosure, the 8.7 million people who lost their jobs, and some young adults who witnessed the hardships of their family and friends. While most Americans still have positive feelings about homeownership, targeted programs and workshops about financial literacy and mortgage debt could help return-buyers and those who may have negative biases about owning.

Mortgage availability: Credit standards have not normalized following the Great Recession. Borrowers with good-to-excellent credit scores are not getting approved at the rate they were in 2003, prior to the period of excessively lax lending standards. Safely restoring lending requirements to accessible standards is key to helping creditworthy households purchase homes.

The growing burden of student loan debt: Young households are repaying an increasing level of student loan debt that makes it extremely difficult to save for a down payment, qualify for a mortgage and afford a mortgage payment, especially in areas with high rents and home prices. As NAR found in a survey released last year, student loan debt is delaying purchases from millennials and over half expect to be delayed by at least five years. Policy changes need to be enacted that address soaring tuition costs and make repayment less burdensome.

Single-family housing affordability: Lack of inventory, higher rents and home prices, difficulty saving for a down payment and investors weighing on supply levels by scooping up single-family homes have all lead to many markets experiencing decaying affordability conditions. Unless these challenges subside, RCG forecasts that affordability will fall by an average of nearly 9 percentage points across all 75 major markets between 2016 and 2019, with approximately 5 million fewer households able to afford the local median-priced home by 2019. Declining affordability needs to be addressed with policies enacted that ensure creditworthy young households and minority groups have the opportunity to own a home.  

Single-family housing supply shortages: “Single-family home construction plummeted after the recession and is still failing to keep up with demand as cities see increased migration and population as the result of faster job growth,” said Rosen. “The insufficient level of homebuilding has created a cumulative deficit of nearly 3.7 million new homes over the last eight years.”

Fewer property lots at higher prices, difficulty finding skilled labor and higher construction costs are among the reasons cited by RCG for why housing starts are not ramping up to meet the growing demand for new supply. A concentrated effort to combat these obstacles is needed to increase building, alleviate supply shortages and preserve affordability for prospective buyers.

“Low mortgage rates and a healthy job market for college-educated adults should have translated to more home sales and upward movement in the homeownership rate in recent years,” said Yun. “Sadly, this has not been the case. Obtaining a mortgage has been tough for those with good credit, savings for a down payment are instead going towards steeper rents and student loans, and first-time buyers are finding that listings in their price range are severely inadequate.”

Added Rosen, “A healthy housing market is critical to the overall success of the U.S. economy. Too many would-be buyers have been locked out of the market by the factors found in this study, and it’s also one of the biggest reasons why economic growth has been subpar in the current recovery.”   

Today’s homeownership event in Berkeley brings together leading housing economists, policy experts, real estate practitioners and public officials to discuss current market conditions, housing policy, improving access to credit, affordable housing options and inequality.

Along with Brown, Yun and Rosen, the notable list of speakers are: Katherine Baker, California State Assembly, 16th district; Matt Regan, senior vice president of public policy, Bay Area Council; Chuck Reed, former San Jose Mayor and special counsel, Hopkins Carley; David Bank, senior vice president, Rosen Consulting Group; and Jim Gaines, chief economist, Texas AM University Real Estate Center;

Additional speakers are Joel Singer, CEO and state secretary, California Association of Realtors®; Nancy Wallace, co-chair, Fisher Center for Real Estate Urban Economics and professor, UC Berkeley Haas School of Business; Laurie Goodman, co-director, Housing Finance Policy Center, Urban Institute; Carol Galante, I. Donald Terner Distinguished Professor of Affordable Housing and Urban Policy; faculty director, Terner Center for Housing Innovation; Co-Chair of Fisher Center for Real Estate and Urban Economics; and former FHA Commissioner; John C. Weicher, director, Center for Housing and Financial Markets at the Hudson Institute, and former FHA Commissioner.

Hurdles to Homeownership: Understanding the Barriers” is the second of three papers scheduled for release in 2017 by RCG. Among the findings of the first white paper, “Homeownership in Crisis: Where Are We Now?,” released earlier this year, RCG estimated that more than $300 billion would have been added to the economy in 2016, representing a 1.8 percent bump to GDP, if homebuilding returned to a more normalized level consistent with the historical trend. The third paper – published later this year – will highlight a series of creative policy ideas to promote safe, affordable and sustainable homeownership opportunities.

View an infographic highlighting the five hurdles to buying a home.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Labor Department Withdraws Workplace Guidance

By Christie DeSanctis, Marcia Salkin

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House Holds Flood Insurance Hearing

By Austin Perez, Ken Wingert, Erin Stackley

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Realtors® Survey: Led By China, Foreign Investment in U.S. Commercial Real Estate on the Rise

WASHINGTON (June 6, 2017) — One-fifth of surveyed Realtors® practicing in commercial real estate closed a sale with an international client in 2016, and as foreign investors flock to smaller-sized commercial properties in secondary and tertiary markets, many Realtors® are confident that increased sales and leasing activity will occur in 2017.  

This is according to the 2017 Commercial Real Estate International Business Trends survey released today by the National Association of Realtors®, which analyzed cross-border commercial real estate transactions made by Realtors® during 2016. Most Realtors® who specialize in commercial real estate reside in smaller commercial markets where the typical deal is less than $2.5 million.   

Similar to NAR survey findings on foreign purchases of residential real estate in recent years, China was the top country of origin in both buying and selling commercial real estate in 2016, and Florida was the top destination of choice for international clients. NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate is scheduled for release this summer.

Lawrence Yun, NAR chief economist, says the appetite for U.S. commercial real estate property was strong from foreigners last year and shows little signs of slowing in 2017.

“Multiple years of steady job growth and the strengthening U.S. economy – albeit at a modest pace – makes commercial property a safe bet for global investors looking to diversify their portfolios and generate returns outside their country of origin,” he said. “While Class A asset prices in many large markets have surpassed pre-crisis levels, Realtors® in many middle-tier and smaller markets stand to benefit from the increased interest from foreign and domestic commercial property investors.”

Added Yun, “Forty percent of Realtors® expect an increase in foreign buying clients this year. The healthy labor markets and lower property prices in smaller markets are poised to make up a larger share of activity.”   

Of the 69 percent of Realtors® who indicated they completed a commercial real estate transaction last year, 20 percent reported closing a deal for an international client. Realtors® completed a median of one buyer-side international deal and two seller-side international transactions. The typical buyer-side sales price was $1,000,000, and the median seller-side price was $550,000. 

Additionally, 22 percent of Realtors® said they completed a lease agreement on behalf of a foreign client. The median gross lease value for international lease transactions was $105,000, with most space typically under 2,500-square-feet.

Nearly two-thirds of commercial foreign buyer and seller clients were non-resident foreigners. The top countries of origin for buyers were China (17 percent), Mexico (14 percent) and the United Kingdom and Venezuela (both at 7 percent), while sellers were typically from China (17 percent) or Brazil, Canada, France and Mexico (all at 10 percent). 

Florida and Texas were the top two states where foreigners purchased and sold commercial property last year, with California being the third most popular buyer destination and Michigan ranking as the third top state where foreigners sold real estate.

The survey also found that foreign buyers of commercial property typically bring more cash to the table than those purchasing residential real estate. Sixty percent of international transactions were closed with cash, while NAR’s 2016 residential survey found that exactly half of buyers paid in cash. For those not using all cash, 34 percent of commercial deals involved debt financing from U.S. sources. An overwhelming majority of buyers either purchased commercial space for investment purposes or acquired it for business use.

“Nearly half of Realtors® reported that they experienced a greater number of international clients looking to buy commercial space over the past five years,” said Yun. “Economic expansion has slowly chugged along since the downturn, but in comparison to the rest of the world, the U.S. remains one of the most attractive and safest bets for investors. There’s little evidence this will change anytime soon.”

NAR’s second quarter Commercial Real Estate Outlook, released last month, offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets.

The NAR commercial community includes commercial members, real estate boards, committees, subcommittees and forums; and NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 70,000 NAR members specialize in commercial real estate brokerage and related services including property management, counseling and appraisal. In addition, more than 200,000 members are involved in commercial transactions as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Realtor® Volunteering Works Program Announces 2017 Mentoring and Grant Recipients

The 2017 recipients of Volunteering Works grants and mentoring are:

Karen Cunningham, Fontana Realty, Ocala, Florida

Since 2013, Cunningham the board president of Marion Therapeutic Riding has helped provide therapeutic horseback riding for children and adults with mental, physical and emotional disabilities including autism, Alzheimer’s and multiple sclerosis. Cunningham’s goal is to create a steady source of revenue by establishing two major annual fundraising events. She will receive guidance from her mentor, 2014 Good Neighbor Gail Doxie of RE/MAX Realty Group in Fort Myers, Florida, about creating compelling fundraising events and engaging board members.

Priyanka Johri, Woodlands Eco Realty, The Woodlands, Texas

In 2008, Johri founded Pure Mutts Animal Sanctuary after Hurricane Ike left many pets injured and homeless. She runs a no-cage shelter for dogs that are sick, older or injured – often taking in dogs that other shelters are unable to care for – and finds them permanent homes. Johri’s goals include training domestic violence survivors to be pet sitters or dog groomers and taking in dogs whose elderly owners are going into assisted living facilities. She will receive guidance from her mentor and 2013 Good Neighbor Brenda Breit of the Empowered Team, LLC in Scottsdale, Arizona and co-founder of Lost Our Home Pet Foundation.

Vickie Lobo, RE/MAX Champions, Upland, California

For the last three years, Lobo’s Community Miracle Makeover has facilitated home makeovers for people in need, including people with cancer or disabilities, or people moving out of a homeless shelter into an apartment. She recruits volunteers willing to work on these projects and donate furniture. Lobo’s vision is to rent a storage facility to hold donations to enable her to help more families. Lobo will seek advice from 2016 Good Neighbor Cindy Barrett of Keller Williams Realty in Spartanburg, South Carolina, co-founder of Christmas In Action, on obtaining nonprofit status and fundraising more effectively.

Janet Tanner, RE/MAX Premier, REALTORS®, West Hartford, Connecticut

In 2014, Tanner founded Real Estate Agents Recycle, which picks up unwanted household items from home sellers and donates them to local nonprofits. The effort keeps waste out of landfills, employs several people, and supplies nonprofits like Salvation Army and Habitat ReStore with household goods to help the people they serve. Tanner’s goal is to build the base of participating real estate practitioners and generate consumer demand. Tanner will seek guidance from 2014 Good Neighbor Beth Smoot of NextHome City of Oaks in Raleigh, North Carolina and founder of the Green Chair Project, on marketing, recruiting and training volunteers.

