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Posted on May 13 at 02:53 PM | Permanent Link

By Robert Freedman, senior editor, REALTOR® Magazine

Probably nothing is more important from a home sale standpoint than prices shoring up. That's how I interpret data NAR plans to release next week at NAR's 2009 Midyear Meetings & Trade Expo in Washington. NAR researchers are putting the finishing touches on the 2009 Member Profile, an 80-page report that looks at how much REALTORS® are earning, how many transactions they're closing, where their business is coming from, and so on. One set of data that jumped out at me is based on a question that wasn't asked in previous studies: what's the biggest roadblock to getting transactions closed. I expected the answer to be the difficulty households face in getting financing. That is in fact a major reason: 24 percent said that's the biggest problem. But 35 percent said the biggest problem is households' expectations that home prices will fall further, so they're waiting. What's clear, then, is that prices must stabilize and even start heading back up before households stop waiting and get back into the market. Other reasons transactions aren't getting to closing, according to the data, is low consumer confidence and concern about losing one's job.

As you would expect, the study shows that the market was pretty tough in 2008. REALTORS®' median sales volume for the year was only $1.2 million, down 37 percent from 2006, when it was almost $2 million. The drop in volume on a percentage basis was actually steeper for the most experienced practitioners. Those with 16 years or more in the business saw their volume drop 42 percent, to $1.5 million from $2.6 million. That suggests that the market slowdown has had an equal-opportunity dampening effect on sales.

Maybe it's because the market has been a tough ride that the share of REALTORS® who've only been in the business a year or two is dropping. In 2006, just before the downturn hit, 13 percent of practitioners had been in the business a year or less, and 10 percent had been in it two years or less. Compare that to last year: only 7 percent have been in a year or less and only 6 percent have been in two years or less. That suggests fewer people have been entering the profession, and, as a result, among those that have remained, the overall experience level has risen.

Looking ahead, more practitioners say they're not certain they're going to stay in the business. Predictably, the more they made, the more they expect to continue on. Of those who made $10,000 or less last year, 13 percent say they don't know whether they'll continue on. Those who made around $30,000 or less, 12 percent say they don't know. Both of these figures are up from 2007, suggesting an increased pessimism among low earners than before. By contrast, among those who earned $150,000 or more last year, only 2 percent said they weren't sure if they'd stay in the business.

What's clear is that, going forward, online social networking among those who stay in the business is going to become more prominent. We can't compare how things are trending because this is the first year NAR asked the question, but 71 percent of those 29 or younger use social networking sites in their business. These are sites like Facebook, Twitter, and LinkedIn. Only 19 percent of practitioners 60 or up have started using the sites. Overall, 14 percent who aren't using social networking sites said they plan to.

Meanwhile, despite the growth of foreclosures and short sales, those types of transaction remain a relative rarity among the bulk of practitioners. Almost two-thirds said they did no foreclosures last year and 72 percent said they did no short sales. Thirty-two percent said they did 1-5 foreclosures, and 26 percent said they did 1-5 short sales. Only a fraction said they did 11 or more of either type of transaction.

NAR will be releasing findings from the report next week. We'll be reporting on it at our Daily News site, which you can find on the home page of REALTOR® Magazine Online at REALTOR.org/realtormag.

Posted on May 8 at 11:03 AM | Permanent Link | Add a Comment (0)

By Robert Freedman, senior editor, REALTOR® Magazine

One of REALTORS®' priorities going into the NAR Midyear Legislative Meetings & Trade Expo in Washington next week will be a little provision in a very large bill. This is Sec. 204 of the American Clean Energy and Security Act of 2009, a 648-page bill that covers everything from cap-and-trade climate rules to green jobs. Sec. 204 would require the energy-efficiency labeling of homes, apartments, and commercial buildings and is a classic example of a well-intentioned effort that could hurt millions of home owners. Although the details of how the labeling would work have yet to be released, a protocol for measuring home energy efficiency would be written. Based on that protocol, the efficiency of a house would have to be measured and then disclosed at a sale, among other times. In effect, each house would be labeled based on its energy efficiency.

