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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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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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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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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.

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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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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.

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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 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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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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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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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/hSBF_hfRCf4/regulations-retention-and-recruitment-pressing-issues-for-appraisal-industry

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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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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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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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/VgAoV6RyWco/survey-reports-12-percent-jump-in-realtor-business-activity

Realtors® Support Pam Patenaude Nomination for HUD Deputy Secretary

AE | Store | Directories

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Pending Home Sales Dip 0.8% in March

WASHINGTON (April 27, 2017) — Pending home sales in March maintained their recent high level, but momentum slackened slightly in most of the country as dearth supply weighed on activity, according to the National Association of Realtors®. Only the South saw an uptick 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, declined 0.8 percent to 111.4 in March from 112.3 in February. Despite last month’s decrease, the index is 0.8 percent above a year ago.

Lawrence Yun, NAR chief economist, says sparse inventory levels caused a pullback in pending sales in March, but activity was still strong enough to be the third best in the past year. “Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” he said. “In most areas, the lower the price of a home for sale, the more competition there is for it. That’s the reason why first-time buyers have yet to make up a larger share of the market this year, despite there being more sales overall.”

Pointing to revealing data from the March Realtors® Confidence Index, Yun worries that the painfully low supply levels this spring could heighten price growth — at 6.8 percent last month — even more in the months ahead. Homes in March came off the market at a near-record pace 1, and indicating an increase in the likelihood of listings receiving multiple offers, 42 percent of homes sold at or above list price (the second highest amount since NAR began tracking in December 2012).

“Sellers are in the driver’s seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers,” said Yun. “Buyers are showing resiliency given the challenging conditions. However, at some point — and the sooner the better — price growth must ease to a healthier rate. Otherwise sales could slow if affordability conditions worsen.”

Yun forecasts for 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 2.9 percent to 99.1 in March, but is still 1.8 percent above a year ago. In the Midwest the index declined 1.2 percent to 109.6 in March, and is now 2.4 percent lower than March 2016.

Pending home sales in the South rose 1.2 percent to an index of 129.4 in March and are now 3.9 percent above last March. The index in the West fell 2.9 percent in March to 94.5, and is now 2.7 percent below a year ago.  

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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1 Properties typically stayed on the market for 34 days in March, which is down from 47 days a year ago and is the second lowest since NAR began tracking in May 2011. The lowest was May 2016 at 32 days.

* 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: NAR’s metropolitan area home price report for the first quarter will be released May 15, Existing-Home Sales for April will be reported May 24, and the next Pending Home Sales Index will be May 31; all release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/2tIvhHked-s/pending-home-sale-dip-08-in-march

Homeownership in the Crosshairs of Latest Tax Plan, Say Realtors®

WASHINGTON (April 26, 2017) – Major reforms are needed to lower tax rates and simplify the tax code, but that shouldn’t come at the expense of current and prospective homeowners. That’s according to National Association of Realtors® President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties.

Brown said that while the President’s tax proposal released today is well-intentioned, it’s a non-starter for homeowners and real estate professionals who see the benefits of housing and real estate investment at work every day.  By doubling the standard deduction and repealing the state and local tax deduction, the plan would effectively nullify the current tax benefits of owning a home for the vast majority of tax filers. In light of the plan’s release, Brown issued the following statement:

“For over a century, America has committed itself to homeownership with targeted tax incentives that help lower- and middle-class families purchase what is likely their largest asset. No surprise, real estate now accounts for over 19 percent of America’s gross domestic product, or more than $3 trillion in investment.

“But for roughly 75 million homeowners across the country, their home is more than just a number. It represents their ambitions, their nest egg, and the place where memories are made with family and friends. 

“Targeted tax incentives are in place to help people get there. The mortgage interest deduction and the state and local tax deduction make homeownership more affordable, while 1031 like-kind exchanges help investors keep inventory on the market and money flowing to local communities.

“Those tax incentives are at risk in the tax plan released today. Current homeowners could very well see their home’s value plummet and their equity evaporate if tax reform nullifies or eliminates the tax incentives they depend upon, while prospective homebuyers will see that dream pushed further out of reach. As it stands, homeowners already pay between 80 and 90 percent of U.S. federal income tax. Without tax incentives for homeownership, those numbers could rise even further. And while we appreciate the Administration’s stated commitment to protecting homeownership, this plan does anything but.”

“Homeowners put their hard-earned money on the line to make an investment in themselves and their communities, and it’s on them to protect that investment. Common sense says owning a home isn’t the same as renting one, and American’s tax code shouldn’t treat those activities the same either.

“Realtors® support tax reform, and it’s encouraging to see leaders in Washington doing their part to get there. We believe tax rates should come down to the degree that sound fiscal policy allows, and simplifying the tax code will help ensure fairness and transparency for individual taxpayers. It’s a goal we share with the authors of this tax plan, but getting there by eliminating the incentives for homeownership is the wrong approach. We look forward to working with leaders in Congress and the administration to reform the tax code, while preserving America’s long-held commitment to homeownership.”

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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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/xPWOJwGhGp8/homeownership-in-the-crosshairs-of-latest-tax-plan-say-realtors

Pending Home Sale Dip 0.8% in March

WASHINGTON (April 27, 2017) — Pending home sales in March maintained their recent high level, but momentum slackened slightly in most of the country as dearth supply weighed on activity, according to the National Association of Realtors®. Only the South saw an uptick 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, declined 0.8 percent to 111.4 in March from 112.3 in February. Despite last month’s decrease, the index is 0.8 percent above a year ago.

Lawrence Yun, NAR chief economist, says sparse inventory levels caused a pullback in pending sales in March, but activity was still strong enough to be the third best in the past year. “Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” he said. “In most areas, the lower the price of a home for sale, the more competition there is for it. That’s the reason why first-time buyers have yet to make up a larger share of the market this year, despite there being more sales overall.”

Pointing to revealing data from the March Realtors® Confidence Index, Yun worries that the painfully low supply levels this spring could heighten price growth — at 6.8 percent last month — even more in the months ahead. Homes in March came off the market at a near-record pace 1, and indicating an increase in the likelihood of listings receiving multiple offers, 42 percent of homes sold at or above list price (the second highest amount since NAR began tracking in December 2012).

“Sellers are in the driver’s seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers,” said Yun. “Buyers are showing resiliency given the challenging conditions. However, at some point — and the sooner the better — price growth must ease to a healthier rate. Otherwise sales could slow if affordability conditions worsen.”

Yun forecasts for 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 2.9 percent to 99.1 in March, but is still 1.8 percent above a year ago. In the Midwest the index declined 1.2 percent to 109.6 in March, and is now 2.4 percent lower than March 2016.

Pending home sales in the South rose 1.2 percent to an index of 129.4 in March and are now 3.9 percent above last March. The index in the West fell 2.9 percent in March to 94.5, and is now 2.7 percent below a year ago.  

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 Properties typically stayed on the market for 34 days in March, which is down from 47 days a year ago and is the second lowest since NAR began tracking in May 2011. The lowest was May 2016 at 32 days.

* 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: NAR’s metropolitan area home price report for the first quarter will be released May 15, Existing-Home Sales for April will be reported May 24, and the next Pending Home Sales Index will be May 31; all release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/2tIvhHked-s/pending-home-sale-dip-08-in-march

Second Century Ventures Announces 2017 REach® Accelerator Class

CHICAGO (April 20, 2017) – The National Association of Realtors®’ strategic investment arm, Second Century Ventures, unveiled seven organizations chosen for the 2017 class of REach®, a growth technology accelerator program helping launch companies into the real estate, financial services, banking, home services and insurance industries. The program is focused on providing early-to mid-stage companies with access to NAR’s industry expertise, influence and key relationships as companies are launched into the trillion dollar real estate space.

“As technology continues to transform real estate, NAR is leading the charge through its innovative Second Century Ventures,” said Dale Stinton, president of SCV and NAR CEO. “SCV is unique in its ability to leverage NAR’s industry connections and insights, which position REach® companies for ultimate success. This year’s class has tremendous potential to benefit Realtors® and the clients they serve, well into the future.”

The REach® program differs from other accelerators in both its vertical focus within real estate and related industries and in the growth stage at which most companies enter the program. The seven companies range from seed stage to well-capitalized startups backed by world-renowned investors; in aggregate, the class has raised over $50M in previous financings and total valuation exceeds $350M. The REach® program aims to move these organizations rapidly forward beyond their initial successes through education, mentorship and market exposure.

The companies chosen for the 2017 class:

  • Centriq: The app helps solve the problem of transferring home organization, repair and maintenance knowledge from the seller to the buyer while keeping real estate professionals connected to their clients long after the transaction is over.
  • HouseCanary: The most complete and accurate source of residential valuations and analytics for every block and property in the U.S., and is used by agents to become differentiated, trusted advisors to their clients.
  • Notarize: A leading remote electronic notary service, which allows anyone to legally notarize a document from their mobile device or desktop 24-hours per day, seven days per week.
  • Occly: A portable 2-in-1 alarm solution that keeps real estate professionals safe and properties secure.
  • Pearl Certification: Certifies homes with features that contribute to its comfort, energy performance, indoor air quality and value.
  • Relola: Unlocks real estate professionals’ insider knowledge with tools that digitize, amplify and market their everyday tasks. 
  • Trusted Mail: Protects against wire fraud and email spoofing using facial-biometrics to sign and encrypt email and attachments.

“The future of our industry increasingly depends on fast, seamless adoption of technology that benefits home buyers, sellers and investors at every step of a real estate transaction, from prospecting to closing. These companies are seizing an opportunity for rapid growth within the real estate, finance and home services industries via REach®, which will ultimately help them expand into other vertical marketplaces,” said Mark Birschbach, managing director of Second Century Ventures and REach®.

Hundreds of companies applied to REach® this year, up significantly from the number of applicants in 2016. Those chosen proved to have solid business models, executable business plans and significant potential to impact the real estate space and beyond. The seven organizations can expect significant results, as past classes have doubled, on average, their customer base and collectively raised over $60 million in financing both during and after completing the program.

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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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/_MKJLwp7zuc/second-century-ventures-announces-2017-reach-accelerator-class

Existing-Home Sales Jumped 4.4% in March

WASHINGTON (April 21, 2017) — Existing-home sales took off in March to their highest pace in over 10 years, and severe supply shortages resulted in the typical home coming off the market significantly faster than in February and a year ago, according to the National Association of Realtors®. Only the West saw a decline in sales activity in March. 

Total existing-home sales 1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, ascended 4.4 percent to a seasonally adjusted annual rate of 5.71 million in March from a downwardly revised 5.47 million in February. March’s sales pace is 5.9 percent above a year ago and surpasses January as the strongest month of sales since February 2007 (5.79 million).

Lawrence Yun, NAR chief economist, says existing sales roared back in March and were led by hefty gains in the Northeast and Midwest. “The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” he said. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”

The median existing-home price 2 for all housing types in March was $236,400, up 6.8 percent from March 2016 ($221,400). March’s price increase marks the 61st consecutive month of year-over-year gains.

Total housing inventory 3 at the end of March increased 5.8 percent to 1.83 million existing homes available for sale, but is still 6.6 percent lower than a year ago (1.96 million) and has fallen year-over-year for 22 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (unchanged from February).

Added Yun, “Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year.”

Properties typically stayed on the market for 34 days in March, which is down significantly from 45 days in February and 47 days a year ago. Short sales were on the market the longest at a median of 90 days in March, while foreclosures sold in 52 days and non-distressed homes took 32 days (shortest since NAR began tracking in May 2011). Forty-eight percent of homes sold in March were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in March were San Jose-Sunnyvale-Santa Clara, Calif., 24 days; San Francisco-Oakland-Hayward, Calif., 25 days; Seattle-Tacoma-Bellevue, Wash., and Denver-Aurora-Lakewood, Colo., both at 28 days; and Vallejo-Fairfield, Calif., 31 days.  

“Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes,” said Yun. “A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose for the fifth straight month in March to 4.20 percent from 4.17 percent in February. The average commitment rate for all of 2016 was 3.65 percent.

First-time buyers were 32 percent of sales in March, which is unchanged from February and up from 30 percent a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 2016 4 – revealed that the annual share of first-time buyers was 35 percent.

NAR President William E. Brown, a Realtor® from Alamo, California, says patience is a virtue for prospective first-time buyers this spring. “Realtors® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range,” he said. “The best advice is to lean on the guidance of a Realtor® throughout the home search and be careful about stretching the budget too far. Don’t get frustrated by losing out on a home and know the right one will eventually come along in due time.” 

All-cash sales were 23 percent of transactions in March, down from 27 percent in February and 25 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in March, down from 17 percent in February but up from 14 percent a year ago. Sixty-three percent of investors paid in cash in March.

Distressed sales 5 – foreclosures and short sales – were 6 percent of sales in March, down from 7 percent in February and 8 percent a year ago. Five percent of March sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in March (18 percent in February), while short sales were discounted 14 percent (17 percent in February).

Single-family and Condo/Co-op Sales

Single-family home sales climbed 4.3 percent to a seasonally adjusted annual rate of 5.08 million in March from 4.87 million in February, and are now 6.1 percent above the 4.79 million pace a year ago. The median existing single-family home price was $237,800 in March, up 6.6 percent from March 2016.

Existing condominium and co-op sales increased 5.0 percent to a seasonally adjusted annual rate of 630,000 units in March, and are now 5.0 percent higher than a year ago. The median existing condo price was $224,700 in March, which is 8.0 percent above a year ago.

