Blog will be updated as events happen.
On Saturday at 8:30 a.m., President Ron Phipps called the 2011 Board of Directors meeting to order. Richard Mendenhall emotionally recognized the veterans saying, “I’ve been waiting ten years to do this.”
A special REALTOR® ensemble performed a choral version of The National Anthem.
The nominating committee put forth the following slate of officers for 2012:
- Treasurer, Bill Armstrong (Maryland)
- President-Elect, Gary Thomas (California)
- First President, Steve Brown (Ohio)
- President, Mo Veissi (Florida)
Regional Vice Presidents, committee liaisons and special committee chairs were also announced.
The REALTOR® Party Political Survival Initiative (RPPSI) was introduced by President Phipps and then the floor was opened for discussion. The RPPSI was voted and a passed by the board with discussion migrating into how to fund the initiative. On behalf the executive committee, Phipps proposed a $40 dues increase to fund the Initiative. The funding plan passed. The floor was open for discussion with the only comment being a statement about the name not using the term “survival.”
States making their RPAC goals so far in 2011 include
- New Mexico
- Rhode Island
- West Virginia
- North Dakota
Goals met with President’s Circle:
- South Dakota
Jim Helsel reported that RPAC major donors are up 154 over 2011. President’s Circle is up from 413 to 500. Seventy-two new Hall of Fame members were in inducted in 2011.
79th DSA Award Recipient
Adorna Caroll (Berlin, CT)
80th DSA Award Recipient
Peggy Ann McConnochie (Juneau, AK)
One of the liveliest conversations and debates centered around the MLS and IDX data. I would encourage you to follow the #midyear Twitter hashtag for up-to-date information from the floor.
Robert Freedman, REALTOR® Magazine
Sales and leasing volumes in commercial real estate have turned a corner and are heading up, but because the past few years have been so difficult, the upturn barely feels like one. However, the sector is expected to strengthen more over the next couple of years, NAR Chief Economist Lawrence Yun told commercial real estate practitioners on Thursday at the 2011 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington.
Financing remains a major stumbling block, with little commercial mortgage backed security activity happening, but banks — particularly regional banks — are stepping in with portfolio loans, said Yun.
That’s a bit surprising, because the big-four national banks — Wells Fargo, Citibank, Chase, and Bank of America — are in a far better position to make loans. Not only are they sitting on piles of money, but because they’ve grown to the point where they’re too big to fail, they have a de facto implicit federal guarantee, Yun said.
A big concern looming is inflation. It remains low, about 2.9 percent (excluding energy and other volatile components to the economy), but inflation could rise and hit 5 percent by the end of the year and 6 percent in the early part of 2012, Yun predicted. If that happens, interest rate costs would also rise. For the federal government, a 2 percent increase in rates could wipe out a lot of any deficit reduction steps the government might take between now and the end of the year, because in some analyses, that could translate into $2 trillion in increased debt service payments for the government.
In the individual commercial sectors, multifamily housing has been the standout over the last year. Vacancies hit historically normal levels last year at about 5-6 percent with solid rental rate growth. Look for 4 percent higher rents nationally by the end of this year. That figure could be considerably higher in some first-tier markets like Washington, D.C., where rental rates have been rising at almost a double-digit clip.
Those gains might ease in the next year or two, though, as residential home sales improve. The high rental rate increases could tip the scale for some renters to consider home ownership. Yun has said on other occasions that almost 40 percent of the renter population today has the financial ability to become home owners, but for now are choosing to rent.
In the office market, vacancy rates are expected to decline steadily, from 16.5 percent in the first quarter of this year to 16 percent at the end of the year. Rental rate increases could turn positive for the first time in a while, too, to maybe 5 percent from a negative 2 percent. Offices are benefitting from recent job gains in professional service-type jobs like accountants and lawyers.
Among markets tracked by NAR, New York City has the lowest vacancy rate at a little over 8 percent. Washington, D.C., with its federal government-fueled activity, also has a relatively low vacancy rate. Pittsburgh, which has been steadily transitioning from an industrial city to a high-tech and professional services city, is among the metros with relatively strong office trends.