Kimberly Watson, Lions Realty Group, Quartz Hill, California .

In 2014, Watson founded Project Joy Inc., which fills gaps in services to meet the needs of homeless shelters and underfunded schools. She has provided winter coats, holiday meals, Christmas gifts, and college scholarships that have impacted 4,000 children. Watson’s goal is to properly brand and secure funding for core programs and to create an annual signature fundraising event. Watson will be advised by 2016 Good Neighbor Ed Liebzeit of Jackson Hole Sotheby’s International Realty in Jackson, Wyoming, board president of Community Safety Network, on creating a new fundraising event, restructuring her web page and incorporating social media.

To learn more about Volunteering Works or the Good Neighbor Awards, go to www.nar.realtor/gna.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Wells Fargo Home Mortgage is the nation’s leading originator and servicer of residential mortgages, offering home loans to consumers through the country’s largest network of mortgage locations and bank branches, online, and via phone. With more than 7,500 Home Mortgage Consultants across the country and robust digital capabilities, Wells Fargo is committed to meeting Realtor® expectations and homebuyer needs. Focused on a culture of caring for communities, Wells Fargo is a proud new sponsor of the Volunteering Works grant and mentoring program to recognize the extraordinary contributions made by Realtors® in the communities where we, together, live and serve.

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Monday Minute – Week of June 5, 2017

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Advisory on Appraiser Availability

By Sehar Siddiqi, Joe Harris

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VA Clarification on Comparable Sale Properties

By Sehar Siddiqi, Joe Harris

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Voice for Real Estate 68: Hill Visits, BOD Decisions

Congress hears from REALTORS® on tax reform

NAR’s board wants to curb rent control

And homes are selling faster than ever

Hi, I’m Stephen Gasque with the National Association of REALTORS®.

More than 9,000 REALTORS® traveled to Washington in May to meet with their members of Congress. Their message: tax reform must not place an unfair burden on our nation’s homeowners.

[QUOTE]

REALTORS® favor tax reform, especially changes that will ease the burden on small businesses. But they raised a red flag when the Trump administration released a plan that would do away with many of the deductions homeowners take, including real estate taxes and other state and local taxes. Even if owners can still deduct mortgage interest, the loss of those other deductions, in combination with other changes under consideration, would lead to a more than 800-dollar increase in taxes on average for middle-income homeowners, who earn between $50,000 and $200,000 a year.

[QUOTE]

In hundreds of meetings with lawmakers, REALTORS® were armed with research commissioned by NAR that found home prices would drop by an average 10.3 percent across the nation if the Administration’s plan were to take effect. That reform proposal would consolidate individual tax brackets from five to three, lower rates, double the standard deduction, and eliminate all itemized deductions except those for mortgage interest and charitable giving.

Homeowners would end up losing almost one trillion dollars in tax savings, a drop of more than 80 percent.

NAR’s position is: That’s an unfair burden to place on our nation’s homeowners, who already pay more than 80 percent of all personal income taxes in the United States.

You can access all of the research findings by searching “impact of tax reform options” on nar.realtor.

[SWOOSH]

The Capitol Hill visits by REALTORS® were just part of the action in Washington during the NAR’s legislative meetings. There were hundreds of education classes, committee sessions, and forums over the course of the week.

And at its meeting capping off the event, NAR’s board of directors voted on new policy positions in support of the nation’s REALTORS®.

First, the board voted to reaffirm NAR’s commitment to maintaining a federal guarantee for conventional mortgage financing. NAR also will continue to advocate for making loans receiving federal guarantees assumable. That would protect homebuyers, including move-up buyers, from seeing their buying power eroded by rising interest rates.

Other positions the board voted on:

  • Opposing the rise in rent control measures by state and local governments
  • Maintaining its support of the Consumer Financial Protection Bureau, which helps combat fraud and abuse in the lending
  • industry. But NAR also wants the agency to be overseen by a five-person commission rather than a single director.
  • And removing federally backed reverse mortgages from the way FHA calculates the amount of reserves it maintains in its
  • main insurance fund.

[SWOOSH]

A minor pause in home sales last month.

NAR’s existing-home sales figures for April declined by about 2 percent to a 5.57 million sales pace. That’s still one of the highest levels over the last 12 months, and there’s no sign of any let-up in demand. In fact, the number of days the typical listing is on the market has fallen from 34 days to 29 days. That’s the first time that days-on-market fell below a month. Dannielle Hale, NAR’s managing director of housing research, has more.

[QUOTE]

We’ll have more on how home sales are doing across the country next week when NAR releases its forward-looking pending home sales index.

[SWOOSH]

Before we leave you, a special thank-you to the thousands of REALTORS® who traveled to Washington this month. You’re doing important work when you take time out from your business to make your voice heard at our nation’s Capitol.

And that’s our show for the week of May 29. You can get more on everything we talked about at the Voice for Real Estate page on nar.realtor. Thank you for joining us. And we hope to see you again next time, as we bring you all the latest news, on the Voice for Real Estate!

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Pending Home Sales Scale Back 1.3 Percent in April

WASHINGTON (May 31, 2017) — Pending home sales in April slumped for the second consecutive month and were down year-over-year nationally and in all four major regions, according to the National Association of Realtors®. Only the West saw an increase in contract signings last month.  

The Pending Home Sales Index,* www.nar.realtor/topics/pending-home-sales, a forward-looking indicator based on contract signings, decreased 1.3 percent to 109.8 in April from a downwardly revised 111.3 in March. After last month’s decline, the index is now 3.3 percent below a year ago, which is the first year-over-year decline since last December and the largest since June 2014 (7.1 percent).   

Lawrence Yun, NAR chief economist, says contract activity is fading this spring because significantly weak supply levels are spurring deteriorating affordability conditions. “Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market,” he said. “Realtors® are indicating that foot traffic is higher than a year ago1, but it’s obviously not translating to more sales.”  

Added Yun, “Prospective buyers are feeling the double whammy this spring of inventory that’s down 9.0 percent from a year ago2 and price appreciation that’s much faster than any rise they’ve likely seen in their income.”  

Unfortunately, Yun believes there is little evidence these astoundingly low supply levels are going away soon. Homebuilding activity has not picked up enough this year and too few homeowners are listing their home for sale.

“The unloading of single-family homes purchased by real estate investors during the downturn for rental purposes would also go a long way in helping relieve these inventory shortages,” said Yun. “To date, there are no indications investors are ready to sell. However, they should be mindful of the fact that rental demand will soften as the overall population of young adults starts to shrink in roughly five years.”

Yun forecasts existing-home sales to be around 5.64 million this year, an increase of 3.5 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast decreased 1.7 percent to 97.2 in April, and is now 0.6 percent below a year ago. In the Midwest the index fell 4.7 percent to 104.4 in April, and is now 6.1 percent lower than April 2016.

Pending home sales in the South declined 2.7 percent to an index of 125.9 in April and are now 2.3 percent below last April. The index in the West jumped 5.8 percent in April to 100.0, but is still 4.2 percent below a year ago.  

Members of the media are invited to attend the upcoming Sustainable Homeownership Conference on June 9 at University of California’s Memorial Stadium in Berkeley. In celebration of National Homeownership Month, the conference brings together experts to examine housing trends and real estate’s positive impacts. Yun, NAR’s 2017 President William E. Brown and Berkeley Hass Real Estate Group Chair Ken Rosen are among the prominent experts scheduled to speak. To register contact Adam DeSanctis, 202-383-1178 or adesanctis@realtors.org. 

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 According to April’s Realtors® Confidence Index, the Buyer Traffic Index registered at 75 in April 2017 (74 in March 2017; 70 in April 2016).

2 Total housing inventory at the end of April climbed 7.2 percent to 1.93 million existing homes available for sale, but is still 9.0 percent lower than a year ago (2.12 million)

3 First-time buyers were 34 percent of sales in April, which was the highest since last September and July 2012.

* The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Existing-Home Sales for May will be reported June 21, and the next Pending Home Sales Index will be June 28; all release times are 10:00 a.m. ET.

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Hearing Held on PHH v. CFPB

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House Releases Flood Insurance Bill

By Austin Perez, Ken Wingert, Erin Stackley

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NAR Opposes USDA Reorganization

By Megan Booth, Sehar Siddiqi, Joe Harris

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Existing-Home Sales Slip 2.3 Percent in April; Days on Market Falls to Under a Month

WASHINGTON (May 24, 2017) — Stubbornly low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days, according to the National Association of Realtors®.

Total existing-home sales1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month’s decline, sales are still 1.6 percent above a year ago and at the fourth highest pace over the past year.

Lawrence Yun, NAR chief economist, says every major region except for the Midwest saw a retreat in existing sales in April. “Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” he said. “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.” 

The median existing-home price2 for all housing types in April was $244,800, up 6.0 percent from April 2016 ($230,900). April’s price increase marks the 62nd straight month of year-over-year gains.

Total housing inventory3 at the end of April climbed 7.2 percent to 1.93 million existing homes available for sale, but is still 9.0 percent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago.  

“Realtors® continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” added Yun. “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”

Properties typically stayed on the market for 29 days in April, which is down from 34 days in March and 39 days a year ago, and surpasses last May (32 days) as the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 88 days in April, while foreclosures sold in 46 days and non-distressed homes took 28 days. Fifty-two percent of homes sold in April were on the market for less than a month (a new high).

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in April were San Jose-Sunnyvale-Santa Clara, Calif., 23 days; San Francisco-Oakland-Hayward, Calif., 25 days; Denver-Aurora-Lakewood, Colo., 27 days; and Seattle-Tacoma-Bellevue, Wash., 28 days.  

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the first time in six months, dipping to 4.05 percent in April from 4.20 percent in March. The average commitment rate for all of 2016 was 3.65 percent.

“Mortgage rates have been stuck in a holding pattern in recent months, which is a relief for spring homebuyers,” said Yun. “With price growth showing little sign of slowing, prospective first-time buyers will be the most sensitive to any sudden uptick in rates in the months ahead.”  

Matching the highest percentage since last September, first-time buyers were 34 percent of sales in April, which is up from 32 percent both in March and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.

President William E. Brown, a Realtor® from Alamo, California, says it’s not only prospective homebuyers who are facing housing issues; many middle-income homeowners who benefit from the mortgage interest deduction could be slapped with a tax increase if some of the tax reform proposals currently being discussed go through. A recently released study commissioned by NAR titled, “Impact of Tax Reform Options on Owner-Occupied Housing,” estimated taxes would rise on average by $815 each year for homeowners with adjusted gross incomes between $50,000 and $200,000. Furthermore, home values could shrink by an average of more than 10 percent, with areas with higher property taxes or state income taxes experiencing an even steeper decline.

