With the increasing volatility of today’s real estate market, it can be easy to get caught up in distractions, rescheduled meetings and competing priorities. And when it comes to online communication, employees report spending over a third of their hours on email, with 84% of workers claiming to receive more emails than ever. Moreover, study after study continues to point toward the ineffectiveness, if not damaging consequences, of multitasking. Real estate professionals like yourself want to get a handle on changes in the market as well as your clients’ priorities. It is crucial that you effectively and efficiently manage your schedule and optimize your productivity. To ensure you make the most of your day, we’ve compiled a few tips that will help up your efficiency.
Block out your day
Setting aside blocks of time to work on certain tasks throughout the day is a surefire way to ensure tasks don’t slip through the cracks. By building priority tasks that most immediately affect your bottom line, such as responding to new leads, cold calling or managing online ads, you can guarantee that you take these tasks on each day. Similarly, try dedicating specific time to administrative work or even answering email to make sure these smaller tasks don’t slip through the cracks. In doing so, you will be able to completely focus on the work that matters, without the interruption or distraction of your to do list.
Make scheduling work for you
Everyone has been in a scenario where the act of trying to get a meeting on the calendar can take more time than the actual meeting itself. Whether it’s figuring out time zones or rescheduling as events change, scheduling can often appear to be too much work for too little return. The back and forth shouldn’t cut into your ability to take these meetings, nor should it prevent you from taking advantage of each opportunity as it arises. With that in mind, there are a number of scheduling smart tools available to make your life a little easier. Be on the lookout for tools that update your calendars in real time to accurately reflect changes as different time slots get booked or canceled. But working with people is often at the crux of this industry, so be mindful to leverage tools that prioritize personable interactions rather than simply sending your clients to a site to choose a meeting time.
Take control of your inbox
A study from the University of California found that it takes over 20 minutes to refocus after an interruption. And with the increase in hybrid and remote work, it’s becoming increasingly easier to be pulled away from a task by an email or a messaging app. To increase the efficiency with which you approach each task, minimizing these distractions will prove crucial. Use your email to set reminders for important meetings, deadlines and dates, and archive messages that don’t need immediate attention. Take advantage of email technology that will help identify important emails and bring non-urgent emails back to your inbox when they need attention. Lastly, consider closing email or using a smart tool to pause your inbox when working on a deadline to prevent any distractions.
Build your brand to get referrals
In real estate, starting relationships off on the right foot goes a long way toward building your brand which, in turn, means more referrals. Much like how it might take you 20 minutes to refocus after a disruption, it can take your potential clients that long too. Instead of sending a scheduling link, send an invite with a clickable, always up to date calendar. Not only will it save you time, but it will signal to your clients that you value their time as well.
Boomerang’s leading productivity tools include software that integrates with Gmail, Outlook and mobile to enable millions of people to efficiently master their email and even helps write emails that are more likely to get a response with the assistance of artificial intelligence. To learn how Boomerang can help you effectively and efficiently manage your schedule and optimize your productivity, visit Boomerang.
Aye Moah is CEO and Co-founder of Boomerang. Moah came from Burma (now Myanmar) and attended MIT on a scholarship and graduated with a B.S in Computer Science.
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Americans have always enjoyed ‘do-it-yourself’ (DIY) home improvement projects, and the pandemic only emphasized this passion. This idea was supported in a recent survey by StorageCafe, a nationwide storage space search website and a part of Yardi, which analyzed approximately 3,300 responses to see what the most popular home improvement projects are these days, how much they cost and who’s more inclined to engage in remodeling, and other types of projects.
Here are the major findings from the survey:
“We have had an amazing two years and at times it was hard to keep up with the work. Since March, we have noticed a major shift in the consumer being willing to pay the inflated prices that come with home improvement,” said Bryan Sebring, CGR, president and founder at Sebring Design Build and author of the report. “People are still wanting to remodel their house, but when they find out what the project may cost, they are very surprised and are choosing to wait. Typically, people fund projects with equity in their house or stock market gains. With interest rates doubling in the past year and the correction in the stock market, people are not in a good position to do these projects. Until the inflation rate goes down and the Fed U-turns in interest rate hikes, I see a slowdown continuing in the home improvement market.”
To read the full survey, visit: https://www.storagecafe.com/blog/home-improvement-in-the-us-relying-heavily-on-diy/.
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Many economists are predicting that the U.S. is on the verge of a recession. The stock market has entered a bear market (meaning it’s down 20% from its peak), the Federal Reserve continues to raise interest rates to combat inflation and the housing market boom is beginning to lose steam. But how would a recession impact the 2022 real estate market?