March existing-home sales in the Northeast surged 10.1 percent to an annual rate of 760,000, and are now 4.1 percent above a year ago. The median price in the Northeast was $260,800, which is 2.8 percent above March 2016.

In the Midwest, existing-home sales jumped 9.2 percent to an annual rate of 1.31 million in March, and are now 3.1 percent above a year ago. The median price in the Midwest was $183,000, up 6.2 percent from a year ago.

Existing-home sales in the South in March rose 3.4 percent to an annual rate of 2.42 million, and are now 8.5 percent above March 2016. The median price in the South was $210,600, up 8.6 percent from a year ago.

Existing-home sales in the West decreased 1.6 percent to an annual rate of 1.22 million in March, but are still 5.2 percent above a year ago. The median price in the West was $347,500, up 8.0 percent from March 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.

1 Existing-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.

2 The 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.

3 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).

4 Survey 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.

5 Distressed 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 March is scheduled for release on April 27, and Existing-Home Sales for April will be released May 24; release times are 10:00 a.m. ET.

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Personal Safety Company Guard Llama Scores Deal on ABC's "Shark Tank"

WASHINGTON (April 17, 2017) – With an offer of $100,000 from investor Barbara Corcoran, 2015 REach real estate technology accelerator participant and personal safety device company, Guard Llama, is officially a part of “Shark Tank” television history.

Guard Llama offers a mobile personal security system that expedites the 9-1-1 dispatching process when dialing 9-1-1 is not possible. This technology caught the attention of the National Association of Realtors®’ strategic investment arm, Second Century Ventures, which announced in 2015 that Guard Llama had been added to its growth technology accelerator program known as REach.

NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties, congratulated the company on making their case before the Shark Tank panelists. “The Guard Llama team should be proud of their accomplishment,” he said. “Pitching a product is no small task, especially in front of well-known business leaders on national television, but the Guard Llama team did fantastic.”

NAR is committed to the safety and well-being of its members, and established the REALTOR® Safety Program to empower and inform members of the potential risks they face in this profession as well as how to navigate them safely. According to NAR’s 2016 Member Safety Report, while 95 percent of Realtors® have never been the victim of crime, 39 percent have found themselves in situations where they have feared for their safety or the safety of their personal information. Smart phone apps and devices are among the popular safety tools for real estate agents.

Guard Llama CEO Joe Parisi said that while the “Shark Tank” experience was intense, the event marked a real opportunity for his company.

“Anytime someone recognizes the value in your product and says they want to put an investment behind it, that’s a good day,” he said. “Having a celebrity businessperson do it on a national stage like “Shark Tank” is just extraordinary. This represented a chance to showcase what Guard Llama is doing to help make the world safer, and we’re looking forward to the good work we have ahead of us.”

Additional information on Guard Llama’s products and services is available on their website, guardllama.com/how-it-works/.  

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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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/-J_RE-2Rmr8/personal-safety-company-guard-llama-scores-deal-on-abcs-shark-tank

Affordability, Tight Supply Cause Vacation Home Sales to Plummet in 2016; Investment Sales Climb 4.5%

WASHINGTON (April 11, 2017) — Last year’s strongest pace of home sales in a decade included a sizeable drop in activity from vacation buyers and a jump from individual investors, according to an annual second-home survey released today by the National Association of Realtors®. The survey additionally found that vacation and investment buyers in 2016 were more likely to take out a mortgage and use their property as a short-term rental.

NAR’s 2017 Investment and Vacation Home Buyers Survey 1, covering existing- and new-home transactions in 2016, revealed that vacation home purchases last year descended to an estimated 721,000, down 21.6 percent from 2015 (920,000) and the lowest since 2013 (717,000).

Investment-home sales in 2016 rose 4.5 percent to 1.14 million from 1.09 million in 2015. Owner-occupied purchases jumped 12.5 percent to 4.21 million last year from 3.74 million in 2015 – the highest level since 2006 (4.82 million).

Lawrence Yun, NAR chief economist, says vacation sales in 2016 tumbled for the second consecutive year and have fallen 36 percent from their recent peak high in 2014 (1.13 million). “In several markets in the South and West – the two most popular destinations for vacation buyers – home prices have soared in recent years because substantial buyer demand from strong job growth continues to outstrip the supply of homes for sale,” he said. “With fewer bargain-priced properties to choose from and a growing number of traditional buyers, finding a home for vacation purposes became more difficult and less affordable last year.”

Added Yun, “The volatility seen in the financial markets in late 2015 through the early part of last year also put a dent in sales as some affluent households with money in stocks likely refrained from buying or delayed plans until after the election.”

Tight inventory conditions pushed the median sales price of both vacation and investment homes last year to levels not seen in roughly a decade. The median vacation home price was $200,000, up 4.2 percent from 2015 ($192,000) and the highest since 2006 (also $200,000). The median investment-home sales price was $155,000, up 8.0 percent from 2015 ($143,500) and the highest since 2005 ($183,500).

With home prices steadily rising, an increasing share of second-home buyers financed their purchase last year. The share of vacation buyers who paid fully in cash diminished to 28 percent (38 percent in 2015), while cash purchases by investors decreased to 35 percent from 39 percent in 2015 and 41 percent in 2014.

“Sales to individual investors reached their highest level since 2012 (1.20 million) as investors took advantage of record low mortgage rates and recognized the sizeable demand for renting in their market as renters struggle to become homeowners,” said Yun. “The ability to generate rental income or remodel a home to put back on a market with tight inventory is giving investors increased confidence in their ability to see strong returns in their home purchase.”

Vacation sales accounted for 12 percent of all transactions in 2016, which was the lowest share since 2012 (11 percent) and down from 16 percent in 2015. The portion of investment sales remained unchanged for the third consecutive year at 19 percent, and owner-occupied purchases increased to 70 percent (65 percent in 2015).

Greater interest in short-term rentals; South most popular destination

Given the rising popularity of short-term rentals in locales throughout the country, it’s no surprise there were slightly more investment and vacation buyers renting their property for less than 30 days. Forty-four percent of investors (42 percent in 2015) and 29 percent of vacation buyers (24 percent in 2015) did or tried to rent their property last year and plan to do so in 2017. Twenty-one percent of investment buyers and 15 percent of vacation buyers did not rent their home for short-term purposes last year but plan to try it in 2017.

Vacation buyers’ typically earned $89,900 ($103,700 in 2015), while investment buyers had a household income of $82,000 ($95,800 in 2015). Both were most likely to purchase a single-family home in the South, with vacation buyers preferring a beach location and investors choosing a suburban area.

The top two reasons for buying a vacation home were to use for vacations or as a family retreat (42 percent) and for future retirement (18 percent), while investors mostly bought to generate income through renting (42 percent) and for potential price appreciation (16 percent).

NAR’s 2017 Investment and Vacation Home Buyers Survey, conducted in March 2017, surveyed a sample of households that had purchased any type of residential real estate during 2016. The survey sample was drawn from an online panel of U.S. adults monitored and maintained by an established survey research firm. A total of 2,099 qualified adults responded to the survey.

The 2017 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500, or online at www.nar.realtor/prodser.nsf/Research. The report is free to NAR members and accredited media and costs $149.95 for non-members.

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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1  Vacation homes are recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes. Sales data excludes institutional investment activity.

Home sales were calculated based on a proportion of buyers who bought each respective home type—vacation, investment, and primary residence. The number of purchases for each housing type were calculated using the total number of existing home sales and new homes in 2016. To calculate the difference in the number of purchases in 2015 to 2016, the percent change of each housing type purchased was calculated.

Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/t8TOuWT0sx0/affordability-tight-supply-cause-vacation-home-sales-to-plummet-in-2016-investment-sales-climb-45

Majority of Realtors® Say Clients Interested in Sustainability

WASHINGTON (April 6, 2017) — Growing consumer interest and demand for greener, more sustainable properties is driving a dialogue between Realtors® and homebuyers and sellers. Over half of Realtors® find that consumers have interest in real estate sustainability issues and practices, according to the National Association of Realtors®’ recent REALTORS® and Sustainability report.

The report, stemming from NAR’s new Sustainability Program, surveyed Realtors® about sustainability issues facing consumers in the real estate market and ways Realtors® are setting their own goals to reduce energy usage.

“As consumers’ interest in sustainability grows, Realtors® understand the necessity of promoting sustainability in their real estate practice, such as marketing energy efficiency in property listings to homebuyers,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “The goal of the NAR Sustainability Program is to provide leadership and strategies on topics of sustainability to benefit members, consumers and communities.”

To meet growing consumer interest, more Multiple Listing Services are incorporating data entry fields to identify a property’s green features; 43 percent of respondents report their MLS has green data fields, and only 19 percent do not. Realtors® see great value in promoting energy efficiency in listings with seven out of 10 feeling strongly about the benefits in promoting those features to clients.  

The survey asked respondents about renewable energy and its impact on the real estate market. A majority of agents and brokers (80 percent) said that solar panels are available in their market; forty-two percent said solar panels increased the perceived property value.

Twenty-four percent of brokers said that tiny homes were available in their market, compared to 61 percent that reported tiny homes were not yet available. When asked about involvement with clients and green properties, 27 percent of agents and brokers were involved with 1 to 5 properties that had green features in the last 12 months. Seventy percent of members worked with no properties that had green features, leaving a great deal of room for future growth.

The home features that Realtors® said clients consider as very or somewhat important include a home’s efficient use of lighting (50 percent), a smart/connected home (40 percent), green community features such as bike lanes and green spaces (37 percent), landscaping for water conservation (32 percent), and renewable energy systems such as solar and geothermal (23 percent).                                    

When it comes to the sustainable neighborhood features for which clients are looking, 60 percent of Realtors® listed parks and outdoor recreation, 37 percent listed access to local food and nine percent listed recycling.

The transportation and commuting features of a community that Realtors® listed as very or somewhat important to their clients included walkability (51 percent), public transportation (31 percent) and bike lanes/paths (39 percent).

NAR initiated the Sustainability Program as a platform for dialogue on sustainability for Realtors®, brokers, allied trade associations, and consumers. The program’s efforts focus on coordination and articulation of NAR’s existing sustainability resources, while also supporting a growing area of interest for consumers, helping members to assist home buyers and sellers.

To further position NAR as a leader in real estate sustainability topics with consumers, Realtors®, brokers and allied trade associations, the REALTOR® Sustainability Program surveyed Realtors® pertaining to sustainability issues facing consumers and the industry. NAR plans to use this report to better benchmark Realtor® understanding of sustainability.

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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VA Home Loan Program Marked by Strong Underwriting, but Appraisers Raise Concerns

WASHINGTON (April 4, 2017) – Challenges facing real estate appraisers servicing the Veterans Affairs were under Congress’s microscope this week as the National Association of Realtors® and other industry leaders took to Capitol Hill to hail the continued success of the VA Home Loan Guaranty Program.

Michelle Bradley, a state-certified general real property appraiser from Pennsylvania and Immediate Past Chair of NAR’s Real Property Valuation Committee, testified before the House Veterans Affairs Committee Subcommittee on Economic Opportunity. Bradley told Members of the Committee that while good appraisals are key to maintaining a strong VA Home Loan Guarantee Program, regulatory burdens are getting in the way.

“America’s veterans have been well-served for years by VA’s appraisal system, and professionals in the business should be proud of their good work,” Bradley said. “Unfortunately, that system is under tremendous pressure today.”

The VA Home Loan Guaranty Program has served veterans and active duty service members for over 70 years by encouraging private lenders to offer favorable terms on home loans and allowing buyers to utilize a zero-down payment option.

According to NAR’s 2016 Veterans and Active Military Home Buyers and Sellers Profile, 18 percent of all recent homebuyers were veterans. Among those buyers, over half used a VA loan to finance their home purchase.

A professional appraisal is key to giving everyone involved in the transaction a clear understanding of the purchase and ensuring that buyers ultimately pay a fair price for their home. Citing NAR’s recent Appraiser Trends Survey, however, Bradley pointed out a number of impediments to continuing the current level of service.

“What we’ve found is that, among appraisers, there’s a real reluctance to work with the VA,” Bradley said. “Generally, appraisers are dissatisfied with the level of compensation they’re receiving for their work. It’s also harder than ever for trainees to enter the field, not just within the VA system but across the industry, which only adds to the perception of an appraiser shortage. This overall regulatory burden is a significant issue, and we have to turn things around.”

Bradley sounded a positive note on an element of the VA system known as the “Reconsideration of Value.” When a VA appraiser finds that the market value of a property is lower than the sale price, the VA’s process calls for them to stop work and notify the lender’s point of contact. Also known as the “Tidewater Initiative,” Bradley said that this operating procedure is unique to VA transactions and designed to protect the buyer.

She noted, however, that the process often isn’t transparent to the buyer or their agent. To improve the program, Bradley reminded the committee that a clear understanding between appraisers, real estate agents and the agents’ clients is not only allowable, but should in fact should be encouraged.

Despite the challenges facing the industry, Bradley sounded an optimistic tone about the road ahead.

“What we have today isn’t perfect, but it’s an important part of ensuring veterans and active-service members are protected when using a VA home loan,” Bradley said. “NAR looks forward to working with the VA and Members of Congress to improve this system in the years to come.”

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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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/TBMKpfH65oU/va-home-loan-program-marked-by-strong-underwriting-but-appraisers-raise-concerns

Pending Home Sales Leap 5.5% in February

WASHINGTON (March 29, 2017) — Pending home sales rebounded sharply in February to their highest level in nearly a year and second-highest level in over a decade, according to the National Association of Realtors®. All major regions saw a notable hike in contract activity last month.

