Realtors Relief Foundation Celebrates 20th Anniversary

By Kerry Smith

Realtors, through RRF, help restore communities after natural disasters, such as hurricanes and wildfires. RRF celebrates 20 years this Fri. with a special livestream event.

WASHINGTON – “What can we do to help rebuild communities?” leaders at the National Association of Realtors® (NAR) asked following the tragic events of 9/11. The answer became the Realtors® Relief Foundation (RRF), a charitable organization that provides housing-related assistance to victims of disasters.

Twenty years later, RRF continues to restore and rebuild communities affected by disasters such as wildfires, hurricanes, earthquakes and tornadoes. It’s supported by the generosity of individual Realtors, Realtor associations and affiliated organizations. RRF has helped over 17,000 families remain in their homes.

On Friday, Sept. 10, at 12 P.M. Eastern time, NAR President Charlie Oppler is hosting a special commemorative event, called “Hope Rising” to honor the occasion. It’s dedicated to the Realtors who have helped RRF “continue to aid those in need during times of crisis.”

“The 20th Anniversary Campaign got off to an electric start this year due to the enthusiasm and commitment of state and local associations,” says Michael Ford, president of the Realtors Relief Foundation. “We are ecstatic to share $6.9 million has been raised to date from Realtors, state and local associations, and industry.”

All donations go directly to RRF and will be used to provide housing-related financial support to victims of disasters. For more information about the Foundation, visit NAR’s Realtors Relief Foundation webpage.

Also see: Florida Realtors Donates $500K to NAR’s Realtor Relief Foundation.

© 2021 Florida Realtors®

NAR: Pending Home Sales Drop 1.8% in July

Year-to-year contract signings declined 8.5%. NAR Chief Economist Lawrence Yun says the market may be cooling a bit, but there’s still not enough supply to match demand – yet “inventory is slowly increasing” and buyers should “see more options in the coming months.”

By Kerry Smith

WASHINGTON – Pending home sales dipped modestly in July for two consecutive months of declines, according to the National Association of Realtors® (NAR). Only the West region registered a month-over-month gain in contract activity; the other three U.S. regions in the study saw drops. Year-to-year, all four regions decreased.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – declined 1.8% to 110.7 in July. Year-over-year, signings fell 8.5%. An index of 100 is equal to the level of contract activity in 2001.

“The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers,” says Lawrence Yun, NAR’s chief economist.

“That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months,” Yun adds. “Homes listed for sale are still garnering great interest, but the multiple, frenzied offers – sometimes double-digit bids on one property – have dissipated in most regions.” However, “even in a somewhat calmer market, a number of potential buyers are still choosing to waive appraisals and inspections.”

As of July, 27% of buyers bypassed appraisal and inspection contingencies, in most cases to accelerate the homebuying process, Yun says.

July pending home sales regional breakdown: Month-over-month, the Northeast PHSI fell 6.6% to 92.0 in July, a 16.9% decrease from a year ago. In the Midwest, the index dropped 3.3% to 104.6 last month, down 8.5% from July 2020.

Pending home sales transactions in the South declined 0.9% to an index of 130.9 in July, down 6.7% from July 2020. The index in the West rose 1.9% in July to 99.8, but it’s still down 5.7% year-to-year.

© 2021 Florida Realtors®

Lumber Prices Plummet – But Other Building Costs Soar

The all-time high cost of $1,700 for a thousand board feet has dropped to $500, but steel products are up 10.8% and gypsum (for drywall) is up almost 16% this year.

NEW YORK – Doug Yearley, CEO of the luxury home builder Toll Brothers, told CNBC that a recent drop in lumber prices promped some significant savings on home building costs – but homebuyers shouldn’t expect to see those savings. While lumber prices are falling, other material costs are surging.

Lumber prices reached a record high of more than $1,700 per thousand board feet in May. But on Wednesday, it averaged about $500. Yearley says that translates to about a $40,000 savings in building a home.