“Realtors® support tax reform, but any plan that effectively nullifies the current tax benefits of owning a home is a non-starter for the roughly 75 million homeowners and countless prospective first-time buyers that see owning a home as part of their American Dream,” said Brown. Thousands of Realtors® took this message to Capitol Hill last week during NAR’s annual legislative meetings in Washington, D.C.

All-cash sales were 21 percent of transactions in April, down from 23 percent in March and 24 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in April, unchanged from March but up from 13 percent a year ago. Fifty-seven percent of investors paid in cash in April.

Distressed sales5 – foreclosures and short sales – were 5 percent of sales in April, down from 6 percent in March and 7 percent a year ago. Three percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in April (16 percent in March), while short sales were discounted 12 percent (14 percent in March).

Members of the media are invited to attend the upcoming Sustainable Homeownership Conference on June 9 at University of California’s Memorial Stadium in Berkeley. In celebration of National Homeownership Month, the conference brings together experts to examine housing trends and real estate’s positive impacts. NAR’s Brown and Yun and Berkeley Hass Real Estate Group Chair Ken Rosen are among the prominent experts scheduled to speak. To register contact Adam DeSanctis, 202-383-1178 or adesanctis@realtors.org.  

Single-family and Condo/Co-op Sales

Single-family home sales decreased 2.4 percent to a seasonally adjusted annual rate of 4.95 million in April from 5.07 million in March, but are still 1.6 percent above the 4.87 million pace a year ago. The median existing single-family home price was $246,100 in April, up 6.1 percent from April 2016.

Existing condominium and co-op sales declined 1.6 percent to a seasonally adjusted annual rate of 620,000 units in April, but are still 1.6 percent higher than a year ago. The median existing condo price was $234,600 in April, which is 5.6 percent above a year ago.

Regional Breakdown

April existing-home sales in the Northeast dipped 2.7 percent to an annual rate of 730,000, and are now 2.7 percent below a year ago. The median price in the Northeast was $267,700, which is 1.6 percent above April 2016.

In the Midwest, existing-home sales increased 3.8 percent to an annual rate of 1.36 million in April, but are 0.7 percent below a year ago. The median price in the Midwest was $194,500, up 7.8 percent from a year ago.

Existing-home sales in the South in fell 5.0 percent to an annual rate of 2.30 million, but are still 3.6 percent above April 2016. The median price in the South was $217,700, up 7.9 percent from a year ago.

Existing-home sales in the West declined 3.3 percent to an annual rate of 1.18 million in April, but are still 3.5 percent above a year ago. The median price in the West was $358,600, up 6.8 percent from April 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

NOTE: NAR’s Pending Home Sales Index for April is scheduled for release on May 31, and Existing-Home Sales for May will be released June 21; release times are 10:00 a.m. ET.

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May 2017 GAD Briefing

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Monday Minute – Week of May 22, 2017

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Internal News Service Special Report

NAR Reaffirms Support of Project Upstream

The NAR Board of Directors voted to continue its support of Upstream, the technology developed to give brokers and agents a better way to manage their listing data and direct its distribution to MLSs, vendors, and third-party listing aggregators. 

Spearheaded by the broker-run UpstreamRE LLC, the technology has been successfully demonstrated by RMLS, a REALTOR® owned MLS operating in the Portland, Ore., area. Several other demonstrations are planned for this summer with brokers and MLSs around the country. 

In comments to the Board, Upstream Chairman Dan Elsea likened Upstream to technologies that exist in other industries, including ATPCO, the source of airline fare-related data. Elsea heads one of the nation’s largest independent brokerages, Real Estate One, but said Upstream will benefit large and small brokerages alike. 

The vote authorizes NAR to fund $1.5 million for administrative costs through 2018, as well as up to $7.5 million to support deployment of the technology by REALTORS® Property Resource, the NAR subsidiary that developed the technology. Earlier in the week, UpstreamRE announced a new “broker of choice” model, which will enable listing data to be input directly into Upstream or flow to Upstream from the MLS. 

The Board’s decision came at its May 20 meeting, which capped off the REALTORS® Legislative Meetings Trade Expo in Washington. Nearly 10,000 REALTORS® and others attended the meetings and made visits to their members of Congress to advocate on behalf of homeowners, commercial property investors, and strong communities.

The board also approved measures dealing with federal policy, MLS policy, and credentialing of officer candidates. Here are highlights.

CFPB Structure Change Sought

The Board supported a proposal to restructure the Consumer Financial Protection Bureau (CFPB) by replacing the current single-director arrangement with a five-member board whose members would be appointed by the president and confirmed by the Senate. Under the proposal, no more than three CFPB board members would come from one political party. The existing independent agency structure and funding sources would remain unchanged.

ADA Lawsuits Should Be Last Resort

The Board called for legislation requiring that parties who claim violations of the Americans with Disabilities Act (ADA) notify the person or organization responsible for the alleged violation and give them an opportunity to remedy it before filing a lawsuit.

FHA Fund Calculations

The Board supported the exclusion of reverse mortgages when HUD calculates the minimum capital reserve required for the Mutual Mortgage Insurance Fund (MMIF). While the FHA’s insurance program for single-family mortgages is growing and financially stable, the FHA’s Home Equity Conversion Mortgage (HECM) program has been unstable. Keeping the programs separate would help provide a more realistic picture of the FHA’s financial health. 

Opposition to Rent Control

In response to the growing number of rent control programs that have been implemented by states and localities in recent years, the Board adopted an updated rent control policy statement to replace the one that has been in place since 1997. The new statement reiterates NAR’s position that government programs that limit rent increases or impose other rent-related restrictions on landlords unfairly restrict private property rights. Under the policy, NAR encourages local and state associations to oppose legislative measures that allow for rent control or rent stabilization programs. 

Legal Assistance

The board allocated $500,000 to support two state REALTOR® associations and two other organizations in the following legal cases:

  • A copyright-infringement suit filed by the California Association of REALTORS® against a website that has posted copyrighted CAR forms and refused to remove them.
  • A suit that an organization in Oregon intends to file against the National Marine Fisheries Service in response to the service’s decision that FEMA’s implementation of the National Flood Insurance Program violates the Endangered Species Act.
  • A suit filed against the city of Portland, Ore., seeking to invalidate an ordinance that requires landlords to provide relocation assistance to tenants in certain cases. NAR funds will be used to reimburse the Oregon Association of REALTORS® for expenses related to its support for the case.
  • A suit filed by a Guam organization claiming that the federal government’s decision to sharply reduce the percentage of requests for H2B temporary worker visas it approves is arbitrary and harmful to Guam’s economy.

MLS Policy Changes

The Board updated the NAR Lockbox Security Requirements to reflect technology changes, particularly the increasing use of mobile devices. In addition, the Board approved the use of voice-activated services to deliver IDX listing information. Finally, the Board changed the model IDX rules to require that listing brokers be identified in all IDX displays; previously, listing broker attribution was optional. 

Government-Sponsored Enterprises

As the federal government considers reform of the secondary mortgage market, the Board reaffirmed NAR’s position that any successor to Fannie Mae or Freddie Mac maintain an explicit government guarantee to ensure that mortgage funds remain available to credit-worthy homebuyers, even during economic downturns. In an addition to NAR’s Housing Finance Reform Principles, the board took the position that loans syndicated through government-guaranteed mortgage-backed securities should be assumable. The board also heard the following reports. 

The REALTORS® Information Network

Bob Goldberg, president and CEO of the REALTORS® Information Network and a senior vice president for NAR, said more than 100,000 members had registered for a .realtor top-level domain. 

realtor.com®

Luke Glass, executive vice president of Move Inc., told the Board that consumer awareness of realtor.com® is at 88 percent and said that the site now ranks third across the internet (behind just YouTube and Facebook) in terms of how much time users spend per session. Glass also described a variety of innovations, including virtual reality tours, a service that will allow people to get neighborhood information using the camera on their mobile device, and a new resource section that enables members to easily share realtor.com content with consumers. 

Realtors Property Resource®

About 98 percent of multiple-listing services now provide data to Realtors Property Resource® (RPR®), according to RPR® CEO Dale Ross. About 700,000 real estate professionals now use RPR® on an annual basis, and 158,000 “power users” tap the service regularly. 

Distinguished Service Awards

Jack Woodcock, GRI, CCIM, CRS, SRES, of Las Vegas, and Robert (Bob) Kulick, GRI, CCIM, of Monte Sereno, Calif., were announced as NAR Distinguished Service Award recipients. Woodcock and Kulick will receive their awards during the at the next Board meeting, Nov. 6 in Chicago. 

RPAC

RPAC has raised more than $17.5 million so far in 2017, more than half of its 2017 goal of $31.3 million. The number of major investors is up 19 percent.

Financials

NAR dues will remain at $120 for 2018, with $40 of this amount allocated for REALTOR® Party programs. The association membership stands at 1.23 million, and NAR forecasts 1.24 million members in 2018.

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Realtors® Have a Positive Outlook for Commercial Markets in 2017

WASHINGTON (May 19, 2017) – While challenges face commercial real estate markets, Realtors® specializing in the sector should have confidence that growth will continue. That’s according to speakers at a commercial economic issues and trends forum at the REALTORS® Legislative Meetings Trade Expo.

NAR Chief Economist Lawrence Yun led a panel discussion about the economic forces shaping commercial real estate markets; the panelists agreed that the market has improved and that continued growth in the economy will further drive activity, but difficulties remain regarding availability of financing for smaller commercial properties.

George Ratiu, NAR director of quantitative and commercial research, said that increased trade and the rise of e-commerce has boosted rents in the industrial and warehouse sector. “During a time of transformation in consumer shopping habit, vacancy rates will still continue to see a gradual decline in warehousing and strong rent growth will continue,” he said.

Unemployment has declined to 4.4 percent and consumer confidence is at its highest point in 15 years. As the economy improves, the commercial real estate market has continued to improve as well, said Yun. “A rising interest rate environment is likely to halt commercial price growth or even cause a minor decline; that outlook is supported by the expanding economy and the over 2 million jobs gained in the past year,” he said.

Looking at the global market, Ratiu explained that global commercial investors have hit the pause button on investments, which in the first quarter of 2017 decreased nearly 20 percent year-over-year; however, certain U.S. markets are seeing good global cash flow with $76 billion flowing to the U.S. “Overall global investments are down, while the San Francisco, Dallas, Charlotte, Houston and Baltimore markets have experienced large sales volume gains,” he said.