Industrial markets are also expected to improve, with vacancy rates projected to decline from 14.2 percent to about 12.9 percent at the end of the year. Yun is predicting positive rental rate growth of about 2 percent this year. Los Angeles, with its big Asia import-export trade, has the lowest vacancies at 7.5 percent.
Retail markets continue to struggle, with consumers still retrenching in their spending. In the long run, increased savings by consumers is good, because it boosts household financial stability, Yun said, but in the short term retail properties are getting little relief. Vacancy rates are only expected to improve marginally, from about 13 percent to just slightly better by the end of the year. Even so, the sector might see some improvement in rental rate growth, moving from a negative 1 percent to 1 percent in positive territory by the end of the year. San Francisco is in the best shape among major metro areas with a vacancy rate of about 6.7 percent.
You might not “feel the impact of the recovery,” Yun said. “The hole was so deep, it might still feel like we’re in a hole.”
Wendy Cole, REALTOR® Magazine
In a change to the National Association of REALTORS® Internet Data Exchange, or IDX, policy that went into effect in January, franchisors gained the right to display listing data from their franchisees’ IDX feeds on their national Web sites. Now, that move has some large brokerage organizations upset. They say the change effectively gives their listing information to non-participants without their consent.
Following a passionate debate at the REALTORS® Midyear Legislative Meetings Thursday, the Multiple Listing Issues and Policies Committee recommended suspension of the four month–old policy until several concerns can be addressed. The committee’s recommendation will come before NAR’s board of directors for a vote this Saturday, May 14.
Opponents to the policy, including Joe Horning, president of Shorewest, REALTORS®, in Brookfield, Wis., had called for a recommendation to rescind the policy altogether. “The data is curated by us and has legal liability attached to it,” said Horning, chairman of the Realty Alliance. “Brokers who choose to give their data to Zillow make that choice. It’s a broker’s choice. In this case we weren’t given the right to opt in.”
With the suspension, any public Web site operated by franchisors can no longer display their franchisees’ IDX feeds until the issue is resolved.
Speaking in support of franchisor display was Mike Brodie, former NAR treasurer and a major broker-owner with Keller Williams Realty International. Brodie said the IDX feeds offer “an opportunity to meet consumer expectations. That information should not be limited to third-party aggregators.”
If the NAR Board approves the committee’s recommendations on Saturday, the MLS committee will consider clarifications and enhancements to the policy including participant opt-out, a broadening of the policy to include real estate networks and other entities, and clearer information about what information can be displayed to ensure compliance with real estate law and regulations.
At Thursday’s meeting, the committee also discussed a proposed amendment to give MLS participants the option to display of other participants’ listings via social media sites, RSS subscriptions, and applications for mobile devices.
The discussion led to an animated debate about the appropriateness of attaching social media policies to IDX policy. Some attendees said a separate set of rules addressing social media and RSS feeds was necessary. In a close vote, the committee agreed to refer the proposed amendment back to a work group for further review.
Brian Summerfield, REALTOR Magazine
Although the 2,314-page Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law last year doesn’t affect real estate brokers and agents as much as, say, mortgage originators, it does have some significant implications for the industry, said Phillip Schulman, a partner at the Washington, D.C. law firm K&L Gates LLP.
In his remarks at the Real Estate Services Forum Thursday during the REALTORS® Midyear Legislative Meetings, Schulman told attendees that the mortgage lending sector was targeted by many of the bill’s provisions.
“[Dodd-Frank] came down hard on loan officers and mortgage brokers. Why? Because they were the ones working with the borrowers,” said Schulman, adding that in the future all originators will be qualified, licensed, and registered, as well as issued a unique identifier.
“Anytime there’s a violation committed by a loan officer, it’s going to be reported in a nationwide system,” he said.