But steel mill product prices increased 10.8% in July following a 6.2% increase in June, the National Association of Home Builders reports. It blames tariffs on steel imports for adding to building costs. Also, prices for gypsum products, which are used for drywall, rose 2.5% in July and are up nearly 16% in 2021. Copper has also been in short supply.

“The tailwind of lumber coming down is very comforting,” Yearley told CNBC’s Jim Cramer. “It’s going to help us. It’s going to drive some margin. But I think it’s going to offset some of the other cost increases that we’re feeling.”

Yearley says it’s also taking longer to build homes with recent supply chain and labor issues. “It took about two weeks longer in our third quarter to deliver a home,” Yearley says. “We expect that to continue for a couple more quarters as we manage through it.”

The median sales price of a new home in July was $390,500, an 18.4% increase compared to a year earlier, the Commerce Department reported this week.

“New residential construction remains strong, but building material pricing and availability are likely to remain significant headwinds,” Charlie Dougherty, an economist at Wells Fargo, told NBC News earlier this month.

Source: “Toll Brothers CEO Says the Drop in ‘Crazy High’ Lumber Prices Will Save $40,000 Per Home,” CNBC (Aug. 25, 2021)

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

FAU Economist Says Homes ‘Less Overpriced’ in July

Interesting-Economist says housing is “less overpriced”. Did they forget basic economics of Supply and Demand? Supply is low, Demand is high = increase in pricing not “overpricing”. If housing was overpriced they would not sell and they are selling in record time.

By Amber Randall

The overheated market may be slowly cooling. Even if July numbers just reflect the usual summer slowdown, it could mean traditional patterns are starting to return.

FORT LAUDERDALE, Fla. – Homes in South Florida are a little less overvalued than they were a month ago, a positive sign after a year of insane pricing.

Homes in Palm Beach, Broward and Miami-Dade counties sold for 13% above their long-term pricing trends in July, a slight decline from the month before, when homes were overvalued by 16%, according to researchers at Florida Atlantic University (FAU).

“I’m excited about these numbers,” FAU economist Ken H. Johnson said. “I would like to see prices with a premium that is not so large, but we are going in the right direction.”

The slight dip from last month’s index could signal a slight slowdown in the market, as mortgage applications have fallen. Or it could be the typical summer slowdown as families go on vacation.

It’s still a good sign if it’s only a summer slowdown, as it would show that the real estate market could be headed to more traditional seasonal patterns, Johnson said.

Jonson and Florida International University professor Eli Beracha analyzed over 100 metro areas, using 25 years of data from Zillow on single-family homes, townhomes and condos. Out of nine metros in Florida, the South Florida area ranked last in overpricing. Lakeland and the Tampa Bay area were the most overpriced in Florida, both at a little more than 31% above where they should be.

Housing values either fell or remained level from one month to the next, the researchers found.

“While we’re almost certainly nearing the peak of the current housing cycle, it’s nowhere near as serious as it was more than a decade ago, when Florida homes were overvalued by 60% or more,” Johnson said. “Prices eventually will level off or fall, and recent buyers who want to sell would be hard-pressed to earn their money back.

Median sales prices leveled out for the most part in South Florida in July, according to data from the Broward, Palm Beaches & St. Lucie Realtors. The median price stood at $500,000 in Palm Beach County for the second month in a row. It was $495,000 in Broward County, down slightly from June, and $515,000 in Miami-Dade, a slight increase.

“Because the summer months tend to be slower, many buyers I have been working with have taken advantage of this relatively quieter time and have been able to strike deals on homes that may have had more buyer demand in busier months,” said Bonnie Heatzig, executive director of luxury sales at Douglas Elliman in Boca Raton.

© 2021 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.

Appeals Court Overturns Beach Access Ruling

The decision overturns an earlier ruling that backed waterfront property owners. The issue focused on dry-sand parts of the beach, “customary use” rules and a 2018 law.

By Jim Saunders

TALLAHASSEE, Fla. – A federal appeals court overturned a ruling that backed waterfront property owners in a battle with a Pinellas County town about public beach access. The decision by a panel of the 11th U.S. Circuit Court of Appeals focused, in part, on a 2018 Florida law that put restrictions on what is known as “customary use” of beaches.