A recent report by Clever Real Estate takes a closer look at this very question and examines how the real estate market could be well-positioned to weather a recession.
The report suggests the following guidance for navigating the real estate market during a recession:
“Although housing prices tanked during the post-2008 recession, they look to be supported by pretty strong fundamentals in 2022 and are likely to weather the storm,” the report stated. “This isn’t as unusual as it might sound. Home prices rose or held steady in three out of the past five recessions. On top of that, the real estate industry has evolved radically over the past decade, with the rise of the iBuyer industry…and innovative real estate companies…helping homebuyers and sellers save on transactions—something especially important amid economic uncertainty.”
To read the full report, click here.
The post How to Survive in the Real Estate Market During a Recession appeared first on RISMedia.
The number of bedrooms and bathrooms in a home is very important. It’s often one of the first things a buyer looks for and will affect the value of the home. It’s important because they might want a certain number of bedrooms and bathrooms for their family.
Some buyers will not make an offer on a home without a specified number of baths.
But when it comes to bathrooms, not all bathrooms are the same. The home might have a full bath, a three-quarter bath, a half bath, or a quarter bath. If you haven’t heard about these terms before, it could be confusing.
So what is the difference between these types of bathrooms? We define the types of bathrooms you might find described in a property listing.
What is a half bath?
A half bathroom has two fixtures. It will normally be just a sink and toilet, and might be called a guest bath or powder room. Maximum Real Estate Exposure has some interesting info on the history of the name “powder room.”
These types of bathrooms are often located on the main living floor in a multistory home for convenience. This allows people to avoid a longer trip upstairs when they need to use the bathroom.
If the home doesn’t have a bathroom on the same floor as the living room or relatively close by, a new half bathroom will benefit anyone living in the property. Converting a closet into a half bath is often a very profitable home improvement that will make your home more desirable.
If you have a suitable closet that is just large enough for a toilet and sink, spending around $4,000 could convert it to a half bath. If there isn’t already a half bath near the living room area of the home, this upgrade will increase the value.
What is a full bath?
A full bathroom should contain everything; toilet, sink, shower, bathtub, or a shower and bath combined. It could also contain a bidet, double sinks, or a smart toilet, though these aren’t included in the definition.
A full bathroom for the master bedroom is a very desirable feature. Home buyers are looking for this type of appealing feature, and it should make the home easier to sell. When real estate markets shifts to favor buyers, they become more picky. With more inventory they can afford to be. Having a master bath if often at the top of a buyer’s wish list.
What is a three-quarter bath?
While the full bath has four fixtures, the three-quarter bathroom only has three of them, so it is three quarters of a full bathroom. Often this will mean the bathroom is missing a bathtub, though that isn’t always the case.
This type of bathroom will normally contain a toilet, sink, and shower stall. Sometimes, particularly in older homes, a three-quarter bath might have a tub instead of a shower. If this is the case, it is an easy and cheap upgrade to fit a shower head and curtain to make it a full bath. It will be more costly, however, if the bathroom walls are only partly tiled.
What is a quarter bath?
As you might have already guessed, a quarter bath only has one fixture. Often this will just be a toilet without a sink. These types of bathrooms are increasingly rare, after all, not washing your hands after using the toilet isn’t considered very nice for obvious reasons.
Sometimes a quarter bath could be referring to a room with just a shower. This might be outside next to the pool so that people can shower after having a swim.
Are two half baths the same as a full bath?
While you might think that two half baths add up to a full bath, that isn’t the case. If a home has two full baths, and two half baths, it isn’t simply listed as having three bathrooms.
Each bathroom is listed separately, instead. This gives buyers a more accurate picture of what the home has to offer. Listing the bathrooms separately also shows that the home has more value over properties with fewer bathrooms.
Though the number of bathrooms a home has can be a selling point, not all bathrooms are equal in the fixtures they have. Defining bathrooms as full, three quarters, half, and a quarter, is a simple way to describe the features inside the home.
While these terms don’t completely describe what the bathrooms provide, it is a quick way to sum up the features of a home.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years. Bill is the owner and founder of Maximum Real Estate Exposure. For the past decade, he has been one of the top RE/MAX REALTORS® in New England.
Another year, another period of unprecedented transition in real estate. Although agents, brokers and everyone involved in the housing market have always been forward-looking as a rule, the last three years or so have required a unique understanding and focus on both the future and the big picture.
Yesterday, the National Association of REALTORS® (NAR) held their annual Forecast Summit, attempting to alleviate at least a little of the anxiety around all the massive changes on the horizon for real estate—from cratering home sales to a recession to institutional investors “gobbling up” the single-family market.