The Pending Home Sales Index,* www.nar.realtor/topics/pending-home-sales, a forward-looking indicator based on contract signings, jumped 5.5 percent to 112.3 in February from 106.4 in January. Last month’s index reading is 2.6 percent above a year ago, is the highest since last April (113.6) and the second highest since May 2006 (112.5).

Lawrence Yun, NAR chief economist, says February’s convincing bump in pending sales is proof that demand is rising with spring on the doorstep. “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country,” he said. “The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”

Added Yun, “Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.”  

Looking ahead to the busy spring months, Yun expects to see continued ebbs and flows in activity as new supply struggles to replace listings that are going under contract at a very quick pace. This is especially the case at the lower- and mid-market price ranges, where choices are minimal and prices are being bid higher by multiple offers.

“The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy,” said Yun. “The country’s healthy labor market is translating to greater job security, but affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation’s low homeownership rate.”   

Existing-home sales are forecast to be around 5.57 million this year, an increase of 2.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast rose 3.4 percent to 102.1 in February, and is now 6.6 percent above a year ago. In the Midwest the index jumped 11.4 percent to 110.8 in February, but is still 0.6 percent lower than February 2016.

Pending home sales in the South climbed 4.3 percent to an index of 127.8 in February and are now 4.2 percent above last February. The index in the West increased 3.1 percent in February to 97.5, but is still 0.2 percent higher than a year ago.

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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* 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 March will be reported April 21, and the next Pending Home Sales Index will be April 27; all release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/mdwixIP8EjM/pending-home-sales-leap-55-in-february

6 REALTOR® Associations Honored for Community Outreach

WASHINGTON (March 28, 2017) – The National Association of Realtors® has honored six Realtor® associations across the country with Community Outreach Awards. These awards recognize associations that have worked within their communities to make them a better place to live and do business.

“Realtors® are community leaders and are dedicated to building successful neighborhoods and advocating on behalf of homeowners,” said NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties, a division of his family real estate business. “I am proud to recognize the associations that are receiving NAR’s Community Outreach Award; through their work, these associations exemplify the core values of Realtors® to improve their neighborhoods and communities.”

This is the second time NAR has honored Realtor® associations with Community Outreach Awards. To be considered for the award, associations must have made use of Realtor® Party Community Outreach resources over a two-year period to address a challenge facing their community, developed partnerships with community stakeholders, or involved the public in a project or discussion to improve the community. The award recipients were announced and recognized last week at NAR’s 2017 Association Executives Institute in Denver.

The 2017 recipients of NAR’s Community Outreach Award are:

Cape Fear Realtors®, North Carolina: The association made use of two NAR Land Use Initiatives to defeat a proposed vacation rental ordinance in Kure Beach and to work with elected officials to modify a zoning change for group homes in New Hanover County. The association also received two NAR Placemaking Grants to build community gardens – and incorporated both activities into a Realtor® volunteer action day – and an NAR Smart Growth grant to hold a seminar for 165 people on water issues and bring together several community groups to discuss the topic.

Greater Rochester Association of Realtors®, New York: The association, working closely with the city and other local organizations, utilized an NAR Housing Opportunity grant to hold a very successful housing fair called “Celebrate City Living,” which attracted 500 people. The association also used four NAR Smart Growth grants to sponsor a lecture series on equity in planning and hold a symposium for community design professionals on planning and transportation.

Austin Board of Realtors®, Texas: With an NAR diversity grant the board held a two-day conference surrounding the National Association of Real Estate Brokers’ State of Housing in Black America report; the local NAREB chapter and leaders from the local Hispanic and Asian real estate professionals’ organizations, NAACP, Black Chamber of Commerce and Urban League attended. The board also received NAR Housing Opportunity grants to connect homeless veterans to permanent housing, hold an event about the community’s need for small homes and townhouses, host housing fairs, and hold a forum to explore the connection between housing and health. The board also took advantage of an NAR Smart Growth grant to fund a community workshop about a large development that many neighbors opposed, which helped facilitate the city, developers and neighbors reaching consensus.

Richmond Association of Realtors®, Virginia: The association used an NAR Housing Opportunity grant to support Project Homeless Connect, an event that matches volunteers and service providers with the homeless. NAR Housing Opportunity Grants were also used to educate the public on the connection between housing supply and economic prosperity and for seminars on community land trusts. The association also held two vacant property trainings supported by NAR’s Housing Opportunity Program, and invited Richmond public officials, city staff, property owners and housing advocates to learn about the effect vacant properties have on communities and real estate values and the techniques that can be used to turn these properties into community assets.

Coastal Carolinas Association of Realtors®, South Carolina: The association implemented an NAR Placemaking Grant to build a playground and received a NAR Smart Growth Grant to support a community planning analysis by the Urban Land Institute. The association also undertook a pilot walkability study, or “walkshop,” using an NAR Smart Growth Grant to host a national expert in walkability who carried out a “walk audit” to observe and analyze the Myrtle Beach community and to make a major commercial artery more safe and welcoming for pedestrians. 

Bronx-Manhattan North Association of Realtors®, New York: Using an NAR Placemaking Grant, the association partnered with the local Bronx Community Board 9 on a public arts project that used local artists to create a mural celebrating notable people from the Bronx, from hip-hop pioneers to Supreme Court Justice Sonia Sotomayor. The mural has contributed to the success of a new pedestrian plaza adjacent to a rail transit station. Taking advantage of several NAR Smart Growth Grants, the association worked with Bronx Community Board 9 to undertake long-term planning activities to change local land use and zoning. 

For additional information on NAR’s community outreach programs and awards, visit realtoractioncenter.com/community-outreach/.  

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 Stumble in February

WASHINGTON (March 22, 2017) — After starting the year at the fastest pace in almost a decade, existing-home sales slid in February but remained above year ago levels both nationally and in all major regions, according to the National Association of Realtors®.

Total existing-home sales 1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, retreated 3.7 percent to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January. Despite last month’s decline, February’s sales pace is still 5.4 percent above a year ago.

Lawrence Yun, NAR chief economist, says closings retreated in February as too few properties for sale and weakening affordability conditions stifled buyers in most of the country. “Realtors® are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” he said. “Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”

Added Yun, “A growing share of homeowners in NAR’s first quarter HOME survey said now is a good time to sell, but until an increase in listings actually occurs, home prices will continue to move hastily.”

The median existing-home price 2 for all housing types in February was $228,400, up 7.7 percent from February 2016 ($212,100). February’s price increase was the fastest since last January (8.1 percent) and marks the 60th consecutive month of year-over-year gains.

Total housing inventory 3 at the end of February increased 4.2 percent to 1.75 million existing homes available for sale, but is still 6.4 percent lower than a year ago (1.87 million) and has fallen year-over-year for 21 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (3.5 months in January).

All-cash sales were 27 percent of transactions in February (matching the highest since November 2015), up from 23 percent in January and 25 percent a year ago. Individual investors, who account for many cash sales, purchased 17 percent of homes in February, up from 15 percent in January but down from 18 percent a year ago. Seventy-one percent of investors paid in cash in February (matching highest since April 2015).

First-time buyers were 32 percent of sales in February, which is down from 33 percent in January but up from 30 percent a year ago. NAR’s 2016 Profile of Home Buyers and Sellers — released in late 2016 4 — revealed that the annual share of first-time buyers was 35 percent.

“The affordability constraints holding back renters from buying is a signal to many investors that rental demand will remain solid for the foreseeable future,” said Yun. “Investors are still making up an above average share of the market right now despite steadily rising home prices and few distressed properties on the market, and their financial wherewithal to pay in cash gives them a leg-up on the competition against first-time buyers.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage inched up in February to 4.17 percent from 4.15 percent in January. The average commitment rate for all of 2016 was 3.65 percent.

Properties typically stayed on the market for 45 days in February, down from 50 days in January and considerably more than a year ago (59 days). Short sales were on the market the longest at a median of 214 days in February, while foreclosures sold in 49 days and non-distressed homes took 45 days. Forty-two percent of homes sold in February were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in February were San Jose-Sunnyvale-Santa Clara, Calif., 23 days; San Francisco-Oakland-Hayward, Calif., 27 days; Vallejo-Fairfield, Calif., 33 days; Seattle-Tacoma-Bellevue, Wash., 36 days; and Boulder, Colo., at 37 days.

NAR President William E. Brown, a Realtor® from Alamo, California, says being fully prepared is the right strategy for prospective buyers this spring. “Seek a preapproval from a lender, know what your budget is and begin discussions with a Realtor® early on about your housing wants and needs,” he said. “Homes in many areas are selling faster than they were last spring. A buyer’s idea of a dream home in a popular neighborhood is probably the same as many others. That’s why they’ll likely have to decide quickly if they see something they like and can afford.”

Distressed sales 5 — foreclosures and short sales — were 7 percent of sales for the third straight month in February, and are down from 10 percent a year ago. Six percent of February sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in February (14 percent in January), while short sales were discounted 17 percent (10 percent in January).

Single-family and Condo/Co-op Sales

Single-family home sales declined 3.0 percent to a seasonally adjusted annual rate of 4.89 million in February from 5.04 million in January, and are now 5.8 percent above the 4.62 million pace a year ago. The median existing single-family home price was $229,900 in February, up 7.6 percent from February 2016.

Existing condominium and co-op sales descended 9.2 percent to a seasonally adjusted annual rate of 590,000 units in February, but are still 1.7 percent higher than a year ago. The median existing condo price was $216,100 in February, which is 8.2 percent above a year ago.

Regional Breakdown

February existing-home sales in the Northeast slumped 13.8 percent to an annual rate of 690,000, but are still 1.5 percent above a year ago. The median price in the Northeast was $250,200, which is 4.1 percent above February 2016.

In the Midwest, existing-home sales fell 7.0 percent to an annual rate of 1.20 million in February, but are still 2.6 percent above a year ago. The median price in the Midwest was $171,700, up 6.1 percent from a year ago.

Existing-home sales in the South in February rose 1.3 percent to an annual rate of 2.34 million, and are now 5.9 percent above February 2016. The median price in the South was $205,300, up 9.6 percent from a year ago.

Existing-home sales in the West decreased 3.1 percent to an annual rate of 1.25 million in February, but are 9.6 percent above a year ago. The median price in the West was $339,900, up 9.6 percent from February 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.

1 Existing-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.

2 The 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.

3 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).

4 Survey 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.

5 Distressed 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 February is scheduled for release on March 29, and Existing-Home Sales for March will be released April 21; release times are 10:00 a.m. ET.

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NAR HOME Survey: Economic, Financial Optimism Surges; Renters Lukewarm About Buying

WASHINGTON (March 15, 2017) — Multiple years of uninterrupted job gains and hope that the best is yet to come in 2017 are igniting consumer confidence across the country, and especially in rural and middle America, according to new consumer survey findings from the National Association of Realtors®. The survey additionally found a growing disparity among renters who think it’s a good time to buy and homeowners who think it’s a good time to sell. 

In NAR’s ongoing quarterly Housing Opportunities and Market Experience (HOME) survey 1, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations.

In the first three months of 2017, the share of households believing the economy is improving soared to its highest share in the survey’s five-quarter history (62 percent), and is up from 54 percent last quarter and 48 percent in March 2016.

In an extraordinary reversal from previous quarters, NAR Chief Economist Lawrence Yun says the surge in positive sentiment about the economy is primarily from respondents living in the Midwest (67 percent; 51 percent last quarter) and rural areas (63 percent; 43 percent last quarter). Last March, only 49 percent of Midwesterners and 35 percent of those living in rural areas thought the economy was improving.

“Confidence levels generally rise after a presidential election as the nation hopes for the best. Even though it is a highly polarized country, consumers for the most part have upbeat feelings about the economy right now,” he said. “Stronger business and consumer morale typically lead to even more hiring and spending, which in turn encourages more households to make big decisions like buying a home. These positive developments would be especially good news for prospective homebuyers in the more affordable Midwest region.”

Higher confidence in the economy is also translating to better feelings about households’ financial situation. The HOME survey’s monthly Personal Financial Outlook Index 2 showing respondents’ confidence that their financial situation will be better in six months, jumped to its highest reading in the survey, climbing to 62.6 in March from 59.8 in December 2016. A year ago, the index was 58.1.

Affordability and inventory challenges dimming renter optimism

On the cusp of the busy spring season, most households believe now is a good time to buy a home. However, confidence continues to trickle backwards among renters. Fifty-six percent of renters said now is a good time to buy, which is down both from last quarter (57 percent) and a year ago (62 percent). Eighty percent of homeowners (78 percent in December 2016; 82 percent in March 2016) think now is a good time to make a home purchase. Younger households, renters and those living in the costlier West region – where prices continue to spike – are the least optimistic.

“Inventory conditions are even worse than a year ago 3 and home prices and mortgage rates are on an uphill climb,” added Yun. “These factors are giving many renter households a pause about it being a good time to buy, even as their job prospects improve and wages grow. Unless there’s a significant boost in supply levels this spring, these constraints will unfortunately slow or delay some prospective buyers’ pursuit of purchasing a home.”

Led by the West, more homeowners view selling favorably right now

One promising trend that could alleviate supply shortages is the notable bump in the share of respondents this quarter who believe now is a good time to sell a home. Sixty-nine percent of homeowners think now is a good time to sell, which is up from last quarter (62 percent) and a year ago (56 percent). Continuing the trend over the past year, those in the West continue to be the most likely to think now is a good time to sell (77 percent), while also being the least likely to think it’s a good time to buy (61 percent).