Clearly this could have a severe dampening effect on sales involving existing homes, particularly older existing homes. And such a requirement couldn't come at a worse time.

NAR has sent out a limited Call For Action on the issue. Right now it's just targeting members of Congress who sit on the committee that's working on the bill, so only a portion of NAR's membership has been asked to write to their members specifically on this issue.

In its communication on the topic, NAR makes a pretty clear-headed point that there are many ways to get at the goal of improving the energy efficiency of our country's housing stock. Among them is to give owners reasonable incentives to make energy-efficiency improvements. As it is, Rep. Peter Welch (D-Vt.) has a stand-alone bill, H.R. 1778, that would do just that, and NAR is making the case that this is an approach worth supporting.

Looking ahead, with climate change and other environmental issues on Congress' agenda, we can expect more efforts by lawmakers to advance proposals that might appear small-scale on the surface but that could have enormous impacts on markets. That's why it's crucial REALTORS® stay engaged in what's going on. You're the ones who know what the impact a proposal could have on markets.

Posted on May 5 at 09:55 AM | Permanent Link | Add a Comment (0)

Brian Summerfield, Online Editor, REALTOR® Magazine

Tips on how to buy, sell, and negotiate—plus Bank of America dropping the Countrywide brand—dominated the Daily News last week:

Continue reading "The Fab 5 for the Week of 4/27/2009" »

Posted on May 4 at 09:59 AM | Permanent Link | Add a Comment (0)

By Robert Freedman, Senior Editor, REALTOR ® Magazine

As a reporter in Washington covering housing in one form or another since 1988, I've had a great perch from which to watch our federal housing secretaries in action, and I can say without hesitation one of the most transformative was Jack Kemp, who passed away on Saturday.

The former long-time congressman from Buffalo, N.Y., and an all-star quarterback of the Bills, brought his trademark enthusiasm, optimism, and ebullience to what was a very hot seat when he became secretary of the U.S. Department of Housing and Urban Development in 1988, during the first President Bush's term. At the time, HUD was rocked in an influence-peddling scandal in what's known as the Sec. 8 "mod rehab" program. If the program doesn't sound familiar (it provided subsidies to help finance rehab of private affordable rental housing), it's because Kemp shut it down when he came on board because of problems in how some funds were awarded.

What was impressive about Kemp, regardless of where you stand on the political spectrum, was his ability to address HUD's problems at the time decisively and then move on to a positive agenda of promoting homeownership for those for whom it made sense. Among his critics were some rental housing providers who felt he put too much emphasis on homeownership, yet during his term he led the creation of a major program for replacing obsolete public rental housing with housing that incorporated new lessons on what makes for good housing.

Naturally even this effort had detractors. Among other things, the new housing couldn't be built quickly enough to replace the old housing, so some in the industry would have preferred he focus on fixing up the old housing, despite it flaws.

There was a lot of debate back and forth, out of which grew new programs after Kemp had left. The HOME Investment Partnerships program was one of them; it provides block grants to states and localities to use with low-income housing tax credits and other programs to create new affordable housing.

It's remarkable the number of major programs that were created when Kemp was secretary and also immediately afterward, when former San Antonio Mayor Henry Cisneros was HUD secretary. Kemp was a low-tax, supply-side enthusiast who was passionate about weeding our housing discrimination and creating opportunity for all. Whatever you think of his political philosophy, he was a secretary who understood the importance of housing and the primacy of private property rights and the entrepreneurial spirit that drives innovation.

Posted on May 4 at 08:37 AM | Permanent Link | Add a Comment (0)

By Stacey Moncrieff, editor in chief, REALTOR® magazine

To everyone who tried to participate in today's Webinar, "Building Your Business with the Improved First-Time Home Buyer Tax Credit," and were unable to hear the speakers or even get on to the call, please accept my deep apology. Hundreds, if not thousands, of people could not get on to the call, including two of our speakers.