“I think it’s really helpful to understand the market, how to understand consumer behavior and how that’s shifted a little during the pandemic,” said Dr. Jessica Lautz, VP of demographics and consumer insights for NAR. “But a lot of that is an acceleration of past trends that we have been seeing.”
Much of what Lautz and NAR Chief Economist Lawrence Yun covered in their presentation are indeed issues that anyone paying attention to real estate will be at least somewhat familiar with. But breaking down exactly where the data is pointing—how fast things are moving, where trends are resilient versus transitory—was surprising.
One notable trend is that homes are still disappearing quickly. Spending an average of 14 days on the market, according to Lautz, 88% of homes sell in under a month. This is despite a significant drop in the number of offers per home, plummeting from an average of 5.5 at the height of pandemic-bidding warfare to 3.4 in just the space of a couple months.
“In some local markets, I know that’s laughable,” she said.
But Lautz said that more than three offers is a great overall indicator as far as demand, and these offers are likely good ones.
“We’re not talking about the bottom of the barrel here. That’s still pretty good,” she asserted. “Those are probably qualified buyers who are probably able to ratify that contract—finally, for many of them.”
Yun added that some people still have a locked-in mortgage rate from before rates rose precipitously early this year, and are jumping to snatch up homes as other buyers—who might not have locked in a low rate—are getting priced out.
Another trend that was a little uncertain was vacation home purchases, which spiked at the height of the pandemic, with 22% of all home sales from small investors (used for Airbnb or seasonal rentals) or second-home purchases. That has dropped significantly to about 16%.
Something that has also worried many onlookers is foreclosure sales. As a housing market pullback accelerates, there has so far been no real increase in short sales or foreclosure sales, still at 1% (these sales made up 49% of the market at the height of the 2008 crash).
“We’re really just not seeing that today,” Lautz said.
From the granular level of how people buy and sell homes in 2022, Lautz highlighted the fact that virtual home purchases—buying a home without ever physically visiting the property—has remained steady, with 12% of buyers making a home purchase sight unseen, even as pandemic restrictions have waned.
“I think what’s happening here is there’s still low inventory, but we also know migration trends are playing a part of this. If people are moving a long distance away, and they see that perfect home jump onto their MLS, they’re going to say, ‘You know what, you’re my REALTOR®, show me that home virtually,’” she said.
On the same note, 85% of buyers are still looking for homes outside of city centers, and 34% want work-from-home amenities in their home, proving that remote work is a persistent trend. Lautz suggested that highlighting any kind of feature related to work from home in a listing would remain a great practice for listing agents.
Yun, who focused on the big-picture economy, explained that the labor economy continues to behave in what he called a “bizarre” manner even as other major economic indicators have at least started to normalize post-pandemic.
“In an environment with rushing mortgage rates, what will drive home sales is jobs,” he explained.
Specifically, he pointed out how the number of workers who have seemingly permanently abdicated the workforce has remained stubbornly high, with 2 million people still on the sidelines even after stimulus payments subsided and industries reopened.
“Help wanted signs are pretty much everywhere,” Yun says. “Theoretically, it is still almost a two-to-one ratio in terms of job openings to people who are unemployed.”
He qualified this, however, by noting that many people are not finding the right job to match their needs, demanding higher pay or seeking a match for their qualifications. Construction job openings specifically have reached a record high, with advocates pinpointing both long and short term underinvestment in this industry.
But Yun affirmed that having so many open jobs was “unusual” in a recessionary environment.
“It’s a very weird recessionary condition—I don’t know if I want to play with the word.”
An unequal regional distribution of jobs was another notable oddity of the current economy, according to Yun. Comparing what the market looked like right before the pandemic, different areas have experienced wildly different recoveries.
“There is some variation. Generally speaking, Rocky Mountain states along with southern states have turned positive, while the rest of the country is struggling or almost getting back to normal but not there yet,” Yun said.
In terms of the well-documented dive in home sales, trends seem to be pointing toward a consistent downturn, with five months of lower sales bringing the country just below where it was before Covid, according to Yun. Leading indicators are also negative, he added.
“Essentially, some people are very uncomfortable with higher monthly payments, and other people simply don’t have the money,” Yun said.
Inventory indicators are on the way up, and in tandem with some buyers being pushed out of the market, Yun said it was likely that buyers could soon “be more relaxed, look at three, four, five homes…just like the olden days.”
The incredibly persistent trend of prices, still spiraling up despite these other falling metrics, could partially be explained due to the fact that list prices are high even if contract prices are falling.
“That’s why you are getting this conflicting report where home sales are coming down but prices are hitting record highs,” he explained. “Sellers are looking at what their neighbor’s home sold for…and then they are essentially reducing.”