NAR President William E. Brown, a Realtor® from Alamo, California, says homeowners looking to trade up or move down this spring could find themselves in a tricky spot without careful planning and a reliable expert on their side. “Demand far outpaces supply in many parts of the country right now, which means homeowners will likely sell their home much quicker than the time it takes to buy another,” he said. “Before listing, it’s best to have a carefully crafted plan in place. In addition to assisting in the hunt for a new home, a Realtor® is an invaluable negotiating partner in the common situation where a buyer’s new home purchase is contingent upon selling their property currently up for sale.”

About NAR’s HOME survey

In January through early March, a sample of U.S. households was surveyed via random-digit dial, including half via cell phones and the other half via land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,698 household responses are represented.

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 NAR’s Housing Opportunities and Market Experience (HOME) survey tracks topical real estate trends, including current renters and homeowners’ views and aspirations regarding homeownership, whether or not it’s a good time to buy or sell a home, and expectations and experiences in the mortgage market. New questions are added to the survey each quarter to reflect timely topics impacting real estate.

HOME survey data is collected on a monthly basis and will be reported each quarter. New questions will be added to the survey each quarter to reflect timely topics impacting the real estate marketplace. The next release is scheduled for Monday, June 12, 2017 at 10:00 a.m. ET.

2 Index ranges between 0 and 100: 0 = all respondents believe their personal financial situation will be worse in 6 months; 50 = all respondents believe their personal financial situation will be about the same in 6 months; 100 = all respondents believe their personal situation will be better in 6 months.

3 Total housing inventory at the end of January was at 1.69 million existing homes available for sale, which is 7.1 percent lower than a year ago (1.82 million) and has fallen year-over-year for 20 straight months.

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NAR Survey Finds Gen X on the Mend; More Children Living with Millennials and Boomers

WASHINGTON (March 7, 2017) — An improving economy, multiple years of strong job growth and the notable increase in home values in most markets fueled a greater share of purchases from Generation X households over the past year.

This is according to the National Association of Realtors® 2017 Home Buyer and Seller Generational Trends study, which evaluates the generational differences 1 of recent home buyers and sellers. The survey additionally found that a growing number of millennials and younger boomer buyers have children living at home; student debt is common among Gen X and boomer households; more millennials are buying outside the city; and younger generations are more likely to use a real estate agent.

Much of the spotlight in recent years has focused on the several challenges millennials are enduring on their journey to homeownership. According to Lawrence Yun, NAR chief economist, lost in this discussion are the numerous Generation X households who bought their first home, started a family and entered the middle part of their careers only to be rattled by job losses, falling home values and overall economic uncertainty during and after the Great Recession.

This year’s survey reveals that debt and little or no equity in their home slowed many Gen X households from buying sooner. Recent Gen X buyers delayed buying longer than millennials because of debt, were the most likely generation to have previously sold a distressed property and were the generation most likely to want to sell earlier but couldn’t because their home was worth less than their mortgage. Furthermore, Gen X buyers indicated they had the most student loan debt ($30,000).

“Gen X sellers’ median tenure in their previous home was 10 years, which puts many of them selling a property they bought right around the time home values were on the precipice of declining,” said Yun. “Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home. More Gen X sellers are expected this year and are definitely needed to ease the inventory shortages in much of the country.”

The uptick in purchases from Gen X buyers this year (28 percent) was the highest since 2014 and up from 26 percent in 2016. Millennials were the largest group of recent buyers for the fourth consecutive year (34 percent), but their overall share was down slightly from a year ago (35 percent). Baby boomers were 30 percent of buyers, and the Silent Generation made up 8 percent.

Younger boomers increasingly consider adult children when buying

This year’s survey also brought to light how the soaring cost of rent in many areas is likely influencing the decision of middle-aged parents to buy a home with their young adult children in mind. Younger boomers were the most likely to purchase a multi-generational home (20 percent; 16 percent in 2016), and the top reason for doing so was that children over 18 years old either moved back home or never left (30 percent; 27 percent in 2016).

“The job market is very healthy for young adults with a college education, but repaying student debt and dealing with ever-increasing rents on an entry-level salary are forcing many to either shack-up with several roommates or move back home,” said Yun. “This growing trend of delayed household formation is one of the main contributors to the nation’s low homeownership rate.”

Student debt is not just a millennial problem

Debt, particularly from student loans, appears to be a portion of the household budget of buyers in every generation. While millennials were the most likely to have student debt (46 percent), their typical balance ($25,000) was lower than Gen X buyers ($30,000). A combined 16 percent of younger and older boomer buyers also had student debt, with a median balance of over $10,000 for each group.

Among the share of buyers who said saving for a down payment was the most difficult task, millennials were most likely to cite student loans as the debt that delayed saving (55 percent), followed by Gen X (29 percent) and younger boomers (9 percent).

“Repaying student debt also appears to be slowing some current homeowners who went to graduate school and now can no longer afford to sell and trade up because of their loans,” added Yun. “Nearly a third of homeowners in a NAR survey released last year said student debt is preventing them from selling a home to buy a new one.”

More millennials moving to the suburbs…with their kids

Similar to previous years, roughly two-thirds of millennial buyers are married. One aspect of their household that has changed is the number of children in them. In this year’s survey, 49 percent of millennial buyers had at least one child, which is up from 45 percent last year and 43 percent two years ago.

With more kids in tow, the need for more space at an affordable price is increasingly pushing millennial buyers outside the city. Only 15 percent of millennial buyers bought in an urban area, which is down from 17 percent last year and 21 percent two years ago.

“Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” added Yun. “These strong feelings bode well for even greater demand in the future as more millennials settle down and begin raising families. A significant boost in new and existing inventory will go a long way to ensuring the opportunity is there for more of them to reach the market.”

Millennial buyers and sellers overwhelmingly go online and use a real estate agent

Regardless of age, buyers and sellers continue to see real estate agents as an integral part of a real estate transaction. In this year’s survey, nearly 90 percent of respondents said they worked with a real estate agent to buy or sell a home. This kept for-sale-by-owner transactions down at their lowest share ever (8 percent).

Not surprisingly, online and digital technology usage during the home search has increased in recent years. Although millennials and Gen X buyers were the most likely to go online during their search, they were also the most likely to buy their home using a real estate agent (92 percent and 88 percent, respectively). On the seller side, millennials were the most likely to use an agent (90 percent), followed closely by Gen X and younger boomer sellers (each at 89 percent).

“Online and mobile technology is increasingly giving consumers a glut of real estate data at their disposal,” said NAR President William E. Brown, a Realtor® from Alamo, California. “However, at the end of the day, buyers and sellers of all ages — but especially younger and often DIY-minded consumers — seek and value a Realtors®’ ability to dissect this information and use their expertise and market insights to coach buyers and sellers through the complexities of a real estate transaction.”

NAR mailed a 132-question survey in July 2016 using a random sample weighted to be representative of sales on a geographic basis to 93,171 recent homebuyers. Respondents had the option to fill out the survey via hard copy or online; the online survey was available in English and Spanish. A total of 5,465 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 5.9 percent. The sample at the 95 percent confidence level has a confidence interval of plus-or-minus 1.32 percent.

The recent homebuyers had to have purchased a home between July of 2015 and June of 2016. All information is characteristic of the 12-month period ending in June 2016 with the exception of income data, which are for 2015.

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.

# # #

1 Survey generational breakdowns: younger millennials (ages 26 and under); older millennials (ages 27-36); Generation X (ages 37-51); younger boomers (ages 52-61); older boomers (ages 62-70); and the Silent Generation (ages 71-91).

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Pending Home Sales Weaken in January

WASHINGTON (February 27, 2017) — Insufficient supply levels led to a lull in contract activity in the Midwest and West, which dragged down pending home sales in January to their lowest level in a year, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, decreased 2.8 percent to 106.4 in January from an upwardly revised 109.5 in December 2016. Although last month’s index reading is 0.4 percent above last January, it is the lowest since then.

Lawrence Yun, NAR chief economist, says home shoppers in January faced numerous obstacles in their quest to buy a home. “The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” he said. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago 1. Most notably in the West, it’s not uncommon to see a home come off the market within a month.”

According to Yun, interest in buying a home is the highest it has been since the Great Recession. Households are feeling more confident about their financial situation, job growth is strong in most of the country and the stock market has seen record gains in recent months. While these factors bode favorably for increased sales in coming months, buyers are dealing with challenging supply shortages that continue to run up prices in many areas.

“January’s accelerated price appreciation 2 is concerning because it’s over double the pace of income growth and mortgage rates are up considerably from six months ago,” said Yun. “Especially in the most expensive markets, prospective buyers will feel this squeeze to their budget and will likely have to come up with additional savings or compromise on home size or location.”

Existing-home sales are forecast to be around 5.57 million this year, an increase of 2.2 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

“Sales got off to a fantastic start in January, but last month’s retreat in contract signings indicates that activity will likely be choppy in coming months as buyers compete for the meager number of listings in their price range,” added Yun.

The PHSI in the Northeast rose 2.3 percent to 98.7 in January, and is now 3.6 percent above a year ago. In the Midwest the index fell 5.0 percent to 99.5 in January, and is now 3.8 percent lower than January 2016.

Pending home sales in the South inched higher (0.4 percent) to an index of 122.5 in January and are now 2.0 percent above last January. The index in the West dropped 9.8 percent in January to 94.6, and is now 0.4 percent lower than a year ago.

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.

# # #

1 Properties typically stayed on the market for 50 days in January, down considerably from a year ago (64 days).

2 January’s median existing-home price increased 7.1 percent, which was the fastest since January 2016 (8.1 percent).

* 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: NAR’s 2017 Profile of Home Buyer and Seller Generational Trends will be released March 7, the first quarter Housing Opportunities and Market Experience (HOME) survey is scheduled for March 15, Existing-Home Sales for February will be reported March 22, and the next Pending Home Sales Index will be March 29; all release times are 10:00 a.m. ET.

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Stable Growth Expected for Commercial Real Estate in 2017

WASHINGTON (February 23, 2017) — Steered ahead by strengthening demand in smaller markets, the commercial real estate sector should remain on stable ground in 2017 and offer decent returns for investors, according to the latest National Association of Realtors® quarterly commercial real estate forecast.

National office vacancy rates are forecast by Realtors® to retreat 1.1 percent to 12.1 percent over the coming year as job growth in business and professional services brings increased need for office space. The vacancy rate for industrial space is expected to decline 1.3 percent to 7.1 percent, and retail availability to decrease 0.7 percent to 11.2 percent. Only the multifamily sector is predicted to have little change to its vacancy rate over the next year as new apartment completions keep openings mostly flat at 6.5 percent.

Lawrence Yun, NAR chief economist, says the U.S. economy is poised for slight improvement in 2017. “Last year was the 11th year in a row of subpar GDP growth, but renewed corporate optimism leading to a focus on investment and a desperately needed boost in residential construction should pave the way for modest expansion this year of around 2.4 percent,” he said. “Steady hiring and low local unemployment levels are finally supporting higher wages and increased spending, which in turn bodes well for sustained demand for all commercial property types.”

The apartment sector is expected to preserve its status as a top performer this year simply because ongoing supply and affordability challenges are keeping the nation’s low homeownership rate from seeing meaningful improvement. Even with a small uptick in the vacancy rate as new building completions catch up with demand, rents will likely maintain their solid growth in most of the country.

“Especially in the costliest metro areas, higher home prices and mortgage rates are squeezing the budget for many renters looking to buy and inevitably forcing them to sign a lease for at least another year,” said Yun.

According to Yun, commercial property prices — especially in Class A assets in larger markets — surpassed pre-crisis levels last year because of aggressive bidding and lower inventory levels. However, with the Federal Reserve expected to raise short-term rates three times in 2017, a minor price correction may be in store this year as cap rates move higher.

“Similar to the biggest ongoing challenges in the residential market, supply and demand imbalances continue to put upward pressure on commercial property prices as investors search for yield in smaller markets,” said Yun. “Realtors® are increasingly citing inventory shortages as their top concern as the pace of new projects slows in large cities and middle-tier and smaller markets see a growing appetite for space.” 

The latest Realtors® Commercial Real Estate Market Survey highlighted the strong underlying demand for commercial properties up to $2.5 million, where most transactions from NAR’s commercial members reside. Compared to a year ago, sales volume rose 12.9 percent, prices increased 5.5 percent and the average transaction value equaled $1.1 million.

NAR’s most recent Business Creation Index (BCI) also showed a positive trend for smaller commercial businesses. Created to monitor local economic conditions from the perspective of NAR’s commercial members, December’s BCI found that Realtors® reported more business openings and fewer closings over the past year in their market.  

Yun says at least in the short term, the possibility of a more tax-friendly business environment combined with the positive benefits of 1031 exchanges could quicken the pace of economic growth and support stronger commercial market fundamentals. The industrial sector — already enjoying increased demand from the soaring popularity of e-commerce — could see a further decline in vacancy rates if increased manufacturing comes to fruition and accelerates the need for more warehouse space.

“The positive direction for commercial real estate this year will be guided by the steadily expanding U.S. economy, which has legs to grow and continues to be one of the top economic performers and safest bets in the world,” concluded Yun.  

NAR’s latest Commercial Real Estate Outlook 1 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 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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1 Additional analysis will be posted under Economists’ Outlook in the Research blog section of Realtor.org in coming days at: http://economistsoutlook.blogs.realtor.org/.

The next commercial forecast and quarterly market report will be released May 30 at 10:00 a.m. ET.