The panel said U.S. District Judge James S. Moody should not have granted summary judgment to a group of property owners in Redington Beach who argued that an ordinance allowing public access to certain parts of the beach violated the 2018 law. The Atlanta-based appeals court also tossed out Moody’s conclusion that the ordinance resulted in a “taking” of property.

Friday’s decision sent the case back to district court for “further determination” about whether the town had properly established customary use of the disputed portions of the beach. Summary judgments are issued without full trials.

The Florida Constitution ensures public access to portions of beaches “below mean high water lines,” often described as wet areas of beaches. But the lawsuit and the 2018 state law focused on dry-sand portions of beaches closer to homes.

Customary use is a legal concept that involves people having access to property “based on longstanding customs,” the appeals court said Friday. The 2018 law put in place an extensive process for local governments that want to have ordinances aimed at ensuring customary use of beach areas above the mean high-water line, including requiring them to receive judicial approval.

The law took effect July 1, 2018, but Redington Beach approved an ordinance on June 6, 2018, designed to allow the public to continue the customary use of dry-sand areas of the beach.

In 2019, seven beachfront property owners filed a lawsuit challenging the ordinance, saying their lot lines included dry-sand portions of the beach. In a brief filed at the appeals court, attorneys for the property owners said the ordinance violated the state law and that Moody’s ruling in 2020 should be upheld.

“The district court properly declared the town’s customary use ordinance was void as violating (the state law),” the brief said. “There is simply no way to read (the state law) as authorizing the town’s decision to keep its customary use ordinance in effect beyond July 1, 2018.”

But the appeals court disagreed with the property owners’ reading of the law and said Moody erred in discounting evidence “supporting customary use.” It pointed to evidence dating back to Charles Redington, who founded the town in 1935 and donated beach-access points.

“As such, the town provided evidence suggesting that residents and nonresidents alike use the dry sand beaches, including residents who do not own beachfront property,” said the 24-page decision, written by Judge Beverly Martin and joined by Judges Britt Grant and Andrew Brasher. “This overview of the evidence is not exhaustive. Nevertheless, it reflects competent evidence put forward by the town in support of its customary use defense.”

Source: News Service of Florida

Fed’s Powell: There’s No Returning to Pre-Pandemic Economy

The chair says the U.S. economy has been permanently changed by the pandemic, and the central bank must understand and adapt to those changes before making decisions.

By Martin Crutsinger

WASHINGTON (AP) – Federal Reserve Chairman Jerome Powell said Tuesday that the U.S. economy has been permanently changed by the COVID pandemic, and it is important that the central bank adapt to those changes.

“We’re not simply going back to the economy that we had before the pandemic,” Powell said at a Fed virtual town hall for educators and students. “We need to watch carefully as the economy continues to get through the pandemic and try to understand the ways that the economy has changed and what the implications are for our policy.”

Powell said that, while it is not yet clear if the delta variant of COVID will have further impact on the economy, the country has already seen significant changes since the pandemic began shutting the country down in March 2020.

Those changes range from the increase in remote work, to restaurants offering more take-out meals, to real estate agents learning to show homes virtually, he noted. Many companies have already made large investments in technology to adapt to the challenges that the pandemic has presented.

“It seems a near certainty that there will be substantially more remote work going forward,” Powell said. “That’s going to change the nature of work and the way work gets done.”

Powell said the heavy investment by companies in new technology means there will be more jobs in the future associated with maintaining that technology but also potential job losses in industries focused on in-person contact. He said some of those industries may be moving to an “automated, no-contact model.”

This trend is already showing up in the jobs data, with the recovery slower in industries that rely on public interaction, such as travel, leisure and hospitality. Those are jobs disproportionately held by women and people of color and typically pay lower wages, Powell noted.

“It may be that some of these people will have a harder time finding their way back into the workforce without more education and training,” he said. He said there are millions of people who have lost service sector jobs and remain out of work and need to be supported. “That’s a part of the recovery that’s far from complete.” he said.