With the blip in overall global investments in the first quarter, international buyers are likely to play a greater role in the U.S. market this year. “Over the past five years, a near majority of Realtors® experienced an increase in the number of international clients. We expect international buying activity to grow in 2017, which will have an overall positive impact on the commercial market’s gradual recovery,” said Yun.

One major hurdle that continues to affect the market is the lack of available financing to small commercial real estate investors, due in large part to regulatory uncertainty.

“Realtors® are seeing evidence of markets being impacted by regulators’ increased scrutiny of banks’ balance sheet allocations to commercial real estate loans,” said Ratiu. “Considering that 64 percent of Realtor® clients get their financing from banks, this is likely to impact deal flow as lending conditions tightened in 37 percent of Realtors®’ markets, a four percent increase from last year.”

John Worth, senior vice president of research and investor outreach at the National Association of Real Estate Investment Trusts, discussed the performance of commercial real estate investment and its status among other investment sectors. “Real estate investment is currently the best performing asset class. Strong returns and the level of new commercial supply we are seeing today is making up for a lot of missing sectors, following the economic downturn. The first quarter of this year saw a slight decrease, but 2017 is experiencing an overall healthy trend,” he said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

###

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Foreign Buyers and Immigration Expected to Drive Future Demand for U.S. Housing

WASHINGTON (May 19, 2017) – U.S. real estate markets are increasingly becoming international, and changing demographics brought forth by immigration and growing interest from foreigners are positioned to bolster home sales activity and prices. That’s according to speakers at an international real estate forum organized by the REALTOR® University Richard J. Rosenthal Center for Real Estate Studies session here at the 2017 REALTORS® Legislative Meetings Trade Expo.

NAR’s Danielle Hale, managing director of housing research, was joined by Alex Nowrasteh, immigration policy analyst at the Center for Global Liberty and Prosperity at the Cato Institute, to share insight on the current and future impact of foreign buyers and immigration on the U.S. housing market.  

According to Nowrasteh, the rising U.S. population is being bolstered by a growing number of immigrant households, and their presence will continue to transform the housing market. Referring to data from the 2015 American Community Survey, Nowrasteh said of the roughly 321.4 million residents in the U.S., 278.1 million are born here (natives) and the remaining 43.3 million – made up of 20.7 million naturalized citizens and 22.6 million non-citizens – are foreign-born.  

“Immigration affects rents and home prices far more than it affects the labor market,” said Nowrasteh. “An expected 1 percent increase in a city’s population produces a 1 percent uptick in rents, while an unexpected increase results in a 3.75 percent rise.”

Nowrasteh, pointing to studies conducted on immigration and housing, explained that the effects of immigration on real estate are localized, with most of the impact felt where immigrants tend to reside: low-to-middle income counties. Each immigrant adds 11.6 cents to housing value within that county. In 2012, 40 million immigrants added roughly $3.7 trillion to U.S. housing wealth.

Referencing the Legal Arizona Workers Act that went into effect on January 1, 2008, Nowrasteh said the decline in population resulting from the law likely exasperated the drop in home prices the state experienced during the downturn. Fewer households purchasing or renting property subsequently lead to higher vacancies and lower prices. “Immigration is the best way to increase population, housing supply and prices,” he said.

Presenting some of the key findings from NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate released last July, Hale said foreigners increasingly view the U.S. as a great place to buy and invest in real estate. She noted the upward trend in sales activity from resident and non-resident foreign buyers1 in the past seven years, with total foreign buyer transactions increasing from $65.9 billion in 2010 to $102.6 billion in the latest survey.

 “A majority of foreign buyers in recent years are coming from China, which surpassed Canada as the top country by dollar volume of sales in 2013 and total sales 2015,” said Hale. “Foreign buyers on average purchase more expensive homes than U.S. residents and are more likely to pay in cash.”

Perhaps foreshadowing where a bulk of future home purchases from immigrants will come from, Hale said that in NAR’s latest survey roughly over half of all foreign buyers purchased property in Florida (22 percent), California (15 percent), Texas (10 percent), Arizona or New York (each at 4 percent). Latin Americans, Europeans and Canadians – who tend to buy for vacation purposes in warm climates – mostly sought properties in Florida and Arizona. Asian buyers were most attracted to California and New York, while Texas mostly saw sales activity from Latin American, Caribbean and Asian buyers.

NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate survey is scheduled for release this summer. Looking at the past year, Hale said monthly data from the Realtors® Confidence Index revealed a rise in responses from Realtors® indicating they worked with an international buyer.

“Chinese buyers are once again expected to top all countries in both total dollar volume and overall sales,” said Hale.  

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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1The term international or foreign client refers to two types of clients: non-resident foreigners (Type A) and resident foreigners (Type B).

Non-resident foreigners: Non-U.S. citizens with permanent residences outside the United States. These clients typically purchase property as an investment, for vacations, or other visits of less than six months to the United States.

Resident foreigners: Non-U.S. citizens who are recent immigrants (in the country less than two years at the time of the transaction) or temporary visa holders residing for more than six months in the United States for professional, educational, or other reasons.

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Second Century Ventures adds Adwerx and immoviewer to 2017 REach® Accelerator Class

WASHINGTON (May 17, 2017) — Two more innovative technology companies have been selected to join REach®, a growth technology accelerator program from the National Association of Realtors®’ strategic investment arm, Second Century Ventures. Adwerx, a digital advertising provider, and immoviewer, a 3-D virtual tour technology company, will join the seven other companies announced last month as part of the fifth REach class.

REach provides early-to mid-stage companies with access to NAR’s industry expertise, influence and key relationships to help launch companies into the real estate, financial services, banking, home services and insurance industries.

“This year we had a record number of applications, which demonstrates REach’s value proposition to participating companies and the tremendous opportunity there is for them in the trillion dollar real estate industry,” said Dale Stinton, president of SCV and NAR CEO. “We are excited by the talent and diversity of innovation among the nine selected companies and are eager to kick off our 2017 cohort with the final addition of Adwerx and immoviewer.”

Adwerx provides cost-effective, highly-targeted and localized online advertising for real estate brokers, agents and listings. “By participating in the NAR REach program, Adwerx is in a great position to expand our footprint in real estate and strengthen our relationship with NAR. The opportunity to be part of the class of 2017 is perfect timing for us with the launch of our enterprise offering of marketing automation to brokers and franchises,” said Adwerx CEO Jed Carlson.

The newest trend in real estate listing marketing is 360 degree virtual tours, and immoviewer’s 3-D virtual tour software makes the process simple and affordable. “As the European market leader in 3-D virtual tour technology and the first international company to be selected to participate in the REach program, we are excited about the opportunity to accelerate and expand the use of this technology among real estate professionals in the U.S.” said immoviewer CEO Ralf von Grafenstein.

The seven other organizations making up the 2017 REach class are Centriq, an app that transfers home repair and maintenance knowledge from the seller to the buyer and keeps agents connected to their clients after the transaction; HouseCanary, a leading source for residential valuations and analytics; Notarize: a remote electronic notary service; Occly: a portable alarm solution that helps protect real estate professionals and properties; Pearl Certification, which certifies homes with features that contribute to its comfort, energy performance, indoor air quality and value; Relola, a site for agents to share insights about local listings, neighborhoods and service providers with clients; and Trusted Mail, a certification program that uses facial-biometrics to sign and encrypt email and attachments to protect against wire fraud and email spoofing.

NAR’s 2017 REach accelerator companies will be showcasing their innovative technology solutions this week during the REALTORS® Legislative Meetings in Washington, D.C., at the trade expo on Wednesday, May 17 and Thursday, May 18 from 10:00 a.m. to 6:00 p.m. at booth #1731.

Second Century Ventures is an early-stage technology fund, backed by the National Association of Realtors® that leverages the association’s 1.2 million members and an unparalleled network of executives within real estate and adjacent industries.  SCV systematically launches its portfolio companies into the world’s largest industries including real estate, financial services, banking, home services, and insurance. SCV seeks to define and deliver the future of the world’s largest industries by being a catalyst for new technologies, new opportunities, and new talent.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Tax Reform Could Deliver a Tax Hike for Homeowners: New Research

WASHINGTON (May 18, 2017) – While tax reform proposals swirling around Washington, D.C., promise lower tax bills for American families, new estimates indicate that many middle-income homeowners may actually see a tax increase if those proposals go through.

The study, “Impact of Tax Reform Options on Owner-Occupied Housing,” illustrates the effects of a tax plan that echoes certain elements of the “Better Way for Tax Reform” or “Blueprint” proposal released last year, as well as the White House tax reform outline released in April, to which the National Association of Realtors® responded

While most individuals would see a tax decrease under such a proposal, the study estimates that many middle-class homeowners could in fact see a net average tax increase. Homeowners with adjusted gross incomes between $50,000 and $200,000 would see their taxes rise by an average of $815. The study also estimates that combined tax savings from claiming the mortgage interest deduction and real estate property tax deductions would drop 82 percent between the 2018 and 2027 period.

“Tax reform and lower rates are worthy goals, but only if we can achieve them in a fiscally responsible way,” said NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties. “Balancing tax reform on the backs of homeowners isn’t an option.”

The study, which was commissioned by NAR and prepared by PwC (PricewaterhouseCoopers), estimates that this tax increase would result from the interaction of several provisions in the reforms under consideration. For many homeowners that currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction. For others, the elimination of the state and local tax deduction alone would result in higher federal income taxes.

 In addition to increasing taxes on many middle-income homeowners, the report finds that such a proposal could cause home values to fall by an average of more than 10 percent in the near term. In areas with higher property taxes or state income taxes, the drop could be even greater. Although the study doesn’t directly analyze the “Better Way for Tax Reform” plan or the recent White House outline, it examines a proposal with many similar elements.

Those elements include lowering and consolidating marginal tax rates to only three rates, setting a top income tax rate of 33 percent, doubling the standard deduction, eliminating all itemized deductions (other than charitable contributions and mortgage interest) and personal exemptions, eliminating the alternative minimum tax, and capping the tax rate on pass-through business income at 25 percent.

PwC estimated that roughly 35 million households will claim the mortgage interest deduction in 2018, three quarters of which have incomes between $50,000 and $200,000. According to NAR, roughly 70 percent of those eligible for the MID claim it in a given tax year.

“A tax reform proposal that hikes taxes for homeowners is a raw deal, and consumers know it,” said Brown. “Leaders in Washington who are driving tax reform have shown every indication that they have the best of intentions, and we’re hopeful they’ll consider our study as this process plays out in the months ahead.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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NAR Midyear Forecast: Existing-Home Sales Poised to Climb 3.5 Percent in 2017

WASHINGTON (May 18, 2017) – The multi-year stretch of robust job gains along with improving household confidence are expected to guide existing-home sales to a decade high in 2017, but supply and affordability headwinds and modest economic growth are holding back sales and threatening to keep the nation’s low homeownership rate subdued. That’s according to speakers at a residential real estate forum here at the 2017 REALTORS® Legislative Meetings Trade Expo.