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Existing-Home Sales Jump in January

WASHINGTON (February 22, 2017) — Existing-home sales stepped out to a fast start in 2017, surpassing a recent cyclical high and increasing in January to the fastest pace in almost a decade, according to the National Association of Realtors®. All major regions except for the Midwest saw sales gains last month.

Total existing-home sales 1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, expanded 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. January’s sales pace is 3.8 percent higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).

Lawrence Yun, NAR chief economist, says January’s sales gain signals resilience among consumers even in a rising interest rate environment. “Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” he said. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”

The median existing-home price 2 for all housing types in January was $228,900, up 7.1 percent from January 2016 ($213,700). January’s price increase was the fastest since last January (8.1 percent) and marks the 59th consecutive month of year-over-year gains.

Total housing inventory 3 at the end of January rose 2.4 percent to 1.69 million existing homes available for sale, but is still 7.1 percent lower than a year ago (1.82 million) and has fallen year-over-year for 20 straight months. Unsold inventory is at a 3.6-month supply at the current sales pace (unchanged from December 2016).

Properties typically stayed on the market for 50 days in January, down from 52 days in December and considerably more a year ago (64 days). Short sales were on the market the longest at a median of 108 days in January, while foreclosures sold in 51 days and non-distressed homes took 49 days. Thirty-eight percent of homes sold in January were on the market for less than a month.

“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” added Yun. “NAR and realtor.com®’s new ongoing research — the Realtors® Affordability Distribution Curve and Score — revealed that the combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.” 

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in January were San Jose-Sunnyvale-Santa Clara, Calif., 43 days; San Francisco-Oakland-Hayward, Calif., 47 days; San Diego-Carlsbad, Calif., 55 days; Seattle-Tacoma-Bellevue, Wash., 57 days; and Nashville-Davidson-Murfreesboro-Franklin, Tenn., Vallejo-Fairfield, Calif., and Greeley, Colo., all at 58 days.

NAR President William E. Brown, a Realtor® from Alamo, California, cautions about another source that could possibly drag down inventory for would-be buyers in coming months. “Supply and demand imbalances continue to be burdensome in many markets, and now Fannie Mae is supporting a Wall Street firm’s investment in single-family rentals,” he said. “This will only further hamper tight supply and put major investors in direct competition with traditional buyers. Instead, the GSEs should lower overly burdensome fees and help qualified borrowers become homeowners.”

First-time buyers were 33 percent of sales in January, which is up from 32 percent both in December and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers — released in late 2016 4 — revealed that the annual share of first-time buyers was 35 percent.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased slightly in January to 4.15 percent from 4.20 percent in December. The average commitment rate for all of 2016 was 3.65 percent.

All-cash sales were 23 percent of transactions in January, up from 21 percent in December but down from 26 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in January, unchanged from December and down from 17 percent a year ago. Fifty-nine percent of investors paid in cash in January.   

Distressed sales 5 — foreclosures and short sales — were 7 percent of sales in January, unchanged from December and down from 9 percent a year ago. Five percent of January sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 14 percent below market value in January (20 percent in December), while short sales were discounted 10 percent (unchanged from December).

Single-family and Condo/Co-op Sales

Single-family home sales grew 2.6 percent to a seasonally adjusted annual rate of 5.04 million in January from 4.91 million in December 2016, and are now 3.7 percent above the 4.86 million pace a year ago. The median existing single-family home price was $230,400 in January, up 7.3 percent from January 2016.

Existing condominium and co-op sales leapt 8.3 percent to a seasonally adjusted annual rate of 650,000 units in January, and are now 4.8 percent higher than a year ago. The median existing condo price was $217,400 in January, which is 6.2 percent above a year ago.

January existing-home sales in the Northeast jumped 5.3 percent to an annual rate of 800,000, and are now 6.7 percent above a year ago. The median price in the Northeast was $253,800, which is 2.5 percent above January 2016.

In the Midwest, existing-home sales decreased 1.5 percent to an annual rate of 1.29 million in January, and are 0.8 percent below a year ago. The median price in the Midwest was $174,900, up 6.5 percent from a year ago.

Existing-home sales in the South in January rose 3.6 percent to an annual rate of 2.31 million, and are now 3.1 percent above January 2016. The median price in the South was $201,400, up 9.2 percent from a year ago.

Existing-home sales in the West ascended 6.6 percent to an annual rate of 1.29 million in January, and are now 8.4 percent above a year ago. The median price in the West was $332,300, up 6.8 percent from January 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.

1 Existing-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.

2 The 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.

3 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).

4 Survey 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.

5 Distressed 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 first quarter Commercial Real Estate Report/Forecast will be released on February 23, and the next Pending Home Sales Index will be February 27; release times are 10:00 a.m. ET.

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NAR Presents Realtor® Barbara Lach with Distinguished Service Award

ORLANDO, Fla. (November 7, 2016) – Barbara B. Lach, a Realtor® from Columbus, Ohio has received the National Association of Realtors® 2016 Distinguished Service Award. The honor is presented yearly to no more than two of NAR’s more than 1.2 million members. Winners were recognized at the REALTORS® Conference Expo in Orlando, Florida.

NAR established the DSA in 1979 to honor Realtors® who have made outstanding contributions to the real estate industry and who serve as leaders in their local communities. The award is considered the highest honor an NAR member can receive; recipients must be active at the local, state and national association levels. NAR President Tom Salomone presented the award to Lach.

“It is my tremendous honor to present this award to Barbara Lach. Her accomplishments and service within the industry are tremendous, but Barbara’s impact on her local community and family are unprecedented,” said Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “It is rare to find someone so committed to the real estate profession while raising eight children and supporting the local community for decades.”

Lach has been a Realtor® for 36 years for Coldwell Banker King Thompson in Columbus, Ohio. During her almost four-decade career, she has had a great impact on the Realtor® family at every level of the organization. 

“It is such a thrill to receive the National Association of Realtors®’ Distinguished Service Award,” said Lach. “I have met and worked with so many dedicated and talented realtors over the course of my career, and I thought just to be nominated by the Columbus Realtors® and the Ohio Association of Realtors® was one of the greatest honors I could ever receive.”

Lach has held numerous leadership positions within the Realtor® organization, including representing Ohio and Michigan as regional vice president in 2008, and being a member of the NAR Board of Directors from 1998 to 1999 and again from 2001 to 2016. She also chaired the Legislative and Political Forum in 2010 and was a federal political coordinator from 2003 to 2007. Lach was inducted into the Realtors® Political Action Committee Hall of Fame in 2008.

Closer to home, Lach has been a member of the Ohio Association of Realtors® since 1980, serving on the board of directors since 1989 and was named president in 2004. She received the Vincent T. Avento Lifetime Achievement Award and has chaired dozens of OAR committees, including the Ohio Realtors® Political Action, Issues Mobilization, Legal Action and Legislative committees. In 2009, she was awarded the Phillip R. Barnes RPAC Achievement Award, and in 2002, she served as chair of the Finance and Budget Committee.

At the local level, Lach served as president of Columbus Realtors® in 2001 and received recognition as Realtor®/Salesperson of the Year in 1991. She was a multiple year recipient of the Volunteer Service Award. The local association also awarded her the Lifetime Achievement Award in 2005. Lach was responsible for the revival of the Columbus Realtors® Charitable Foundation and its efforts to provide grants and educational scholarships in the area. Lach has been active in the Women’s Council of Realtors® since 1985, serving as local and state president before being elected national president in 2002.

Lach has been an exceptional asset to her community, making significant contributions beyond her real estate practice. She has a long served as an officer of the Columbus Association for the Performing Arts Board of Trustees, where her leadership helped CAPA become a national leader in historic theatre restoration and promotion of the arts. She has spent many years on the board of the Buckeye Ranch, one of the country’s leading providers of emotional, behavioral and mental health services for children, young adults and families.

She also currently serves on the boards of the Jo Ann Davidson Ohio Leadership Institute, Lincoln Theatre Association, Columbus Medical Association Foundation; she is current president of the Friends of the Ohio Governor’s Residence and Heritage Garden. Past service includes the board of the Columbus Housing Partnership, membership in and board presidencies of the Academy of Medicine Alliance of Columbus, American Federation for Aging Research, Foundation of the Catholic Diocese of Columbus and the Jazz Arts Group. Lach and her beloved late husband and distinguished cardiologist, Dr. Ralph Lach, balanced their professional careers and community activities while raising their eight children.

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NAR Installs 2017 Officers

ORLANDO, Fla. (November 7, 2016) – Bill Brown, a second generation Realtor® from Alamo, California was installed as 2017 president of the National Association of Realtors® at the association’s Inaugural Gala on Nov. 3 during the 2016 REALTORS® Conference Expo. The 2017 Officers, Vice Presidents, and Regional Vice Presidents took office at the adjournment of the Board of Directors meeting on Nov. 7. Brown has been active in real estate for 36 years and is the founder of Investment Properties, a division of the family real estate business started by his father, William H. Brown, in 1964, which focuses on the sale of apartment buildings to both institutional and private capital investors.

Brown was NAR’s 2016 president-elect and 2015 first vice president. He has served in numerous positions at the local, state and national levels, including as an NAR director since 1991, the 2004 chairman of the Realtors® Political Action Committee Trustees, a committee liaison in 2006 and 2011, and 2012 vice president for Region 13, comprised of California, Hawaii and Guam. In 2008, he served as the California Association of Realtors®president and was honored as Realtor® of the Year; he served on CAR’s Executive Committee six times. Brown was elected president of the Oakland Association of Realtors® in 1984.

Elizabeth Mendenhall is 2017 NAR president-elect. She has been a Realtor® for 20 years and is CEO of RE/MAX Boone Realty in Columbia, Missouri. Mendenhall is a sixth-generation Realtor® and holds numerous real estate designations. On the national level, Mendenhall currently serves on the Executive Committee and Board of Directors. She chaired NAR’s Strategic Planning Committee in 2012, served as vice president of committees in 2011 and was the NAR liaison to association leadership in 2008. In 2010, Mendenhall served as president of the Missouri Association of Realtors®, and in 2003, she served as president of the Columbia Board of Realtors®and was named their Realtor® of the Year.

Thomas Riley, a Realtor® from Bedford, New Hampshire is the 2017 NAR treasurer. He has been a Realtor® for more than 35 years and is president of Riley Enterprises Inc., specializing in residential and commercial real estate and property management. In 2015, Tom served as NAR’s vice president for Region 1, serving Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont. He previously served on the NAR Board of Directors from 2007 to 2008 and 2010 to 2013 and served multiple times on the Finance Committee, including as vice chair in 2014. Riley served as president of the New Hampshire Association of Realtors® in 2011 and president of the Greater Manchester/Nashua Board of Realtors® in 1998. 

John Smaby is 2017 NAR first vice president. Smaby is a second-generation Realtor® and has been in the industry for 37 years; he is a broker at Edina Realty, where he specializes in residential real estate. Smaby has held numerous positions nationally and with the Minnesota Association of Realtors®, where he served as president in 2015, treasurer in 2013 and a member of the Board of Directors since 2013. He was MNAR’s Realtor® Political Action Committee chair from 2013 to 2015 and the RPAC Trustees and Public Advocacy Committee chair in 2014. In 2013, Smaby received the Ed Anderson Political Achievement Award and in 2014, was named Realtor® of the Year.

Mabél Guzmán is 2017 NAR Vice President, Association Affairs. Guzmán, a Realtor® for more than 20 years, is a broker with @properties in Chicago. At the national level, she served as the 2014 chair for NAR’s Conventional Finance Policy Committee and in 2015 as the liaison for Global Committees. She chaired the Student Loan Debt Working Group from 2014 to 2016. Guzmán served as a member of the Illinois Realtors® Board of Directors from 2009 to 2011. In 2014 and 2015, she received their President’s Medallion for Outstanding Service. Guzmán was elected treasurer in 2009 and president in 2011 of the Chicago Association of Realtors® and was a member of the board of directors from 2007 to 2009. In 2012, she was named their Realtor® of the Year.

Kevin Sears is 2017 NAR Vice President, Government Affairs. Sears, a Realtor®for over 20 years from Springfield, Massachusetts, is broker/partner of Sears Real Estate, specializing in single-family brokerage and property management. Sears has served NAR in numerous capacities, including as NAR’s 2016 vice president for Region 1, comprised of Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont. He has served on the NAR Board of Directors since 2008 and as a federal political coordinator for over 15 years. In 2016, Sears chaired the Realtor®Party of the Future Strategic Planning Work Group. The Massachusetts Association of Realtors®elected him President in 2010 and he has been a member of their Board of Directors since 2000. In 2006, MAR named Sears Realtor®of the Year. He was elected president of the Realtor®Association of Pioneer Valley in 2005.

NAR’s 2017 regional vice presidents are: Jamie Diane Moore, Warwick, Rhode Island, Region 1 (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont); Allan H. Dechert, Avalon, New Jersey, Region 2 (New Jersey, New York and Pennsylvania); Mary Dykstra, Roanoke, Virginia, Region 3 (Delaware, District of Columbia, Maryland, Virginia and West Virginia); Ann McDonald, Winchester, Kentucky, Region 4 (Kentucky, North Carolina, South Carolina and Tennessee); Sherri Meadows, Ocala, Florida, Region 5 (Alabama, Florida, Georgia, Mississippi, Puerto Rico and the Virgin Islands); William G. Milliken Jr., Ann Arbor, Michigan, Region 6 (Michigan and Ohio);

Patrick Dalessandro, Prospect Heights, Illinois, Region 7 (Illinois, Indiana and Wisconsin); Donald R. Marple, Davenport, Iowa, Region 8 (Iowa, Minnesota, Nebraska, North Dakota and South Dakota); Karen Crowson, Benton, Arkansas, Region 9 (Arkansas, Kansas, Missouri and Oklahoma); Leslie Rouda Smith, Plano, Texas, Region 10 (Louisiana and Texas); George Harvey, Telluride, Colorado, Region 11 (Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming); Julie DeLorenzo, Boise, Idaho, Region 12 (Alaska, Idaho, Montana, Oregon and Washington); and Leil Koch, Kula, Hawaii, Region 13 (California, Hawaii and Guam).