Speaking to the audience of students and educators, Powell said the pandemic could turn out to be an historical inflection point that will allow the current generation of students to turn the lessons learned into “profound tools of change.”

Students who have lived through the pandemic will see the world differently, he said.

“You have seen a world upended, but you have also seen a world that is rapidly changing — sometimes more in one week than some of us have experienced over the course of decades,” he said.

“This is an extraordinary time and I believe that it will result in an extraordinary generation,” Powell said.

At the town hall is an event started by Ben Bernanke, one of Powell’s predecessors as Fed chairman, and continued by former Fed Chair and now Treasury Secretary Janet Yellen. It seeks to highlight the importance of classes in economics.

Copyright 2021 The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Judge Dismisses Antitrust Lawsuit, Favors NAR Over Top Agent Network

NAR’s Clear Cooperation policy placed limits on pocket listings, leading a members-only “top agents” network for non-MLS listings to file a lawsuit. The ruling questioned some aspects of Clear Cooperation, but the judge said antitrust does not give TAN a right to “hoard listings among themselves.”

By Kerry Smith

LOS ANGELES – Top Agent Network (TAN) filed a lawsuit against the National Association of Realtors® (NAR) and others, claiming an antitrust violation under NAR’s Clear Cooperation policy that placed new limits on pocket listings.

Exclusive listings must now be entered into the local MLS within one day after being publicly advertised, and MLS users who fail to do so could potentially lose access to their MLS.

In the case, U.S. District Judge Vince Chhabria ruled that TAN failed to show how NAR’s policy breaches antitrust law. He said TAN presented “a reasonable argument” for potential antitrust problems in some situations, but he also said, “TAN could never allege an antitrust injury from [NAR’s policy]” because the policy would improve the parts of TAN’s business model that make it anticompetitive.

He said NAR’s policy isn’t “anticompetitive to the extent that it prevents members of an exclusive listing service like TAN from concealing listings from NAR’s subscribers while simultaneously benefiting from access to NAR’s service.”

Under TAN’s business model, top agents in an MLS area shared listings among themselves first, however the “enter into the MLS within one day after publicly advertising” aspect of Clear Cooperation makes that difficult.

Chhabria also said that TAN is anticompetitive. Since it restricts membership to the top 10% of agents (by sales volume) in a market, it cannot use U.S. antitrust laws as a shield for its anticompetitive activities.

“The key pro-competitive benefit of [the MLS system] is that every NAR-affiliated MLS is open to any licensed real estate agent who is willing to pay the fees,” Chhabria said. He suggested that antitrust might be an issue for the courts to consider if another listing service was equally open to everyone.

Chhabria also noted that the top agents with membership in TAN earned that status working through the local MLS, and they “want to pull the ladder up behind them. … Instead of continuing to share listings with the open network of agents that supported their ascent, they would prefer to hoard choice listings among themselves.”

In a statement emailed to Inman News, TAN’s attorney – Paul T. Llewellyn, partner at Lewis & Llewellyn LLP – said the company was “exploring all available options to challenge” NAR’s Clear Cooperation Policy.

Source: Reuters (08/17/21) Scarcella, Mike; Inman News (08/17/21), Andrea V. Brambila

© 2021 Florida Realtors®

Lawmakers Want FTC to Investigate Zillow Over Antitrust

Members of House and Senate antitrust subcommittees asked the Federal Trade Commission to see if Zillow’s acquisition of ShowingTime could violate U.S. antitrust laws.

WASHINGTON – U.S. lawmakers want the Federal Trade Commission (FTC) to investigate potential antitrust violations over Zillow Group’s pending $500 million acquisition of ShowingTime, a scheduling platform for home showings.

Rep. Ken Buck (R-Colo.) and Sen. Mike Lee (R-Utah), ranking members of House and Senate antitrust subcommittees, reportedly sent the FTC a letter urging an investigation into the acquisition.

Zillow Group has made several acquisitions over recent years, including one that allows it to operate as a broker. In February, Zillow announced plans to purchase ShowingTime, which it says will remain an open platform. The acquisition is still pending.