Lawrence Yun, chief economist of the National Association of Realtors®, presented his 2017 midyear forecast and was joined onstage by Jonathan Spader, senior research associate at the Joint Center for Housing Studies at Harvard University, and Mark Calabria, chief economist and assistant to Vice President Mike Pence. Spader’s presentation addressed past and projected movements in the homeownership rate, and Calabria dove into why reversing weak productivity and the low labor force participation rate are necessary to boost the economy.

The first quarter was the best quarterly existing sales pace in exactly a decade (5.62 million), and Yun expects activity to stay on track and finish around 5.64 million – the best since 2006 (6.47 million) and 3.5 percent above 2016. With several metro areas seeing hefty price growth, the national median existing-home price is expected to rise around 5 percent this year.

“The housing market has exceeded expectations ever since the election, despite depressed inventory and higher mortgage rates,” said Yun. “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation and rising consumer confidence are giving more households the assurance and ability to purchase a home.”   

Although sales are currently running at a decade high, Yun believes the healthy labor market should be generating even more activity. However, listings in the lower- and mid-market price range are scant and selling fast, and homebuyers are discovering they can afford less of what’s on the market based on their income.

“We have been under the 50-year average of single-family housing starts for 10 years now,” said Yun. “Limited lots, labor shortages, tight construction lending and higher lumber costs are impeding the building industry’s ability to produce more single-family homes. There’s little doubt first-time buyer participation would improve and the homeownership rate would rise if there was simply more inventory.”

Housing construction has been uneven so far this year, but Yun does anticipate starts to jump 8.4 percent to 1.27 million. However, this is still under the 1.5 million new homes needed to make up for the insufficient building in recent years. New single-family home sales are likely to total 620,000 this year, up 8.4 percent from 2016.

Addressing the nation’s low homeownership rate, Spader said substantial uncertainty exists about its future direction. He cited foreclosure-related housing exits from older adults and delayed buying from younger households as the primary causes in the downward trend since the downturn. He said the good news is that while there was growth in homeowner households in 2016, an aging population, changes in family type and increasing diversity by race and ethnicity all pose as headwinds going forward. Spader’s 2025 projection puts the homeownership rate in a range of 61.0 – to – 65.1 percent.

“Stagnant household incomes, rising rental costs, student loan debt and limited supply have all contributed to slower purchasing activity,” said Spader. “When the homeownership rate stabilizes, there will be an increase in homeowner households. Young and minority households’ ability to reach the market will play a big role in how much the actual rate can rise in coming years.”

Calabria’s presentation focused on his thoughts of what can be done to jump-start economic growth. He attributed prolonged weak productivity and the low labor participation rate as the primary reasons why the current economic expansion is the slowest since World War II.

“A strong labor market will drive a strong housing market, but you can’t have a strong housing market without a strong economic foundation,” said Calabria. “The recovery has been uneven with roughly 70 counties making up roughly half of all job growth. The White House’s proposed plans to cut corporate and individual tax cuts will help large and small businesses grow, hire and ultimately contribute to more households buying homes as more money goes into their pockets.”

Although Yun said economic growth in the first quarter was “a huge disappointment” at 0.7 percent (first estimate), he anticipates that an increase in consumer spending and more homebuilding should provide enough fuel for gross domestic product to finish slightly higher, at 2.2 percent, than a year ago (1.6 percent). 

Yun believes the rising interest rate environment is here to stay as the Federal Reserve slowly begins unwinding its balance sheet. He foresees two more short-term rate hikes by the end of this year and for mortgage rates to average around 4.30 percent before gradually climbing towards 5.0 percent by the end of 2018.

“There was a lot of uncertainty at the start of the year, but a very strong first quarter sets the stage for a modest sales increase compared to last year,” said Yun. “However, prices are still rising too fast in many areas and are outpacing incomes. That is why housing starts need to rise to alleviate supply shortages. There will be more sales if there’s a meaningful bump in new and existing inventory.”

Members of the media are invited to attend the upcoming Sustainable Homeownership Conference on June 9 at University of California’s Memorial Stadium in Berkeley. In celebration of Homeownership Month, the conference brings together experts to examine housing trends and real estate’s positive impacts. 2017 NAR President Bill Brown, NAR Chief Economist Dr. Lawrence Yun and Berkeley Hass Real Estate Group Chair Ken Rosen are among the prominent experts scheduled to speak. To register, visit www.nar.realtor/homeconfreg.nsf/specialreg?openform.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE:  Existing-Home Sales for April will be released May 24, and the Pending Home Sales Index for April will be released May 31; release times are 10:00 a.m. ET.

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Is Mortgage-Interest Deduction the Best Way?

By William E. Brown, Granger MacDonald

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HUD Secretary Carson Highlights Possible Improvements to Homeownership Programs

HUD Secretary Dr. Ben Carson speaks at the Regulatory Issues Forum at the 2017 REALTORS® Legislative Meetings Trade Expo in Washington, DC.

WASHINGTON (May 16, 2017) — Potential homebuyers have a lot to contend with from tight credit and low inventory to rising prices. But for buyers who are able to muscle past these hurdles, Realtors® know that tough-to-make deals can still fall apart when needlessly high regulatory burdens get in the way.

That point was made clear by and received loud applause for Dr. Ben Carson, secretary of Housing and Urban Development, who told attendees at the REALTORS® Legislative Meetings Trade Expo that HUD is working to make improvements with the goal of ushering in a new era of homeownership.

“It’s important to be able to learn from success and from failure,” Carson said. “That’s what wisdom is all about.”

NAR for years has pushed for reforms at the Federal Housing Administration – a program office under HUD’s jurisdiction – that would make it easier for homebuyers to utilize FHA’s low-down payment financing options.

One example is NAR’s call for FHA to address current restrictions on the treatment of condominiums. An NAR-backed rule that would make it easier to buy a condo with FHA financing has been pending since September 2016, and Realtors® welcomed an update from Dr. Carson on the status of the rule. He said that on the issue of condos, HUD’s position is in “lock step” with that of Realtors®. “I can assure you that this rule has very high priority,” Carson said. “I think it will make a big difference to a lot of Americans.”

NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties moderated a short QA session with Dr. Carson in which Brown raised the condo rule issue, as well as some other key concerns facing Realtors®.

“Condominiums are an affordable option that many young and first-time buyers look to when they start their home search, but using an FHA loan to buy a condo is still a real challenge,” said Brown. “Finishing work on the condo rule would offer some much-needed clarity and relief.”

Realtors® have also long-supported an end to so-called “life of loan” mortgage insurance. On a conventional mortgage, borrowers typically must pay for mortgage insurance if they have less than 20 percent equity in the property. When the homeowner reaches that 20 percent equity mark, they’re usually able to cancel the mortgage insurance and put those monthly payments back in their pocket.

With an FHA mortgage, however, borrowers must maintain costly mortgage insurance for the entire life of the loan. That needlessly takes money from the consumer and offers an incentive for strong borrowers to leave the program, potentially weakening FHA’s book of business. For those reasons, eliminating the life of loan requirement is a priority for Realtors®.

In addition to condo rules and life of loan mortgage insurance, Brown raised another Realtor® priority: reinstating a cut to the mortgage interest premium FHA charges for its loans. FHA announced in January that it was cutting annual premiums consumers pay for mortgage insurance from 0.85 percent to 0.60 percent, but the cut was rescinded under the new administration just a few weeks later. FHA has said that the decision to reinstate the cut is still under review.

Brown said that while Realtors® were disappointed that the MIP cut didn’t go through, HUD leaders, including Dr. Carson, have shown a consistent willingness to work with NAR and its members to achieve a common goal in support of homeownership.

Brown also raised the issue of Property Assessed Clean Energy loans. Although Realtors® support the energy efficiency benefits of PACE loans, they have warned that consumers are burdened with a lack of transparency and information that can threaten home buying and selling. To address these concerns, Realtors® believe PACE loans should be subject to the same consumer disclosure laws as mortgages. Dr. Carson said HUD is “very amenable to adjusting that policy in the future.” Realtors® responded to that with applause.

“I can’t thank Dr. Carson enough for speaking to our membership and giving us his honest assessment of the road ahead,” said Brown. “We can do so much more to clear the way for creditworthy buyers trying to enter the market, and HUD is at the center of those conversations. Realtors® value their partnership with HUD and leaders like Dr. Carson, and we look forward to doing big things in the years to come.” 

Following Dr. Carson’s remarks, attendees heard from Roy Wright of the Federal Emergency Management Agency. Wright is the deputy associate administrator for Insurance and Mitigation, with oversight over the National Flood Insurance Program. Wright told the audience that while challenges remain in ensuring access to affordable flood insurance, a multi-year reauthorization of the program is critical for protecting homeowners.

In addition, Wright announced what he described as a “moon shot” type effort inside FEMA. “We want to see the flood cover in the U.S. doubled by 2023,” he said. “In seven years I want to see us have 10 million policies across the U.S.” Wright added that he hoped the greatest proportion of those policies could happen in the private market.

Brown noted that flood insurance is among Realtors® top issues for 2017 and thanked Wright for his attention to what has become a growing concern for homeowners. “Hurricane season is just around the corner, and a September 30 expiration date for the NFIP has homeowners rightfully on edge,” said Brown. “We know more can be done to improve the program, make way for a private insurance market, and strengthen flood mapping and mitigation efforts, and there’s no small amount of work ahead of us. But it’s encouraging to know that as we tackle these challenges, we have an engaged and open partner at FEMA willing to work hand in hand with Realtors® on behalf of homeowners.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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REALTOR Benefits® Partner Placester Offers Free Websites to All Realtors®

WASHINGTON (May 17, 2017) – Last year, Realtors® spent a median of $70 to maintain a website. To help reduce business costs, Placester, a real estate website and marketing platform, is extending its partnership with the National Association of Realtors® to bring a basic “NAR Edition” website to the association’s 1.2 million members at no charge. NAR members will also receive discounts on advanced website features and products.

Placester is an all-in-one business platform and provides industry-leading sales and marketing solutions for real estate professionals, including lead-capturing websites, client management tools, marketing automation and analytics, and an online academy featuring an extensive library of educational resources. Placester’s exclusive websites and discounts for NAR Members are made possible through NAR’s REALTOR Benefits® Program.