The bill also affects the financial sector, particularly in terms of the structure of securities, which are debts or equities that are packaged for investment. To avoid the financial fraud of the previous decade, Dodd-Frank requires financial companies that create securities to hold a minimum 5 percent stake in them — the exception being securities that are composed of qualified residential mortgages (QRM).
Current QRM requirements for borrowers include no option adjustable-rate mortgages (ARMs), no bankruptcy in the past three years, no prior short sale or foreclosure, and points and fees charged by the lender totaling less than 3 percent of the loan’s value. Furthermore, lenders and regulators have recently recommended implementing a higher minimum down payment.
The increasingly stringent requirements pose a serious challenge to a viable housing market, Schulman noted.
“The eligible loan is shrinking and shrinking, and it’s going to be harder for someone who has any dents or scratches in their credit to get a loan,” he said. “It’s all well and good to get the riff-raff out of the business and get rid of these exotic, fly-by-night financial products, but let’s not throw the baby out with the bath water.
“We just came through a decade of this laissez-faire attitude. The atmosphere was one of easy money. We put millions of Americans in homes who probably should not have been there. Today, Washington is all about risk management. Congress and regulators stepped in and were asked to regulate. So they did what they always do. They overregulated. I think until we earn back the trust of the Congress and the regulators and even the American people, we’re going to continue to be scrutinized like never before.”
Here are a few other important, real estate-related changes brought about by the bill:
Bureau of Consumer Financial Protection: this new behemoth regulatory agency — which Jay N. Varon, Schulman’s fellow speaker and a litigation partner with law firm Foley & Lardner LLP, characterized as the “centerpiece” of Dodd-Frank — will officially launch on July 21. This organization will encompass a half-dozen current regulatory agencies and 18 consumer statutes, including RESPA. It will also have what Varon called “nuclear” penalties, meaning punishments for violations will be much more stringent than they are now.
Prohibitions on steering and loan-officer compensation: Dodd-Frank changed the compensation model for loan officers to prevent them from steering consumers into loans that may not be right for them, yet profitable for the lending company. According to Schulman, loan officers will collect the same sum per loan, whether it’s a 30-year fixed mortgage or an option ARM. Still, he said this new arrangement isn’t entirely fool-proof. “Businessmen figure out a way to make every system work. Sure, they’ll pay them 50 basis points for loans of all kinds. But they can also pay them bonuses based on total volume,” he explained.
Appraisals and AMCs: New regulations in Dodd-Frank are designed to protect appraiser independence, Schulman said. These rules also sunset the Home Valuation Code of Conduct (HVCC), which caused a great deal of consternation among real estate professionals who say it contributed to the collapse of deals after it was enacted in 2009.
Another Midyear Meeting may be coming to a close, but that just means it’s time to start gearing up for the 2011 REALTORS® Conference & Expo, taking place November 11-14 in Anaheim, California.
This year’s conference theme is SEIZE THE DAY, and indeed, this year’s Conference & Expo will help REALTORS® make the most of the current market, and gain a competitive edge over the competition.
18,000 members and guests are expected to attend this year’s event. Remember, it takes only one referral to pay for the REALTORS® Conference & Expo!
Registration is now open. Register before August 15 to take advantage of the early bird rate.
Questions? Contact convinfo@REALTORS.org.
We hope to see you in Anaheim!
By Nobu Hata, REALTOR(R), e-PRO(R), SFR
There’s less than 24 hours until the Executive Board decides the fate of what has become one of the most polarizing issues ever to hit NAR in recent memory, the REALTOR Political Survival Initiative.
Regardless of your stance, your perspective of the situation, and your view of politics within our industry, let’s all learn from this.
Advocacy has a whole new meaning for me. Politics is something we’ll all need a working knowledge of; from the agent on the street, to the CEO in the broker board room. The need for a clear and concise value proposition of our industry – as advocates for our consumers and from NAR to us, as REALTORS – is needed. And in an economy where we can ill-afford to give up $40 for our bills, much less for an initiative some know nothing about, we need to see value in the sacrifice.