The explanation we received is that participants are supposed to listen via their computer. However, we offered a call-in option, and we well exceeded the 500-person capacity for call-ins. Ironically, we have been well over 500 registrants for several weeks and were unaware of the capacity issue.

When we realized we weren't going to be able to fix the problem, rather than trying to go on without our lead speaker, we ended the Webinar. So this week we are going to record the entire Webinar off-line and send it via e-mail to all 5,600 registrants. When you receive the Webinar link, you'll be able to hit a "Playback" button and listen in and watch the PowerPoint slides just as if you were participating live. The only difference is that you won't be able to ask questions during the session. However, if you have questions as you watch, you can e-mail them to me at smoncrieff@realtors.org. Our experts will make every effort to answer your questions.

Again, I apologize for what happened with today's Webinar. We will iron out the capacity problem before our next Webinar, May 28, the second part of our short-sales presentation, with expert Scott Thompson of Mortgage Resolution Services.

Posted on April 28 at 05:00 PM | Permanent Link | Add a Comment (1)

By Stacey Moncrieff, editor in chief, REALTOR® magazine

There's a new book out by Robert J. Shiller. Yes, that Robert J. Shiller, the Yale professor who took so much heat from NAR for predicting a bad end to the real estate boom. He's also the economist who coined the phrase irrational exuberance to characterize the stock market back in the overheated late 1990s.

The book, written with U.C. Berkeley Nobel Laureate George A. Akerlof, revives John Keynes' theories on the role of human behavior in the economy, according to Lewis Uchitelle, writing for the New York Times Sunday Book Review.

In Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, Shiller and Akerlof say human impulse makes it impossible for unregulated markets to avoid boom and bust cycles. This new book is sure to create further angst in the housing industry; the authors call mortgage-backed securities "a modern form of snake oil," according to Uchitelle. But this new work from two respected economists — Akerlof is a 2001 Nobel Prize winner and Shiller is codeveloper of Standard & Poor's Case-Shiller Home Price Indices — is worth a careful read.

For another perspective, here's an interview with Akerlof from The Atlantic.

Posted on April 20 at 05:20 PM | Permanent Link | Add a Comment (0)

Brian Summerfield, Online Editor, REALTOR® Magazine

Foreclosure news and the Feds to the rescue -- these stories and more were part of the top five Daily News items last week:

Continue reading "Top Five Stories for the Week of 4/13/2009" »

Posted on April 20 at 09:26 AM | Permanent Link | Add a Comment (0)

by Stacey Moncrieff, editor in chief, REALTOR® Magazine

I received some pointed letters from readers in the past couple of week about my REALTOR® magazine column on the business woes of print publications. (I was writing about our decision to reduce REALTOR® magazine to 10 print issues, while maintaining a steady stream of online exclusive content.) The letter writers said, in effect, that they'd been under the thumb of newspapers and their high advertising rates long enough—and too bad for newspapers if the Internet left them weak and vulnerable.

Fair enough. I wasn't really lamenting the loss of the physical product, which is costly to produce and distribute (though I still receive and read two daily newspapers and several magazines.)

But how much do we Americans value the work of the "fourth estate"? And if journalism can't be supported with its current advertising model, then how will it be supported? Or what will replace it? These may or may not be questions that directly impact your real estate business—but they certainly impact every news organization and professional association operating today.

There were a couple of interesting stories in The New York Times this week that attempted to answer those questions.

Continue reading "Future of REALTOR® magazine: What Are Your Thoughts?" »

Posted on April 16 at 12:54 AM | Permanent Link | Add a Comment (11)

Brian Summerfield, Online Editor, REALTOR® Magazine

A relatively positive week: Top stories included the happiest states in the U.S. and signs of economic recovery. Here are the five most popular items from last week's daily newsletters:

Continue reading "Top 5 Daily News Stories Last Week" »

Posted on April 13 at 10:40 AM | Permanent Link | Add a Comment (1)