“With nine in 10 homebuyers citing websites as their most useful source of information, Placester and NAR recognize that in order to succeed, agents need an online foundation that promotes their brand and provides value to the consumer,” said Matt Barba, CEO, Placester. “This partnership will enable every Realtor® to build an online presence that they control. Placester’s mission is to help each and every real estate professional with the online business tools to compete effectively online as well as face-to-face.”

With Placester’s exclusive NAR Edition website, members receive a responsive website for both web and mobile that includes IDX listing integration capability, a mortgage calculator, editable page templates, a homepage with customizable image slideshow, social media integration, the ability to add branding, and more – all for no charge.

In addition to Placester’s free edition for NAR members, Realtors® will also receive discounts on advanced site features and products, including single property websites, broker websites, and Placester’s advanced Essential, Premium, and Premium PLUS bundles, which include integrated lead management, drip marketing tools, and more.

“As technology changes the way consumers approach buying and selling homes, Realtors® are seeing an increased online demand for in-depth property and neighborhood information,” said Bob Goldberg, NAR senior vice president, Marketing and Business Development. “This expanded partnership with Placester means that every NAR member can create an effective and professional website for free for running and growing their business.”

Built on the foundation of affordable and well-designed agent websites, Placester powers the businesses of more than 400,000 real estate professionals with solutions for customer relationship management and drip email marketing, along with data-driven insights, mobile applications, and marketing services. This includes agents in 95 percent of U.S.-based real estate brands, as well as independent brokerages.

For more information on Placester’s exclusive NAR Edition, visit https://placester.com/nar/.

About the National Association of Realtors®

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

The Realtor Benefits® Program is the association’s official member benefits program, connecting members with savings and unique offers on products and services just for Realtors® from more than 30 companies recognized as leaders in their respective industries.

About Placester

Placester is an all-in-one business platform for real estate professionals with beautiful lead capturing websites, lead management, email marketing, marketing automation, analytics, free education and 24/7 support. Founded in 2011 by Matthew Barba, a former real estate agent, and Frederick Townes, a seasoned technologist, the Placester platform enables real estate professionals to grow their businesses online and via mobile through seamless MLS integration, natural language search and eye-catching visuals. In addition, Placester offers a wide range of apps and add-ons for high-impact email marketing, digital advertising campaigns, lead management and streamlining of everyday tasks. Currently serving two in five real estate professionals in the U.S., Placester is a proud technology partner to leading real estate brands across North America, and the sole website provider for the REALTOR Benefits® Program, the official member benefits program of the National Association of REALTORS®. To date, Placester has raised $100 million in funding, backed by New Enterprise Associates (NEA), Romulus Capital and Techstars. For more information, please visit placester.com.

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Regulations, Retention and Recruitment Pressing Issues for Appraisal Industry

WASHINGTON (May 17, 2017) – Any perceived shortage of appraisers may be location specific and dependent on whom you ask, but there is universal agreement that more needs to be done to keep appraisers in the profession and attract new talent. That’s according to panelists yesterday at a property valuation forum at the 2017 REALTORS® Legislative Meetings Trade Expo.

The conversation with property valuation experts comes at a time of numerous challenges within the industry. NAR’s Appraiser Trends Study released earlier this year underlined many of the ongoing issues in the profession, including regulatory burdens, insufficient compensation, and dissatisfaction in the work leading to what some say is a shortage of appraisers.            

Providing their insights on these issues and ways Realtors® can communicate more effectively with appraisers were David S. Bunton, president and CEO of The Appraisal Foundation; James Park, executive director at the Appraisal Subcommittee; and Jim Amorin, 2017 president at the Appraisal Institute. Susan Martins-Phipps, a Realtor® and certified residential appraiser, moderated the session.

Much of the discussion during the session focused on balancing the need for appropriate regulation without overly burdening the industry. Sharing their own experiences, Bunton and Amorin discussed how the multiple federal, state and international standards can conflict with each other at times and cause confusion, frustration and an inability to appropriately serve the needs of clients.

Citing NAR’s appraisal survey, Amorin said that excessive regulation is the number one reason appraisers are leaving the industry, along with decreased fees and increased expenses. While regulation serves its purpose, Amorin stressed the need for ‘appropriate updating’ given that technology and consumer preferences have changed over the past decade.  

“Appraisers are being crushed in the current regulatory environment and there are fewer people entering the profession,” said Amorin. “There are changes that can be put into place that make the process easier for everyone and not put added costs on the consumer.”

According to Park, public trust in the appraisal profession is important, and while there are certainly challenges in the industry, few of those challenges have to do with federal regulation. He also said outside of a few areas, he believes there is not a shortage of appraisal professionals. Citing the lower mortgage volume compared to the early 2000’s, Park said the number of active appraisers is proportionate to the current level of work in most of the country.

Amorin added that although the number of appraisers have declined around 23 percent since 2007, any actual shortages are primarily in some rural areas, and what some see as a shortage in quantity is actually just a dearth of appraisers willing to work for the low fees that have failed to keep up with inflation. However, Amorin did sound the alarm on what could be an inadequate number of appraisers in the future.

“The number of new entrants into the business is abysmally low, and a looming shortage is something we should be concerned about,” said Amorin. “The typical appraiser is in their mid-50s. We’ve got to find a way to make the profession more attractive and lucrative so that technology doesn’t completely take over the valuation process.”

Bunton agreed with Amorin and indicated he’s hopeful an improving housing market will bring more individuals, including millennials, to the industry. “If you’re a millennial, what’s not to like? You get to use technology, the hours are flexible and there’s always work,” he said.

The end of the session focused on bettering the appraisal process for the greater benefit of the real estate industry. While appraisers must maintain their independence, Amorin stressed the important role real estate agents can play in helping serve their clients and improve the work of appraisers. He said to applause from the crowd that it’s certainly fine for agents to talk to appraisers as long as they aren’t putting undo pressure on them.

“Regarding the relationship between appraisers and Realtors®, my message to Realtors® is to help them help you,” said Amorin.

To improve the overall appraisal experience, Bunton concluded that real estate agents should be more involved with The Appraisal Foundation and its boards to stay abreast of the issues. “Nearly half of Realtors® are on our boards, and we would certainly like to see that number even higher,” he said. “Less friction and more commonality on how to make the system more cohesive for everyone will ensure a better process.”

NAR submitted a letter late last year to the Appraiser Qualifications Board in response to their efforts to improve recruitment and retention of new appraisers. Knowing the integral part appraisers are to real estate transactions, NAR supports AQB’s revisions to some of the education and experience requirements to bring new appraisers to the industry.

For more information on NAR’s valuation activities and advocacy efforts, visit www.nar.realtor/appraisal.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Flood Insurance, Tax Reform Top Issues as Realtors® Head to Washington

WASHINGTON (May 16, 2017) – Nearly 9,000 Realtors® and industry guests are descending upon Washington this week to address regulators and members of Congress on key industry issues, including national flood insurance, tax reform and sustainable homeownership.

Realtor® members will visit U.S. House and Senate offices to urge Congress to pass a multiyear reauthorization of the National Flood Insurance Program before it expires on September 30. Additionally, Realtors® are seeking to protect sustainable homeownership by advocating for responsible reform of the secondary mortgage market, prohibiting the use of mortgage guarantee fees for any purposes other than credit-risk management and improving consumer protections for energy efficiency improvement loans.

Realtors® will also be reminding legislators that while Realtors® support tax reform, it cannot happen by diminishing the real estate tax provisions that are an essential component of a vibrant housing market and key driver of the economy.

During the meeting, attendees will also be participating in a series of on-site visits with regulatory agency staff at the Federal Aviation Administration, Federal Emergency Management Agency, U.S. Department of Treasury and the U.S. Department of Veterans Affairs.

 “With a new president and Congress in office, it’s vitally important for regulators and policymakers in Washington to hear from the nation’s Realtors® about issues affecting their businesses, communities and clients,” said National Association of Realtors® President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties, a division of his family real estate business. “Robust commercial markets and helping more Americans achieve the dream of homeownership are things we believe strongly in protecting, which is why we are here this week engaging with our senators and representatives and making our voices heard.”

This year’s meeting, which kicks off today and runs through Saturday, May 20 will also feature nearly 100 conference sessions on hot topics that range from policy to technology. Conference attendees will hear from industry experts and thought leaders, including:

  • Mark Calabria, chief economist to Vice President Mike Pence, who will discuss the market and potential administration changes and their effect on housing.
  • Dr. Ben Carson, secretary, U.S. Department of Housing and Urban Development, who will talk about access to mortgage credit and his priorities for the Federal Housing Administration.
  • John Worth, senior vice president for Research and Investor Outreach, National Association of Real Estate Investment Trusts, who will share the perspectives of publicly listed companies on current developments in commercial markets.
  • Roy Wright, deputy associate administrator for Insurance and Mitigation, Federal Emergency Management Administration, who will discuss the NFIP benefits provided to millions of home and business owners.
  • Lawrence Yun, NAR chief economist, who will share residential and commercial real estate market updates and forecasts.  

Recognizing those who play a role in making the Realtors® Political Action Committee among the largest and most bipartisan contributor to candidates, 143 Realtors® will be inducted into the RPAC 2016 Hall of Fame, which recognizes members whose aggregate RPAC investments are at least $25,000. The 2016 class is the largest ever and includes a member who has invested $150,000, the highest in RPAC’s 48-year history. Hall of Fame inductees were recognized onstage during the meetings with a plaque and lapel pin and will have their name inscribed on the Hall of Fame placard on the rooftop of NAR’s D.C. headquarters. The list of 143 inductees is available at www.realtoractioncenter.com/rpachof.

The legislative meetings coincide with Realtors® Advocacy Month, designed to engage and educate Realtors® to vote, act and invest in advocacy issues at all levels of government. Throughout the month of May, state and local associations of Realtors® are sharing their candidate and issue campaign successes, holding voter registration drives or community outreach events, and educating members on issues important to the industry, markets and consumers.

The meeting trade expo will be open Wed., May 17 and Thur., May 18 from 10 a.m.-6 p.m. More than 100 industry-leading companies will demonstrate the latest real estate products and services.

To stay connected with the conference follow the Realtors® Legislative Live blog, live.blogs.realtor.org/, the Twitter hashtag #narlegislative, or find NAR at @nardotrealtor on Facebook and Twitter.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Impact of Tax Reform Options on Owner-Occupied Housing

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HUD Secretary Carson Highlights 3 Possible Improvements to Homeownership Programs

HUD Secretary Dr. Ben Carson speaks at the Regulatory Issues Forum at the 2017 REALTORS® Legislative Meetings Trade Expo in Washington, DC.