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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Just-Released FHA Report Shows Fresh Opportunity to Make Homeownership More Affordable

WASHINGTON (November 15, 2016) — The Federal Housing Administration’s just released actuarial report shows that the Mutual Mortgage Insurance Fund is on a steady financial trajectory, a finding the National Association of Realtors® believes is an opportunity to make FHA’s low-down-payment mortgage option available to an even broader swath of borrowers.

“FHA’s actuarial report shows that the fund has indisputably found its footing,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “That’s good news for taxpayers, and a reflection of FHA’s sound stewardship. It’s clear from this report that FHA can continue taking responsible steps to manage their risk even as they take action to make homeownership more affordable for lower- and middle-income buyers.”

FHA’s MMIF is responsible for paying lenders if a mortgagor defaults. In a sign of continuing health, the report shows that the fund’s “seriously delinquent” rate is at a ten-year low, while the overall economic value of the fund has increased by $3.8 billion.

Last year the MMIF also achieved a 2 percent capital reserve ratio for the first time since the Great Recession. This marked an important benchmark showing that the fund had strongly rebounded, a finding reinforced by the 2.3 percent capital reserve ratio FHA reported today. FHA also reported a 3.2 percent reserve ratio for the “forward” program, which encompasses FHA’s non-Home Equity Conversion Mortgage portfolio.

NAR believes that the report would have appeared even stronger if not for weaknesses in the HECM program. In light of the MMIF’s increasingly good health, NAR is encouraging FHA to reduce mortgage insurance premiums to better reflect the risk in the marketplace and fulfill its mission of serving low- and moderate-income borrowers.

According to NAR estimates, the 50-basis-point premium cut announced in January 2015 provided an annual savings of $900 for nearly 2 million FHA homeowners. A recent Federal Reserve study also found that the January 2015 reduction in mortgage insurance premiums had a quick and significant effect on FHA mortgage volume.

NAR also supports eliminating “life of loan” mortgage insurance, which borrowers must continue to pay until the loan is extinguished or refinanced. Conventional mortgage products, by contrast, traditionally require mortgage insurance only until a sufficient amount of equity is achieved on the property.

 “FHA mortgages are an important option for buyers, but high premiums and lifetime insurance requirements can take that option right off the table,” Brown said. “By lowering premiums and eliminating life of loan mortgage insurance, FHA can expand on their work to serve a broad population of homebuyers. We look forward to working with them in the months ahead to bring these changes to light.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/X85bHZ4Vpck/just-released-fha-report-shows-fresh-opportunity-to-make-homeownership-more-affordable

Second Century Ventures Invests in Trust Stamp and Keeping Realtors® Safe

CHICAGO (November 16, 2016) –The National Association of Realtors®’ venture capital fund Second Century Ventures has become a strategic investor in Trust Stamp, an identity authentication company that leverages artificial intelligence and blockchain technologies.

Trust Stamp, a startup founded in 2015 by Gareth Genner and Andrew Gowasack, is one of eight companies that entered SCV’s vertical tech accelerator program, REach®, earlier this year.

The company uses patented artificial intelligence software to analyze hundreds of public records and social data to quickly provide reliable identification verification for real estate professionals meeting new clients or unknown individuals. Trust Stamp combines driver’s license analysis and proof-of-liveness photographic identification techniques with data from more than 200 social media sites and public records, including criminal and sex offender databases, to verify an individuals’ identity and create a trustworthiness score.

Trust Stamp has clients across multiple industries, including a major U.S. bank, and is launching a Facebook app to help consumers safely buy and sell in their local community through the new Facebook Marketplace feature. Trust Stamp is also a pioneer in the field of blockchain technology and is able to store and access data using techniques that are immune to the distributed denial of service, or DDoS, attacks that are plaguing many major internet companies.

“Second Century Ventures aims to develop and deliver technologies to innovate the real estate industry and help realty professionals to best serve buyers, sellers and clients,” said President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties.

 “Investing in a fast, convenient and affordable tool like Trust Stamp to establish the identity and trustworthiness of a stranger will better help Realtors® stay safe and protect clients and their home or property.”

Trust Stamp has created a real estate-specific webpage and mobile apps that are available only to NAR members and accessible via their NRDS number. Using the webpage or app, agents enter an individual’s email address or cell phone number and invite them to make a Trust Stamp. It takes only a few minutes for an individual to create a basic profile with a photo of his or her driver’s license, a selfie and links to one or more social accounts. Agents receive notification when the Trust Stamp is complete along with the individual’s verified name, photo and trustworthiness score.

“While our technology is in demand in many industries, REach offered us a unique opportunity to work directly with industry professionals to design a product that precisely matched he needs of real estate professionals,” said Andrew Gowasack, CEO of Trust Stamp. “As a result of that iterative discovery process, there is an overwhelming demand for Trust Stamp amongst the Realtor® community and we estimate that over half a million Realtors® will have installed the Trust Stamp application within 12 months of launch.”

According to NAR’s 2016 Member Safety Report, which asked members how safe they feel on the job, while 96 percent of Realtors® have never been the victim of crime, nearly 40 percent have found themselves in situations where they have feared for their safety or the safety of their personal information. The most common fearful situations were at open houses, showing vacant and model homes, working with properties that were unlocked or unsecured, and showing properties in remote areas.

“Most real estate professionals are juggling multiple business and client priorities and nearly always on the go; this makes an easy-to-use online and mobile tool – that’s also powerful – ideal to improve their business and personal safety,” said Dale Stinton, SCV president and NAR CEO. “Investing further in Trust Stamp, from a REach accelerator company to now a member of our strategic investments portfolio, demonstrates how much Trust Stamp has impressed us and how well we think the tool will do in the real estate industry and beyond.”

For more information about Trust Stamp’s tool for real estate agents, visit truststamp.net/re.

About Second Century Ventures

Second Century Ventures (SCV) is an early-stage technology fund, backed by the National Association of Realtors®, which leverages the association’s 1.1 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. Learn more at www.secondcenturyventures.com.

About National Association of Realtors®

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/gRSOejw2Wsk/second-century-ventures-invests-in-trust-stamp-and-keeping-realtors-safe

Existing-Home Sales Jump Again in October

WASHINGTON (November 22, 2016) — Existing-home sales ascended in October for the second straight month and eclipsed June’s cyclical sales peak to become the highest annualized pace in nearly a decade, according to the National Association of Realtors®. All major regions saw monthly and annual sales increases in October.

Total existing-home sales 1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.0 percent to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million in September. October’s sales pace is 5.9 percent above a year ago (5.29 million) and surpasses June’s pace (5.57 million) as the highest since February 2007 (5.79 million).  

Lawrence Yun, NAR chief economist, says the wave of sales activity the last two months represents a convincing autumn revival for the housing market. “October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply,” he said. “Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.”  

Added Yun, “The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall.”  

The median existing-home price 2 for all housing types in October was $232,200, up 6.0 percent from October 2015 ($219,100). October’s price increase marks the 56th consecutive month of year-over-year gains.  

Total housing inventory 3 at the end of October declined 0.5 percent to 2.02 million existing homes available for sale, and is now 4.3 percent lower than a year ago (2.11 million) and has fallen year-over-year for 17 straight months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.4 months in September.  

“The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth,” said Yun. “A prolonged continuation of the robust single-family starts pace seen last month (869,000) would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe.”

Properties typically stayed on the market for 41 days in October, up from 39 days in September but down considerably from a year ago (57 days). Short sales were on the market the longest at a median of 99 days in October, while foreclosures sold in 50 days and non-distressed homes took 39 days. Forty-three percent of homes sold in October were on the market for less than a month.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage inched up in October for the second straight month, rising to 3.47 percent from 3.46 percent in September. The average commitment rate for all of 2015 was 3.85 percent.

“As a result of the anticipated economic stimulus in early 2017, mortgage rates post-election have now surged to around 4 percent as investors expect a strengthening economy and higher inflation,” said Yun. “In the short-term, some prospective buyers may rush to lock in their rate and buy now, while others — especially those in higher-priced markets — may be forced to delay as a larger monthly payment outstretches their budget.”

First-time buyers were 33 percent of sales in October, which is down from 34 percent in September but up from and 31 percent a year ago. NAR’s 2016 Profile of Home Buyers and Sellers — released last month 4 — revealed that the annual share of first-time buyers was 35 percent (32 percent in 2015), which is the highest since 2013 (38 percent).

On the subject of first-time buyers, NAR President William E. Brown, a Realtor® from Alamo, California, says the Federal Housing Administration’s low-down-payment mortgage option helps many young and moderate income borrowers achieve homeownership. FHA’s just released actuarial report shows the Mutual Mortgage Insurance Fund is on consistently solid financial footing, and FHA should take responsible steps to continue managing their risk while also addressing the high premiums and lifetime insurance requirements that often times dissuade would-be buyers from considering a FHA mortgage.

“To alleviate the cost for borrowers and better reflect the current risk in the marketplace, Realtors® encourage FHA to reduce mortgage insurance premiums and consider eliminating ‘life of loan’ mortgage insurance,” he said. “These two moves would help the current homeownership rate recover from its near all-time low and give more prospective first-time buyers a more affordable financing option.”

All-cash sales were 22 percent of transactions in October, up from 21 percent in September but down from 24 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in October, down from 14 percent in September and unchanged from a year ago. Sixty-one percent of investors paid in cash in October. 

Distressed sales 5 — foreclosures and short sales — inched forward to 5 percent in October, up from 4 percent in September but down from 6 percent a year ago. Four percent of October sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in October (15 percent in September), while short sales were discounted 16 percent (11 percent in September).

Inventory data from Realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in October were San Francisco-Oakland-Hayward, Calif., 35 days; San Jose-Sunnyvale-Santa Clara, Calif., 37 days; Seattle-Tacoma-Bellevue, Wash., 42 days; Nashville-Davidson-Murfreesboro-Franklin, Tenn., 43 days; and Denver-Aurora-Lakewood, Colo., at 44 days.

Single-family and Condo/Co-op Sales

Single-family home sales increased 2.3 percent to a seasonally adjusted annual rate of 4.99 million in October from 4.88 million in September, and are now 6.6 percent above the 4.68 million pace a year ago. The median existing single-family home price was $233,700 in October, up 5.9 percent from October 2015.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 610,000 units in October (unchanged from September and a year ago). The median existing condo price was $220,300 in October, which is 6.2 percent above a year ago.

Regional Breakdown

October existing-home sales in the Northeast climbed 1.4 percent to an annual rate of 750,000, and are now 1.4 percent above a year ago. The median price in the Northeast was $255,500, which is 2.9 percent above October 2015.

In the Midwest, existing-home sales grew 2.3 percent to an annual rate of 1.36 million in October, and are now 6.3 percent above a year ago. The median price in the Midwest was $181,500, up 5.8 percent from a year ago.

Existing-home sales in the South in October rose 2.8 percent to an annual rate of 2.22 million, and are now 4.7 percent above October 2015. The median price in the South was $202,300, up 7.4 percent from a year ago.

Existing-home sales in the West increased 0.8 percent to an annual rate of 1.27 million in October, and are now 10.4 percent higher than a year ago. The median price in the West was $345,800, up 7.8 percent from October 2015.

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.

1 Existing-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.

2 The 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.

3 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).

4 Survey 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.

5 Distressed 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 nar.realtor.

NOTE: NAR’s Pending Home Sales Index for October will be released November 30, and Existing-Home Sales for November will be released December 21; release times are 10:00 a.m. ET.

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Pending Home Sales Crawl Forward in October

WASHINGTON (November 30, 2016) — Pending home sales were mostly unchanged in October, but did squeak out a meager gain for the second consecutive month, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, inched up 0.1 percent to 110.0 in October from a slight downward revision of 109.9 in September. With last month’s small increase, the index is now 1.8 percent higher than last October (108.1).  

Lawrence Yun, NAR chief economist, says October’s minuscule uptick in contract activity nudged pending sales up to their highest level since July (111.2). “Most of the country last month saw at least a small increase in contract signings and more notably, activity in all four major regions is up from a year ago,” added Yun. “Despite limited listings and steadfast price growth that’s now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas.”  

On the topic of housing supply — which has been grossly inadequate all year — Yun explains that the unwelcoming but expected seasonal retreat in new listings is now arriving at a time when price growth remains around triple the pace of wages and properties continue to sell at a much faster pace than a year ago 1. Furthermore, highlighting the heightened imbalance of supply in relation to demand, 40 percent of sales in October sold at or above list price, an increase from 33 percent last October 2

“Many of the successful shoppers in October likely had to move fast and outbid others for the few listings available in the affordable price range,” explained Yun. “Those obtaining a mortgage last month were likely the last group of buyers to lock in a rate near historically low levels now that rates have marched to around 4 percent since the election.”

With contract activity holding steady, Yun expects existing sales to close out 2016 at a pace of around 5.36 million, which surpasses 2015 (5.25 million) and is the highest since 2006 (6.48 million).