In their letter to the FTC, the lawmakers said they believe the acquisition could “further entrench Zillow’s consumer information advantage to the detriment of homebuyers and their competitors.” The letter also refers to Zillow’s Zestimate, alleging it could “unduly influence” homeowners who may be trying to sell their homes.

“The effect of Zillow’s acquisitions appears to be that it can effectively tell the homeowner what their home is worth, buy the home from the homeowner for that amount, and then turn around and immediately sell the home for a higher price,” the lawmakers stated in the letter to the FTC.

Zillow provided the following statement to GeekWire: “Since our announcement to acquire ShowingTime, Zillow and ShowingTime have worked constructively with the FTC staff in their thorough review of the transaction. … Key to our mission is our work to modernize the real estate transaction – which has been notoriously resistant to consumer-friendly change over the decades. By building an open and equitable service which is available to all agents and brokers, which will include ShowingTime, we are helping move the industry towards a more efficient, digital future that works to benefit consumers.”

Source: “Zillow Group Faces Antitrust Scrutiny From U.S. Lawmakers Over $500M ShowingTime Acquisition,” GeekWire (Aug. 13, 2021) and “Lawmakers Flag Zillow Deal for FTC Scrutiny,” Axios.com (Aug. 12, 2021)

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Builder Confidence Hits 13-Month Low as Demand Drops

Homebuilder confidence hit its lowest level since July 2020. While labor shortages and supply challenges played a role, buyer “sticker shock” is the new concern.

By Kerry Smith

WASHINGTON – Higher construction costs, supply shortages and rising home prices pushed builder confidence to its lowest reading since July 2020, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Builder sentiment in the market for newly built single-family homes fell five points to 75 in August. It’s still in positive territory since anything about 50 means builders are on the happy side of the monthly study, but it’s trending in a negative direction.

“Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs,” says NAHB Chairman Chuck Fowke, a custom home builder from Tampa. “Policymakers need to find long-term solutions to supply-chain issues.”

“Higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales,” adds NAHB Chief Economist Robert Dietz. “While these supply-side limitations are holding back the market, our expectation is that production bottlenecks should ease over the coming months and the market should return to more normal conditions.”

The HMI index gauging current sales conditions fell five points to 81, and the component measuring traffic of prospective buyers also posted a five-point decline to 60. The gauge charting sales expectations in the next six months held steady at 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell one point to 74, the Midwest dropped two points to 68, the South posted a three-point decline to 82 and the West registered a two-point drop to 85.

The NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

© 2021 Florida Realtors®

Market shift may be coming.

Bidding Wars Cooling: Prepare Now for a Market Shift

Some frustrated and discouraged buyers dropped out of the market, but many may jump back in as inventory grows, properties linger on the market and bidding wars ease.

CHICAGO – The hallmarks of the current market – low inventory, multiple offers and rapidly selling properties – won’t be around forever, and even experienced agents should prepare for changes.

To prepare, agents should stay in touch with buyers and even sellers they previously worked with – ones who unsuccessfully tried to succeed in the current market. Agents can send them relevant information about market changes, such as such as new inventory or construction.

As the market cools a bit, agents may discover that they need to show more homes over a longer period of time. They should also prepare to filter buyers more to avoid “tire kickers” who say one thing but end up doing another. They shouldn’t be afraid to ask qualifying questions and set limits on how long they will work with such clients.

In addition, agents should study comparable sales and analyze current market conditions, both locally and nationally. As markets change, the level of prep for a sale may also need to change, along with the frequency of communication and updates.

Moreover, it’s important for a new agent to understand what a seller’s closing costs are in their market, including title or escrow fees. Buyers should understand the provisions that allow them to get out of a contract and the timeframes for doing so. And buyers should be told to send all contract questions and interpretations to the agent rather than friends or relatives.

Finally, agents should stay current on the latest real estate information. They can do that by reading, attending conferences and webinars, and simply talking to agents, appraisers, builders and lenders.

Source: Inman (08/03/21) Ameer, Cara