But you know what? We’ll all get there together. We are an industry built on 100 years of tradition and service, and the value of the REALTOR as an advocate for home ownership is alive and well. We have seen the ups and downs of the economy and a myriad of attacks on our buyers and sellers. The internet was supposed to destroy us, remember? After all this, we’re still here.
If anything, what this initiative has shown are the small imperfections of us as an industry that we need to address. Seek the truth from the members involved, get involved with conversation first-hand, and lets work together to fix these blemishes – especially at the local association level.
What has been said online and in-person has bruised many an ego and hurt many feelings. So are we cool? I am if you are!
Friday morning kicked off with an amazing Marketing Forum entitled “High-Impact, Low-Cost Marketing Tools You Need Now!” Adorna Carroll (Connecticut), Nobu Hata (Edina, MN), Amanda DiVito Parla (Arvada, CO) and Bill Lublin (Philadelphia, PA) shared several tips and best practices.
- The market is tough. If your statistics in your market place aren’t great, don’t sugarcoat the message. It could destroy your credibility.
- Not a blogger? Sure you are. Remember every time you send a message out on Facebook in public, you are doing a form of blogging. You should be blogging.
- If you are on RPR (REALTOR® Property Resource) make sure you are using the reporting function.
- Use the free stuff first, and then figure out what’s worth paying for.
- Have a marketing plan and stick to it.
- Think macro, act micro.
- Mail your clients at least six times a year. Don’t be afraid to pick up the phone.
- If you’re using social media for marketing have a plan and measurable objectives.
- Don’t miss NAR’s Research Reports. Profile of Home Buyers and Sellers, Member Profile, Investors and Vacation Home Buyers Survey.
- Make you report what you know, not what you feel.
- Use the Facebook Business Page.
- Use ToolkitCMA.com.
- Brochure boards to replace the flier box.
- Consumers want REALTORS® who use video!
Gotta say I love the special REALTOR lapel pins made for this conference: (a) for Veterans – denoting specific branch of service; and (b) for military families – Gold Star Parents (lost a child in service), Blue Star Families (family members in active duty), and Silver Star Families (wounded, ill and injured veterans.)
Today I was able to say thanks to one of my own members wearing the Navy Veteran pin; and a NAR vice president wearing a Blue Star Families pin as his son is active duty in the Marines. The pins are a great way to be able to recognize that service.
Katherine Tarbox, REALTOR® Magazine
With social media and mobile phones advancing, technology is allowing practitioners to connect with more consumers, send files faster, and ultimately, do more business.
At the Professional Development Forum at the REALTORS® Midyear Legislative Meetings, technology expert Amy Chorew of TheTechByte.com urged practitioners to consider incorporating these strategies into their business models.
1. Market through social media. A popular NAR study says that 87 percent of home buyers begin their search online, but Chorew says that more will probably start at social media sites. “Permission-based marketing such as Facebook or Twitter allows the customers listen or read messages because they are interested in the content of the message,” she explained. She cautions practitioners to be careful with the content they create for social media and how they use the Like and Share functions. However, when used effectively, she says this is all the marketing one may need to do.
2. Work in the cloud. Real estate pros often have to exchange large files between colleagues and clients. Cloud computing allows you to store those files online. These files may be later accessed online from your smart phone, desktop or wherever you are. Chorew recommends Dropbox.com, Google Docs, or Box.net, which syncs with DocuSign, an e-signature company.
3. Make your site mobile. Five years ago, Web site developers were concerned with making sure that their pages looked good all browsers. Today, Web hosts need to make sure their site is navigable on all mobile devices. “People expect to be able to pull up a site from any device and have it look good.” Chorew recommends that practitioners make it a priority to develop their sites for mobile devices.
4. Go viral with video. As more smartphones come built in with video cameras, Chorew says you can expect to see more video on real estate sites, since it can show more of the property. She recommends trying out the video functions on your digital camera before investing in a video camera and always recording with a small tripod.