“Low supply has kept prices elevated all year and has put pressure on the budgets of buyers,” added Yun. “With mortgage rates expected to rise into next year and put added strain on affordability, sales expansion will be contingent on more inventory coming onto the market and continued job gains.”

The PHSI in the Northeast nudged forward 0.4 percent to 96.9 in October, and is now 3.9 percent above a year ago. In the Midwest the index rose 1.6 percent to 106.3 in October, and is now 1.2 percent higher than October 2015.

Pending home sales in the South declined 1.3 percent to an index of 120.1 in October but are still 0.8 percent higher than last October. The index in the West climbed 0.7 percent in October to 108.3, and is now 2.5 percent above a year ago.

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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1 According to October’s Realtors® Confidence Index, the median days on the market in October was 41 days, which is down considerably from a year ago (57 days).

2 Also according to data from October’s Realtors® Confidence Index.

* 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:  NAR’s fourth quarter Housing Opportunities and Market Experience (HOME) survey will be released on December 14, Existing-Home Sales for November will be reported December 21, and the next Pending Home Sales Index will be December 28; all release times are 10:00 a.m. ET.

Article source: http://feedproxy.google.com/~r/narnewsreleases/~3/wcZiE9k0U8k/pending-home-sales-crawl-forward-in-october

NAR, Realtor.com® Identify Growing Rift Between Housing Availability and Affordability

WASHINGTON (February 16, 2017) — Existing-home sales are forecast to expand 1.7 percent in 2017, but a new housing affordability model created jointly by the National Association of Realtors® and realtor.com®, a leading online real estate destination, operated by operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS, NWSLV] subsidiary Move, Inc., suggests homebuyers at many income levels could see an inadequate amount of listings on the market within their price range in coming months.  

Using data on mortgages 1, state-level income 2 and listings on realtor.com®, the Realtors® Affordability Distribution Curve and Score is NAR and realtor.com®’s new ongoing monthly research designed to examine affordability conditions at different income percentiles for all active inventory on the market.

The Affordability Distribution Curve 3 examines how many listings are affordable to those in a particular income percentile. The Affordability Score 4 — varying between zero and two — is a calculation that is equal to twice the area below the Affordability Distribution Curve on a graph. A score of one or higher generally suggests a market where homes for sale are more affordable to households in proportion to their income distribution.

Lawrence Yun, NAR chief economist, says a top complaint Realtors® have been hearing from clients is a notable imbalance between what they can afford and what is listed for sale. “Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling and homebuilders have not boosted production enough to meet rising demand,” he said. “NAR and realtor.com®’s new affordability measure confirms that buyers aren’t exaggerating about the imbalance. Amidst higher home prices and now mortgage rates, households with lower incomes have been able to afford less of all homes on the market last year and so far in 2017.”

Reflecting a growing shortage of accessible inventory for most income groups, the entire Affordability Distribution Curve in January was below the equality line and the gap was generally wider at lower incomes, which indicates even tighter supply conditions. A household in the 35th percentile could afford 28 percent of all listings, a median income household (50th percentile) could afford 46 percent of listings and a household in the 75th percentile was able to afford 74 percent of active listings.

“Consistently strong job gains and a growing share of millennials entering their prime buying years is laying the foundation for robust buyer demand in 2017,” said Jonathan Smoke, chief economist at realtor.com®, a leading online real estate destination. “However, buyers with a lower maximum affordable price are seeing heavy competition for the fewer listings they can afford. At a time of higher borrowing costs, this situation could affect affordability even more as buyers battle for a smaller pool of homes and bid prices upward.”

Calculating last month’s Affordability Score — two times the area under the Affordability Distribution Curve — further highlights the disjointed rate of accessible supply on the market across the U.S. Swift price growth and higher mortgage rates caused January’s Affordability Score (0.92) to shrink nationally from a year ago (0.97) and also in many states. Only 19 states had a score above one (conditions that are more favorable) and a meager three — North Dakota, Alaska and Wyoming — saw year-over-year gains in their score.

“Heading into the beginning of the spring buying season, available supply is more reachable for aspiring buyers in the upper end of the market and specifically in nearly all Midwestern states,” said Smoke. “Meanwhile, many states in the West and South have seen deteriorating supply levels over the past year. Buyers in these areas should know that it may take longer to find the right home at a price they can afford.”

The states last month with the highest Affordability Score were Indiana (1.23), Ohio (1.22), Iowa (1.18), Kansas (1.17), and Michigan and Missouri (both at 1.14). The states with the lowest Affordability Score were Hawaii (0.52), California (0.60), District of Columbia (0.65), and Montana and Oregon (both at 0.67).

“This shortfall of inventory at a time of healthy job gains in most states is one of the biggest reasons for the depressed share of first-time buyers and the inability for the homeownership rate to rise above its near-record low,” added Yun. “The only prescription to reversing this adverse situation is to build more entry-level and mid-market housing that aligns with current household incomes.”

The new Realtors® Affordability Distribution Curve and Score was created to be a valuable resource for Realtors® and consumers to assess the affordability of markets in different income groups. The research may eventually include metro-level data and will be updated on an ongoing basis at https://www.nar.realtor/topics/realtors-affordability-distribution-curve-and-score.

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.

Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

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1Down payment percentages are determined from recently locked mortgages from Optimal Blue to determine the maximum affordable home price. The maximum affordable home price assumes that 30 percent of a purchaser’s income can go to pay for the financing, property tax, homeowner’s insurance costs, and a mortgage insurance premium if the down payment is less than 20 percent. Assumptions are made that homes are financed with a 30-year fixed-rate fully-amortizing mortgage at the prevailing mortgage rate. Mortgage rates are those advertised on realtor.com® during the period analyzed.

2Income distribution data is collected from Nielsen. Nielsen data is provided as numbers of households within income brackets, which are then calculated to find the percentile within, above, or below any bracket. See detailed methodology here: http://www.tetrad.com/pub/documents/popfactsmeth

3The Affordability Distribution Curve gathers income data for households in our desired market and constructs a maximum affordable house price for the income level using a down payment percentage determined from recently originated mortgages from Optimal Blue. Once a maximum affordable house price for a given income percentile is determined, active listings on realtor.com® are reviewed to see what percent of homes on the market are priced less than that maximum affordable house price.

4The Affordability Score is two times the area under the Affordability Distribution Curve. The score varies between zero and two. A score of zero will result when no household can afford any of the homes that are currently on the market. A score of two will result when all households can afford all of the homes that are currently on the market. A score of one generally suggests a market close to equality, in other words, homes on the market are affordable to households in proportion to their income distribution.

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Consumers and Realtors® Show Greater Interest in Smart Home Technologies, Certifications

WASHINGTON (November 30, 2016) — As smart homes become more popular among consumers, buyers and sellers are showing greater interest in those homes and smart-home technologies and Realtors® in a certification to acknowledge their experience and expertise in those features.

This is according to the National Association of Realtors®’ inaugural Smart Homes and Realtors® report, which found that Realtors® are becoming more interested in a smart home certification, despite the fact that only 15 percent of agents are receiving questions about smart home technology from their clients.

According to the report, which analyzed the importance of smart home technology to Realtors®, 42 percent of respondents stated they are interested in acquiring a smart home certification, while 22 percent are not interested and 36 percent were undecided.

“More homeowners are adopting smart-home technology and that will likely impact buyers’ purchase decisions in the future. While consumer interest in this trend is still developing, Realtors® are becoming well-versed in successfully marketing smart homes and their features, such as devices and appliances,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties, a division of his family real estate business.

Of the respondents who are interested in a smart home certification, 23 percent of agents have one-year experience or less, whereas 54 percent have more than 16 years of experience. There is greater interest in a smart home designation for agents over 55 years of age (47 percent), compared to agents 45 years or younger (30 percent).

In terms of smart home devices, 37 percent of Realtors® said clients find smart locks to be very important, followed by lights at 29 percent and thermostats at 26 percent. Forty-three percent said clients were neutral about the importance of voice control features and 38 percent for smart appliances and doorbells.

When it comes to the importance of smart home functions to their clients, 80 percent of Realtors® see security as very or somewhat important. Nearly half of Realtors® view privacy as a very important smart home function to their clients, while 30 percent see it as somewhat important. Four in ten Realtors® see both cost savings and energy savings to be very important to their clients and 38 percent see comfort to be a very important smart home function.

According to the report, slightly more than half of Realtors®’ clients were not familiar with what’s available for smart home technology. Nearly 40 percent of Realtors® discussed security and privacy issues with their clients followed by technology cost at 31 percent and interoperability at 6 percent.

Of the many types of smart home technologies available, 42 percent of Realtors® said clients were most interested in smart home devices, followed by whole home technology (22 percent) and smart home technology for specific rooms (13 percent); 41 percent of clients were not interested in any of these technologies.

“As smart home technologies evolve, it’s extremely important that our members are aware of what’s available and what advantages and challenges these devices provide,” said Mark Lesswing, chief technology officer at NAR. “The work we’re doing at NAR’s Center for Realtor® Technology is key to this understanding. This report helps us understand how our work is impacting our members.”

The mission of NAR’s Center for Realtor® Technology is to track emerging technologies that will affect real estate, educate its members, advocate for the proper use of technology, and innovate when there is a gap between what is needed and what is available.

In 2015, CRT established a lab to investigate smart home/internet of things devices, renewable energy, urban agriculture and building materials, as well as any other emerging technologies as they become evident. CRT is working with national laboratories, universities, government and non-governmental organizations, and vendors to help promote NAR as an agent for technology research and innovation. 

CRT plans to use this report to benchmark its efforts in educating members on smart home technology. The goal is to help Realtors® help their clients better understand the market and advocate for their proper and safe use of these products and devices.

To find out about other initiatives from NAR’s Center for Realtor® Technology CRT Labs, visit https://crtlabs.org/

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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Second Century Ventures Accepting Applications for 2017 REach Accelerator Class

CHICAGO (December 1, 2016) – Second Century Ventures, the National Association of Realtors®’ strategic investment arm, is accepting applications for its 2017 REach® accelerator class now through January 31, 2017 at www.narreach.com.

REach offers education, mentorship and exposure for technology companies to enter into the real estate market, advance their businesses and expand into adjacent markets such as insurance, mortgage and financial services. The program accepts organizations in later growth stages, not just early-stage companies.

The nine-month program provides a unique opportunity for technology companies to get intense exposure into real estate, a market that represents more than $1 trillion in revenue, consists of more than 100,000 small- and medium-sized businesses and generates more than $12.5 billion in annual advertising spend in the U.S.

The program has attracted technology startups of all types, ranging from big data and marketing automation to business productivity and lead generation companies. Previous REach classes included a company that raised $50 million before entering the program and another with a revenue run rate greater than $10 million, along with graduates from other accelerator programs – including Y Combinator – and those backed by prominent investors in the venture community, such as Andreessen Horowitz, Bessemer, Madrona and Maveron.

Benefits of participating in the REach program are abundant. Some include:

  • Mentorship from 300-plus real estate and technology thought leaders and executives from major real estate brands and brokerages, real estate technology companies and venture capitalists.  Participating organizations meet on average with 50-plus of these advisors for 30-minute one-on-one sessions throughout the program.
  • Access to NAR’s Insight Panel, a group of more than 5,000 real estate practitioners who provide feedback on user experience, product viability and pricing. This guidance has proven vital to many companies’ success.
  • Education on how to navigate the trillion-dollar real estate industry with the backing of the largest trade association and NAR’s $5 billion brand.

“By leveraging NAR’s network and brand, SCV aims to help REach accelerator companies better define their business and find their value in the real estate industry,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties, a division of his family real estate business. “REach also brings great benefits to NAR and its members because of the equity in and access to the latest and greatest technology and innovations that are helping change the face of our industry.”            

Companies that have participated in past REach classes show impressive results:

  • In aggregate, the companies have raised almost more than $60 million of follow-on financing
  • Revenue, customer and/or user growth rates from 50 percent to over 5,000 percent
  • Key partnerships with major companies, including Coldwell Banker, Keller Williams, RE/MAX, Century 21, Realty Executives, realtor.com® and Facebook

“Our participation in REach helped us grow from a nascent startup into a nationally recognized brand,” said Andrew Flachner, CEO and co-founder of RealScout, and a 2016 REach graduate. “The mentorship, connections and platform contributed towards 1,000 percent growth in customer accounts, as well as additional funding.”

The early application deadline is December 20, 2016. Companies selected early into the program are given the opportunity to kick-start their entry into the marketplace. The final deadline for applications is January 31, 2017. Companies will be selected by the end of February 2017, with the nine-month program kicking off at the end of March and running through November 2017.  For more information about REach or to submit an application, visit www.narreach.com.

Second Century Ventures (SCV) is an early-stage technology fund, backed by the National Association of Realtors®, which 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.

REach is a unique strategic accelerator created by Second Century Ventures, the investment arm of the National Association of Realtors®, which helps technology companies launch into the real estate vertical and its adjacent markets. REach is a 9-month program that provides education, mentorship and market exposure to help its portfolio companies access the trillion-dollar real estate market and leverage NAR’s strategic expertise. REach accepts fewer than a dozen companies each year to access one of the world’s largest industries. Learn more at www.narreach.com.