WASHINGTON (May 16, 2017) — Potential homebuyers have a lot to contend with from tight credit and low inventory to rising prices. But for buyers who are able to muscle past these hurdles, Realtors® know that tough-to-make deals can still fall apart when needlessly high regulatory burdens get in the way.

That point was made clear by and received loud applause for Dr. Ben Carson, secretary of Housing and Urban Development, who told attendees at the REALTORS® Legislative Meetings Trade Expo that HUD is working to make improvements with the goal of ushering in a new era of homeownership.

“It’s important to be able to learn from success and from failure,” Carson said. “That’s what wisdom is all about.”

NAR for years has pushed for reforms at the Federal Housing Administration – a program office under HUD’s jurisdiction – that would make it easier for homebuyers to utilize FHA’s low-down payment financing options.

One example is NAR’s call for FHA to address current restrictions on the treatment of condominiums. An NAR-backed rule that would make it easier to buy a condo with FHA financing has been pending since September 2016, and Realtors® welcomed an update from Dr. Carson on the status of the rule. He said that on the issue of condos, HUD’s position is in “lock step” with that of Realtors®. “I can assure you that this rule has very high priority,” Carson said. “I think it will make a big difference to a lot of Americans.”

NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties moderated a short QA session with Dr. Carson in which Brown raised the condo rule issue, as well as some other key concerns facing Realtors®.

“Condominiums are an affordable option that many young and first-time buyers look to when they start their home search, but using an FHA loan to buy a condo is still a real challenge,” said Brown. “Finishing work on the condo rule would offer some much-needed clarity and relief.”

Realtors® have also long-supported an end to so-called “life of loan” mortgage insurance. On a conventional mortgage, borrowers typically must pay for mortgage insurance if they have less than 20 percent equity in the property. When the homeowner reaches that 20 percent equity mark, they’re usually able to cancel the mortgage insurance and put those monthly payments back in their pocket.

With an FHA mortgage, however, borrowers must maintain costly mortgage insurance for the entire life of the loan. That needlessly takes money from the consumer and offers an incentive for strong borrowers to leave the program, potentially weakening FHA’s book of business. For those reasons, eliminating the life of loan requirement is a priority for Realtors®.

In addition to condo rules and life of loan mortgage insurance, Brown raised another Realtor® priority: reinstating a cut to the mortgage interest premium FHA charges for its loans. FHA announced in January that it was cutting annual premiums consumers pay for mortgage insurance from 0.85 percent to 0.60 percent, but the cut was rescinded under the new administration just a few weeks later. FHA has said that the decision to reinstate the cut is still under review.

Brown said that while Realtors® were disappointed that the MIP cut didn’t go through, HUD leaders, including Dr. Carson, have shown a consistent willingness to work with NAR and its members to achieve a common goal in support of homeownership.

Brown also raised the issue of Property Assessed Clean Energy loans. Although Realtors® support the energy efficiency benefits of PACE loans, they have warned that consumers are burdened with a lack of transparency and information that can threaten home buying and selling. To address these concerns, Realtors® believe PACE loans should be subject to the same consumer disclosure laws as mortgages. Dr. Carson said HUD is “very amenable to adjusting that policy in the future.” Realtors® responded to that with applause.

“I can’t thank Dr. Carson enough for speaking to our membership and giving us his honest assessment of the road ahead,” said Brown. “We can do so much more to clear the way for creditworthy buyers trying to enter the market, and HUD is at the center of those conversations. Realtors® value their partnership with HUD and leaders like Dr. Carson, and we look forward to doing big things in the years to come.” 

Following Dr. Carson’s remarks, attendees heard from Roy Wright of the Federal Emergency Management Agency. Wright is the deputy associate administrator for Insurance and Mitigation, with oversight over the National Flood Insurance Program. Wright told the audience that while challenges remain in ensuring access to affordable flood insurance, a multi-year reauthorization of the program is critical for protecting homeowners.

In addition, Wright announced what he described as a “moon shot” type effort inside FEMA. “We want to see the flood cover in the U.S. doubled by 2023,” he said. “In seven years I want to see us have 10 million policies across the U.S.” Wright added that he hoped the greatest proportion of those policies could happen in the private market.

Brown noted that flood insurance is among Realtors® top issues for 2017 and thanked Wright for his attention to what has become a growing concern for homeowners. “Hurricane season is just around the corner, and a September 30 expiration date for the NFIP has homeowners rightfully on edge,” said Brown. “We know more can be done to improve the program, make way for a private insurance market, and strengthen flood mapping and mitigation efforts, and there’s no small amount of work ahead of us. But it’s encouraging to know that as we tackle these challenges, we have an engaged and open partner at FEMA willing to work hand in hand with Realtors® on behalf of homeowners.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Metro Home-Price Growth Heats Up 6.9 Percent in First Quarter

WASHINGTON (May 15, 2017) — The strongest quarterly sales pace in exactly a decade put significant downward pressure on inventory levels and caused price growth to further accelerate during the first three months of 2017, according to the latest quarterly report by the National Association of Realtors®. Metro home prices have now accelerated for three consecutive quarters.

The national median existing single-family home price in the first quarter was $232,100, which is up 6.9 percent from the first quarter of 2016 ($217,200) and the fastest growth since the second quarter of 2015 (8.2 percent). The median price during the fourth quarter of 2016 increased 5.9 percent from the fourth quarter of 2015.  

Single-family home prices last quarter increased in 85 percent of measured markets, with 152 out of 178 metropolitan statistical areas1 (MSAs) showing sales price gains in the first quarter compared with the first quarter of 2016. Twenty-five areas (14 percent) recorded lower median prices from a year earlier.

Lawrence Yun, NAR chief economist, says continual supply shortages ignited faster price appreciation across the country in the first quarter. “Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” he said. “Those able to successfully buy most likely had to outbid others – especially for those in the starter-home market – which in turn quickened price growth to the fastest quarterly pace in almost two years.”

Added Yun, “Several metro areas with the healthiest job gains in recent years continue to see a large upswing in buyer demand but lack the commensurate ramp up in new home construction. This is why many of these areas – in particular several parts of the South and West – are seeing unhealthy price appreciation that far exceeds incomes.”

Thirty metro areas in the first quarter (17 percent) experienced double-digit increases (unchanged from the fourth quarter of 2016). Overall, there were slightly fewer rising markets in the first quarter compared to the fourth quarter of 2016, when price gains were recorded in 89 percent of metro areas. 

Total existing-home sales3, including single family and condos, climbed 1.4 percent to a seasonally adjusted annual rate of 5.62 million in the first quarter (highest since first quarter of 2007 at 5.66 million) from 5.55 million in the fourth quarter of 2016, and are 5.0 percent higher than the 5.36 million pace during the first quarter of 2016.

At the end of the first quarter, there were 1.83 million existing homes available for sale2, which was 6.6 percent below the 1.96 million homes for sale at the end of the first quarter in 2016. The average supply during the first quarter was 3.7 months – down from 4.2 months in the first quarter of last year.

Despite a rise in the national family median income ($71,201)4, the combination of higher mortgage rates and home prices slightly weakened affordability compared to a year ago. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $52,251, a 10 percent down payment would require an income of $49,501, and $44,001 would be needed for a 20 percent down payment.

“Last quarter’s robust pace of sales was especially impressive considering the affordability sting buyers experienced from higher prices and mortgage rates,” said Yun. “High demand is poised to continue heading into the summer as long as job gains continue. However, many metro areas need to see a significant rise in new and existing inventory to meet this demand and cool down price growth.”

The five most expensive housing markets in the first quarter were the San Jose, California, metro area, where the median existing single-family price was $1,070,000; San Francisco, $815,000; Anaheim-Santa Ana, California, $750,000; urban Honolulu, $746,000; and San Diego, $564,000.

The five lowest-cost metro areas in the first quarter were Youngstown-Warren-Boardman, Ohio, $79,200; Cumberland, Maryland, $81,800; Decatur, Illinois, $86,100; Elmira, New York, $90,000; and Binghamton, New York, $91,200.

Metro area condominium and cooperative prices – covering changes in 61 metro areas – showed the national median existing-condo price was $218,600 in the first quarter, up 7.1 percent from the first quarter of 2016 ($204,200). Eighty-five percent of metro areas showed gains in their median condo price from a year ago.

Regional Breakdown

Total existing-home sales in the Northeast declined 2.2 percent in the first quarter but are 4.2 percent above the first quarter of 2016. The median existing single-family home price in the Northeast was $255,000 in the first quarter, up 2.2 percent from a year ago.

In the Midwest, existing-home sales dipped 4.3 percent in the first quarter but are 1.6 percent above a year ago. The median existing single-family home price in the Midwest increased 5.7 percent to $176,600 in the first quarter from the same quarter a year ago.

Existing-home sales in the South jumped 5.8 percent in the first quarter and are 5.8 percent higher than the first quarter of 2016. The median existing single-family home price in the South was $209,000 in the first quarter, 8.8 percent above a year earlier.

In the West, existing-home sales rose 1.6 percent in the first quarter and are 7.4 percent above a year ago. The median existing single-family home price in the West increased 8.4 percent to $342,500 in the first quarter from the first quarter of 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE:  NAR releases quarterly median single-family price data for approximately 175 Metropolitan Statistical Areas (MSAs). In some cases the MSA prices may not coincide with data released by state and local Realtor® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, Realtors® are advised that for business purposes, local data from their association may be more relevant.

Data tables for MSA home prices (single family and condo) are posted at http://www.realtor.org/topics/metropolitan-median-area-prices-and-affordability/data. If insufficient data is reported for a MSA in particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of Realtors®.

1 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at:  http://www.census.gov/population/estimates/metro-city/List4.txt.

Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.

Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

2 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

3 The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

4 Income figures are rounded to the nearest hundred, based on NAR modeling of Census data. Qualifying income requirements are determined using several scenarios on downpayment percentages and assume 25 percent of gross income devoted to mortgage principal and interest at a mortgage interest rate of 4.0%.

NOTE: Existing-Home Sales for April will be released May 24, and the Pending Home Sales Index for April will be released May 31; release times are 10:00 a.m. ET.

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Social Media Tools for the 2017 REALTORS® Legislative Meetings & Trade Expo

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5 Tips for Buyers in a Tight Housing Market

WASHINGTON (May 12, 2017) – When inventory is low, home prices tend to go up. Attempting to purchase a house in this type of market can make the already complex process of buying a home even more overwhelming. To help buyers successfully get through the buying process in a tight inventory market with as little stress and difficulty as possible, the National Association of Realtors® has these five suggestions and an infographic: https://www.nar.realtor/infographics/5-tips-for-buying-in-a-tight-market

1. Determine and stick to a budget. Before beginning the house hunting process, prospective homebuyers should receive preapproval from one or more lenders to verify the amount of money they are qualified to borrow. Then, after taking into account additional costs of ownership such as taxes, utilities and insurance, buyers should determine a final budget they can comfortably afford. When listings are scarce, bidding wars can drive up prices, so buyers must be prepared to walk away if the asking price surpasses their budget.