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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National Association of Realtors® Congratulates Dr. Ben Carson, Nominee for Secretary of Housing and Urban Development

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Challenges and Opportunities for Homeownership Take Center Stage at National Association of Realtors®, S&P Global Joint Event

WASHINGTON (December 6, 2016) — The homeownership rate in America continues to hover around a 50-year low, but experts gathered for an event in the Washington, D.C. offices of the National Association of Realtors® said today that there are real-world opportunities to turn that trend around.

“It’s tough out there right now for buyers, especially in many of the red-hot markets around the country where competition is the fiercest,” said National Association of Realtors® President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “Thankfully, we know there are ways to help consumers. Addressing the growing student loan burden, widening the credit box for strong buyers, building more homes that meet the demand of lower and middle-income buyers – these are among the many steps we can take to clear the pathway to homeownership.”

The event on housing and homeownership was headlined by Nobel Prize Winning economist Dr. Robert Shiller, who offered his take on the housing market’s history and possible future. He looked at trends in oil prices, building costs, and other factors that play a role in driving demand, but told the packed audience that public sentiment clearly plays its own role in driving the housing market.

Looking at the recovery since the Great Recession, Shiller said “it’s kind of obvious that home prices have been rising at a good clip… But it’s not because of building costs, population trends, or interests rates.” Instead, Shiller said “it’s the changing narrative and the stories that go along with it.”

To make his point, Dr. Shiller showed data on the expected average annual increase of recent homebuyers, from 2002 to 2016. He noted that in the run-up to the Great Recession, homebuyers expected an average annual increase in home values as high as 13 percent. Since then that expectation has fallen, changing the narrative of the housing market.

“That’s why I don’t think we’re in a bubble now,” Shiller said. “It’s not as it was in 2004.”

Following Dr. Shiller’s remarks, CNBC real estate correspondent Diana Olick moderated a panel of experts including NAR’s Chief Economist Lawrence Yun; Dr. Beth Ann Bovino, chief U.S. economist at SP Global; Dr. Susan Wachter, Albert Sussman Professor of Real Estate, Wharton School of Business; and Dr. John Weicher, Director, Center for Housing and Financial Markets, Hudson Institute.

The noted economists honed in on the homeownership rate and its importance to the broader economy. Yun in particular talked about challenges to homeownership including rising rents and student debt loads, noting that the difficulty in purchasing a home has led to a growing wealth inequality between generations.

“There is a tremendous wealth buildup among people who are 65 and older,” Yun said. “They have essentially paid off their mortgages.” For the younger generation, including those under 35 years of age, Yun said “they feel that they are being left out.” Yun added that while the pendulum swung too far towards loose underwriting before the Great Recession, it has since swung in the other direction, leading to what he described as “overly strict underwriting standards” that can put homeownership out of reach for even strong buyers in some circumstances.

On the question of whether the homeownership rate will rise, Bovino likewise noted that “we do expect to see some improvement, but it’s going to take some time. Rents are increasing and interest rates are low, so there is an interest in getting back into homeownership.”

NAR reported in November that the median existing-home price for all housing types in October was up 6.0 percent from the previous year, marking the 56th consecutive month of year-over-year gains. This finding coincided with a 4.3 percent year-over-year decline in inventory levels, a consistent challenge for buyers looking to purchase a home, particularly in competitive markets.

The audience also had the opportunity to hear from Congressmen Frank Lucas (R-Okla.) and Brad Sherman (D-Calif.), both Members of the House Financial Services Committee. In a panel moderated by Politico financial services reporter Lorraine Woellert, the Congressmen discussed the likelihood that significant reforms to tax policy may come before Congress in 2017, agreeing that eliminating the mortgage interest deduction would likely meet strong public opposition.

Brown thanked participants for their expertise, adding that as President of NAR he is committed to keeping housing at the front of the agenda.

“I’m pleased we could highlight these issues with today’s event and reiterate the importance of protecting and defending incentives for homeownership and real estate investment,” said Brown. “I look forward to continuing this good work throughout my tenure as president of NAR.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

SP Global is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. The Company’s divisions include SP Global Ratings, SP Global Market Intelligence, SP Dow Jones Indices and SP Global Platts. SP Global has approximately 20,000 employees in 31 countries. For more information, visit www.spglobal.com.

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2017 Realtor® Broker Summit to Feature Market Forecasts and Insights, Inspiring Keynotes

WASHINGTON (December 13, 2016)Real estate brokers understand the importance of learning best practices regarding management and entrepreneurial skills and gaining valuable real estate insights that can make their brokerages more successful. For this reason, the National Association of Realtors® is inviting brokers from across the country to attend the 2017 Realtor® Broker Summit in San Diego at the exclusive Fairmont Grand Del Mar resort.

This year, industry panel sessions, inspiring keynotes and economic and market forecasts are on the agenda as attendees meet to share insights and strategies to advance their brokerages.

Former Tesla, Apple and GAP Inc. executive George Blankenship will address attendees as the summit’s 2017 keynote speaker. Blankenship brings 30 years of experience in international strategy, retail and real estate. As vice president of real estate at Apple, he formulated and executed one of the most triumphant retail growth strategies in history and is widely recognized as the architect of Apple’s brand-building retail method. Blankenship will be speaking on business innovation and transforming companies from status quo market contenders to forward-thinking, dynamic companies of the future.

The second day of the summit will feature an exclusive interview with beach volleyball Olympic champion Kerri Walsh-Jennings. Walsh-Jennings, a five-time Olympian, will discuss her continued drive for success and setting new goals, overcoming obstacles, partnering with a former rival, and how success in sports translates to success in business.

“The Realtor® Broker Summits continue the ongoing dialogue with our broker members to ensure they have the insights they need to be effective in today’s market. The inspirational keynote speakers, market experts and valuable peer-to-peer networking opportunities provide a forum focused on timely issues and trends affecting brokers and their businesses,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties, a division of his family real estate business.

The 2017 summit will take place February 14-15, 2017. The event’s focus will also include legal and risk management, growth strategies, technology game changers, economic updates, crisis management and a bipartisan assessment of the new White House administration.   

Registration for the 2017 Realtor® Broker Summit is now open at www.nar.realtor/brokersummit

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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NAR Tech Edge Events Keep Realtors® Apprised of Latest Tools

WASHINGTON (February 14, 2017) — Technology is transforming how Realtors® conduct business and communicate with clients. Now more than ever, Realtors® know the importance of staying up-to-date with the new and emerging technologies that are essential to the real estate business. To help Realtors® stay well informed of the latest business technology skills and trends changing the real estate industry, the National Association of Realtors® is continuing its one-day technology conference series, NAR Tech Edge.

NAR Tech Edge events will take place in cities across the U.S. starting in early 2017. NAR speakers and local technology experts will present sessions on topics including mobile marketing, online reputation management, content strategy, Google and cloud computing, social media, the importance of photo and video and much more.

“NAR Tech Edge introduces Realtors® to the latest technology trends that can help grow their business and better serve their clients,” said President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “These one-day, high energy conferences are a wonderful opportunity for Realtors® who are eager to expand their understanding and use of the most current web-based and mobile technologies.”

According to the 2016 NAR Member Profile, technology remains an essential aspect of how Realtors® manage their business. Nearly nine in 10 members currently use a smartphone with wireless e-mail and Internet capabilities. More than two-thirds of all Realtors® reported having their own website, and 94 percent use email as their primary form of communication with clients.

Presenters and emcees for NAR Tech Edge’s 2017 tour include Realtor® Bill Lublin, CEO of the Social Media Marketing Institute and Century 21 Advantage Gold, who is a thought leader for his insights into technological tools and their real estate applications; NAR Director of Member Engagement Nobu Hata, an industry expert in technology, marketing and communications trends in the real estate industry; Amy Chorew, vice president of Learning at Better Homes Gardens Real Estate, a technology trend expert, author, social media maven and Realtor®; and Jeff Lobb, founder and CEO of SparkTank Media, an international real estate speaker, innovator and consultant, who will share how to best leverage and utilize today’s robust, cloud-based social media and marketing applications.

Following is the schedule for the 2017 NAR Tech Edge events:

  • March: Pembroke, Massachusetts
  • April: Billings, Montana and San Jose, California
  • May: Tulsa, Oklahoma
  • June: White Plains, New York
  • July: Tampa, Florida
  • September: Parsippany, New Jersey
  • October: Albuquerque, New Mexico
  • November: Baton Rouge, Louisiana

For more information and to register, visit www.nartechedge.com. Media and non-NAR members are welcome to attend.

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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Home Sales Expected to Expand Modestly in 2017 As Affordability Pressures Temper Buyer Enthusiasm

WASHINGTON (December 14, 2016) — Existing-home sales are forecast to muster only a small gain in 2017 because of increasing mortgage rates and shrinking consumer confidence that now is a good time to buy a home, according to new consumer survey findings and a 2017 housing forecast update from the National Association of Realtors®.

In NAR’s fourth quarter Housing Opportunities and Market Experience (HOME) survey 1, respondents were asked about their confidence in the U.S. economy and their housing expectations in 2017.

With the calendar turning to a new year in a couple weeks, the survey found that a majority of households believes now is a good time to buy a home. However, confidence has retreated by a considerable amount amongst renters. Fifty-seven percent of renters said now is a good time to buy, which is down from 60 percent in September and 68 percent a year ago. Seventy-eight percent of homeowners (unchanged from September; 82 percent in December 2015) think now is a good time to make a home purchase.

Lawrence Yun, NAR chief economist, says declining affordability in many parts of the country is behind the weakening morale. “Rents and home prices outpacing incomes and scant supply in the affordable price range has been a prominent headwind for many prospective buyers this year,” he said. “Making matters worse, the unwelcoming reality of higher mortgage rates since the election is likely further holding back confidence. Younger households, renters and those living in the costlier West region — where prices have soared in recent months — are the least optimistic about buying.”

Even with this year’s slow dip in buyer enthusiasm, existing-sales are still expected to close 2016 3.3 percent higher than 2015 and reach around 5.42 million — the best year since 2006 (6.47 million). In 2017, sales are forecast to grow roughly 2 percent to around 5.52 million. The national median existing-home price is expected to rise to around 5 percent this year and 4 percent in 2017. By the end of next year, mortgage rates are expected to reach around 4.6 percent, and the Federal Reserve is expected to raise the Fed funds rate a few more times to 1.25 percent.

“Although the economy is expected to continue to expand with around 2 million net new job creations, existing home sales are expected to see little expansion next year because of affordability tensions from rising mortgage rates and prices continuing to outpace income growth,” said Yun.

Despite these headwinds, Yun is hopeful that the continued job growth, any economic stimulus from the new administration and more millennials reaching their prime buying years will keep demand for the most part on solid footing. The key will ultimately come down to what the housing market desperately needs: more inventory. However, more expensive mortgage rates could also slow the pace of homeowners listing their home for sale.   

“Some would-be sellers may be reluctant to move up or trade down — especially if they’ve refinanced in recent years,” said Yun. “That’s why it’s extremely necessary for homebuilders to step-up their production of homes catered to buyers in the affordable price range. Otherwise the nation’s low homeownership rate will struggle to shift higher in 2017.”

NAR President William E. Brown, a Realtor® from Alamo, California, says buyers searching for available homes in a tight market next year can get ahead by working with a Realtor® who’s very familiar with the buyers’ targeted area. “A Realtor® will have their pulse on current market conditions and can ensure a buyer is only searching for and making offers on a home that fits within the budget.”

Brighter enthusiasm about the direction of the economy, personal financial outlook mostly unchanged

This quarter’s survey found that another full year of robust job gains and lower unemployment is finally translating into stronger confidence about the economy. The share of households believing the economy is improving has increased quite a bit (to 54 percent) since the third quarter (48 percent), and is currently at its highest share since the survey’s debut a year ago. The most optimistic about the economy are those under the age of 44, living in urban areas and with higher incomes.  

The HOME survey’s monthly Personal Financial Outlook Index, 2 showing respondents’ confidence that their financial situation will be better in six months, has picked up a tad (to 59.8 in December) since September (58.6) and is mostly in line with the sentiment from respondents a year ago (59.6). In 2016, the index was its highest in May (61.1).  

Roughly two-thirds think it’s a good time to sell, most expect prices to hold steady or increase

With price growth holding steady in most of the country since the summer, roughly the same amount of homeowners (62 percent) believe it is a good time to sell compared to the third quarter of this year (63 percent). As has been the case all year, respondents in the West continue to be the most likely to think now is a good time to sell, while also being the least likely to think it’s a good time to buy.

Mirroring current conditions in most markets and unchanged from last quarter, nearly all of those surveyed (91 percent) believe that prices will stay the same or rise in their community in the next six months. Respondents living in suburban areas, renters and those from the West are most likely to believe prices will go up in their communities.

About NAR’s HOME survey

In October through early December 2016, a sample of U.S. households was surveyed via random-digit dial, including half via cell phones and the other half via land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,776 household responses are represented.

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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1 NAR’s Housing Opportunities and Market Experience (HOME) survey tracks topical real estate trends, including current renters and homeowners’ views and aspirations regarding homeownership, whether or not it’s a good time to buy or sell a home, and expectations and experiences in the mortgage market. New questions are added to the survey each quarter to reflect timely topics impacting real estate.

HOME survey data is collected on a monthly basis and will be reported each quarter. New questions will be added to the survey each quarter to reflect timely topics impacting the real estate marketplace. The next release is scheduled for Wednesday, March 15, 2017 at 10:00 a.m. ET.

2 Index ranges between 0 and 100: 0 = all respondents believe their personal financial situation will be worse in 6 months; 50 = all respondents believe their personal financial situation will be about the same in 6 months; 100 = all respondents believe their personal situation will be better in 6 months.

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