2. Identify desired neighborhoods and home wants versus needs. When housing inventory is tight, buyers may need to compromise on what they believe they want from a home. Certain wants, such as stainless appliances or hardwood floors, can be added later. However, if a buyer wants to be in a specific school district or have a decent sized backyard, those cannot be addressed later and must be taken into account during the house hunting process.

3. Be ready to make a decision quickly. In a seller’s market, homes rarely stay on the market long, so when a house that is in their budget and checks off all of their needs come along, buyers should not hesitate. Buyers should be ready to submit an offer quickly, or they may risk missing out on the home altogether.

4. Bid competitively and limit contingencies. It is tempting to submit a low offer as a starting bid, but in a seller’s market buyers need to put forward their highest offer from the very beginning or they are likely to lose out on the home. It is also important to remember that in multiple bidding situations it is not always the highest offer that is most attractive to the seller but the one with the fewest contingencies. Removing restrictions related to the sale of a current home and being flexible with things like the move-in date can make a bid stand out to a seller.                               

5. Work with a Realtor®. All real estate is local, so it is important to work with an agent who is a Realtor®, a member of the National Association of Realtors®, and who is familiar with the areas and neighborhoods the homebuyers are considering. Realtors® are the most trusted resource for real estate information and have unparalleled knowledge of their communities; they can give buyers the competitive advantage needed in a tight market.  

For more information on buying a home in a seller’s market, visit NAR’s comprehensive website for homeowners, www.houselogic.com/buy

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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See and share an infographic containing the tips in this news release.

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Real Estate and the Economy

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First-time Home Buyer Savings Accounts

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NAR Comments on Appraiser Qualifications

By Sehar Siddiqi, Joe Harris

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Survey Reports 12 Percent Jump in REALTOR® Business Activity

WASHINGTON (May 11, 2017) — After a slip in business in 2015, the National Association of Realtors® Member Profile found that the income and sales volume of Realtor® members increased in 2016. The median gross income of Realtors® increased 8 percent in 2016 as the typical member had the highest number of transactions in recent years.

Despite Realtors® continuing to cite inventory shortages, transactions grew to 12 per agent, the highest since 2014 when the typical agent had 11. The median sales volume for Realtors® also grew from $1.8 million in 2015 to $1.9 million in 2016. Median income increased too, from $39,200 in 2015 to $42,500 in 2016; the median gross income of Realtor® households also increased from $98,300 in 2015 to $111,400 last year.

The Member Profile is representative of the nation’s 1.2 million Realtors®; members of NAR account for more than half of the approximately 2.2 million active real estate licensees in the U.S. Realtors® go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and Standards of Practice and committing to continuing education.

Lawrence Yun, NAR chief economist, says business activity for Realtors® grew last year because of higher demand, even amid a rise in membership. “The return of pre-recession market levels and rising home sales and prices have led to increased business activity among Realtors® and an increase in Realtor® membership. It is a highly entrepreneurial business, with some members earning six-figure incomes while others were barely scratching out less than $10,000,” Yun said.

Income and Expenses of Realtors®

The latest survey revealed that 24 percent of members make under $10,000, and 24 percent make above $100,000. It is not surprising that median gross income and the number of transactions generally increase with experience; last year, Realtors® in business for more than 16 years earned a median income of $78,850 (up from

$73,400 in 2015) and had 15 transactions, the same number as 2015. Realtors® with 2 years or less experience had a median gross income of $8,930, an increase from $7,400 in 2015, and had 4 transactions.

Income also varied by license type, as members licensed as brokers earned $69,640 in 2016, while the median earnings for sales agents was $31,670.

Demographic Characteristics of Realtors®

In the past year, there was a continued rise in new members, from 1.16 million Realtors® in March 2016 to 1.22 million in March 2017. The typical member has 10 years of real estate experience (unchanged from a year ago).

Younger members continue to enter the industry, as this year’s survey found that 28 percent have less than two years of experience, an increase from 17 percent in 2015. Members with less than one year of experience made up 20 percent of membership, an almost 10-percentage point increase from 2015. Broker-owners, managers, and appraisers had the most experience, while sales agents were typically the newest to the field with six years of experience.

“It has become evident over the last few years that individuals are realizing the many benefits and business opportunities that working in real estate provides. The increase in business Realtors® are experiencing reflects the continued value they bring to their clients and communities across the country,” said NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties.

Despite more younger members joining the association last year, the median age of Realtors® remained at 53 again last year; the lowest median age was in 2008 at 52 years. “The leveling in age may be attributed both to older members retiring and to more new, younger entrants to the business,” Brown said.

This year, only 30 percent of members are over 60 years old, and 4 percent are less than 30 years old, which is consistent with last year. Twelve percent of members who have two years or less of experience are under 30 years of age.

The typical Realtor® is a 53-year-old female who attended college and is a homeowner; women represent 63 percent of Realtors®, accounting for 58 percent of brokers and 67 percent of sales agents.

Sixty-five percent of members are licensed as sales agents; 22 percent are brokers, and 15 percent are broker associates (some hold more than one license). Thirteen percent of members have one personal assistant, while 3 percent have two or more personal assistants.

Business Activity of Realtors®

According to the survey, there are multiple factors that limit potential clients in completing transactions.  The top reason cited by Realtors® was difficulty finding the right property (36 percent), housing affordability (16 percent), and difficulty in obtaining mortgage financing (14 percent).

 “Limited inventory and rising prices were large factors affecting the real estate market across the country over the last year, so it is no surprise that these same market conditions were cited in the survey as having the largest impact on Realtors®’ ability to help their client complete a transaction.” said Yun.

Repeat business and referrals continue to be important sources of income for Realtors®, especially those with more experience. Realtors® with 16 or more years of experience reported 61 percent of business was from repeat customers or referrals.            

Office and Firm Affiliation of Realtors®

Over half of Realtors® report that they work for an independent company. Fifty-six percent of those are licensed as brokers and broker associates, down 4 percent since 2015, and 48 percent are licensed as sales agents, also down 4 percent since 2015. Nearly nine in 10 members are independent contractors at their firms.

The 2017 National Association of Realtors® Member Profile is based on a survey of 165,424 members, which generated 12,685 usable responses, representing an adjusted response rate of 7.7 percent. Information about compensation, earnings, sales volume and number of transactions is characteristics of calendar year 2016, while all other data are representative of member characteristics in early 2017.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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NAR Directory of Select Federal Departments and Independent Agencies

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Monday Minute

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Tax Plan Could Hurt Homeowners

The tax plan released by the Trump Administration earlier this week puts the real estate industry at the center of the debate over how to make the country’s tax code simpler, fairer, and better at generating economic growth in the United States. For that reason, it’s important for real estate professionals to dig below the surface to see how the plan could change the tax picture for most homeowners.

The plan calls for reducing the number of tax brackets for individuals, lowering the rates on the remaining brackets, and doubling the standard deduction while eliminating all itemized deductions except those for mortgage interest and charitable contributions.

On the surface, doubling the standard deduction and retaining MID might seem to put more money into the pockets of many middle-income households without compromising the federal government’s historic commitment to home ownership. And in fact it would for some households.

But for most middle-class households who own homes, the new standard deduction won’t be high enough to offset what they would lose on the itemization side. Yes, they would retain the option of taking the deductions for mortgage interest and charitable contributions, but unless these amounts totaled more than the standard deduction, it would not make sense to claim them. Also, they would lose the deductions for real estate taxes, mortgage insurance premiums, state and local taxes, as well as others, such as the medical expense deduction. There are also changes to the treatment of personal and dependent exemptions that will change one’s tax calculation. The net effect on many or even most homeowners would be a loss. In some cases, a big loss.

Take a single female who’s earning $65,000 a year and paying $1,000 a month in rent in Colorado. She decides to make a little higher monthly payment to become a homeowner. She puts 5 percent down on a $265,000 condo, which increases her monthly housing costs to $1,193 (principal and interest). That’s a common scenario for a first-time buyer like her, because while her costs go up, she now has a home of her own and the chance to build equity over time.

But under today’s tax code, her monthly costs actually go down, according to an NAR analysis, because when she claims all of the itemized deductions available to her as a home owner, she ends up with a net tax benefit of over $3,300, or roughly $275 a month, compared to what she would get by taking the standard deduction. When that $275 a month is factored into her monthly housing costs, she’s paying significantly less than she was as a renter.

Under the Administration’s tax plan, that advantage goes away almost entirely because she can only deduct her mortgage interest and charitable contributions Without the option to deduct real estate taxes, state and local taxes, and mortgage insurance premiums, her net tax advantage over taking the standard deduction falls to a little more than $150. Although that’s still a net gain, it’s just a shadow of her current benefits and not nearly enough to bring her monthly housing costs down to what she was paying when renting.

Clearly, the tax picture will differ depending on your situation. For households in higher-tax states, the benefit of itemizing is higher. And for second-home owners, the net tax benefit of itemizing can be substantial. On balance, though, according to different scenarios NAR has run, homeowners are going to come out the losers under the Administration’s tax plan.

Tax experts estimate that 95 percent of homeowners today would find it makes more sense to take the standard deduction rather than itemize under the Administration’s plan. That should be an alarming statistic to real estate professionals, because it means millions of homeowners would be paying more in taxes than they pay today. The tax plan does not preserve homeownership by preserving MID; it devastates homeownership, and it does it in three ways:

1. Removes or largely reduces the tax incentive of owning a home instead of renting one for most people.

2. Discriminatorily raises taxes on homeowners more than on renters.

3. Causes a drop in the value of homes by more than 10 percent.

Separate from the  changes the tax plan would make to household’s homeownership calculation are other changes that could affect real estate professionals. These include the proposal to reduce the corporate tax rate from 35 percent to 15 percent and to extend that rate reduction to small businesses and pass-through entities.

NAR Senior Tax Policy Representative Evan Liddiard walks through different scenarios on how the tax plan affects households in a recorded webinar. It’s a good way to dig below the surface to see how the proposed changes could affect real estate. Before taking a stand one way or the other on the tax plan, you’re encouraged to get a sense of how it could affect home owners by watching the presentation.

Watch the recorded webinar.

Access the slides used in the webinar.

Also, Liddiard and NAR Deputy Chief Lobbyist Jamie Gregory walk through NAR’s concerns in a video with Jon Boughtin of NAR Media:

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at rfreedman@realtors.org.

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