Maybe the hottest topic that was not directly related to housing was the question of whether the country has entered, or is soon likely to enter, a recession, with several audience questions on that theme. Yun said it isn’t that simple, even though based purely on GDP, the economy is indeed in recession.
“In 10 years, they will say whether we were in a recession or not,” he said.
Besides a recession, something that was not covered by either Lautz or Yun, but was asked about by viewers is institutional buyers and investors. Yun waxed philosophical, wondering just how far big Wall Street-backed companies could transform housing in the United States as they “gobble up” single-family homes to rent them out. Investors make up 20% of all buyers, according to Yun, but that includes both big and small, mom-and-pop operations.
“The numbers are a little hard to get as to true Wall Street-backed institutional investors, corporate landlords in a sense. But it is rising. It is a concern,” Yun said.
At the very highest level, this trend—which has grown dramatically as big hedge funds and private equity firms see opportunities in real estate—could transform housing at a fundamental level, according to Yun.
“I think the bigger question for society is, do we want to see an ownership society, or do we want to see a renter society? I think many people will say an ownership society is preferable, a way to build wealth,” he said. “Corporate investors, in a sense, are hindering the country from becoming a more ownership society.”
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Loan marketplace LendingTree saw its consumer segment somewhat offset significant losses in its mortgage and home businesses to post a middling revenue of $261 million for Q2 2022, down 3% year-over-year as the company seeks to power through a tough moment for lending—specifically mortgage loans.
WIth overall home segment revenue down 30% from last year, and mortgage-specific products down 49%, CEO Doug Lebda said on a Q2 earnings conference call that he hoped the worst was already in the rearview mirror.
“Despite these headwinds, we are forecasting that segment level profis will be roughly flat in the third quarter,” he said.
Also reporting a net loss of $8 million, LendingTree stock was down significantly in early trading, falling 8% at the opening bell.
The company had revised revenue guidance down by about $20 million in late June responding to these home loan challenges. Lebda wrote at the time that “difficult economic forces have persisted, and in many instances worsened, so far this year,” citing both interest rates as well as recession fears.
LendingTree executives had anticipated these issues with a pivot to consumer products while also trying to position themselves positively around home equity loans, with Lebda saying that the company is “actively working with mortgage partners” to increase their products around HELOC.
Refinances are dropping proportionally to other home products, according to Lebda, with home equity loans outsripping refis as part of LendingTree’s business. At the same time, he and other executives on the conference call agreed that purchase loans are a more important focus in the near and medium term as the pool of consumers who can or want to refinance shrinks.
Overall, though, the company is not expecting any significant relief this calendar year, with CFO Trent Ziegler saying in a statement that even consumer lending could be affected by further macroeconomic downturns. New guidance for the full year anticipates a revenue drop of 8% – 10% from 2021, between $985 million and $1.015 billion.
“We expect the environment to remain challenging in Home and Insurance through the remainder of the year and acknowledge the prospects for our Consumer segment are increasingly uncertain,” he said.
In response to a question from an investor specifically about how worsening market conditions could affect consumer products, Lebda posited again that some of that is already being factored in by lenders.
“In the consumer segment, lenders would be demanding less volume as they tighten up their credit spectrum and are lending less; however, a lot of that has already happened in the market,” he said.
COO J.D. Moriarty said one of the lessons the company learned from the pandemic was not to get too skittish in periods of significant uncertainty, specifically referencing those wild early months of 2020. That lesson is being applied to all segments of the company.
“You’ve gotta weather the period. You’ve gotta be making investments. Don’t freeze,” he said.
In spite of a spate of gloomy predictions about the housing market and dampened confidence in the economy, new data shows that profit margins for home sales across the U.S. have risen at a pace not seen in over a decade.
Gains on home sales in the second quarter of 2022 increased by 55.5%, according to a recently released report by ATTOM, a curator of nationwide real estate data, making it the largest quarterly gain since at least 2008. While profit margins routinely climb during the spring home-buying season, the second quarter spike of more than seven percentage points is undoubtedly an unusual upswing.
“Home sellers in the second quarter continued to benefit from the rapid growth in home price appreciation the country has experienced over the past few years,” said Rick Sharga, executive vice president of market intelligence at ATTOM, in a release. “While price growth may slow down as higher mortgage rates dampen demand from prospective homebuyers, home sellers should continue to profit from the record $27 trillion in homeowner equity in today’s market.”
Gross profits also hit new highs in the second quarter, following a slight dip in the early months of the year. The typical single-family home and condo sale in the U.S. generated a gross second-quarter profit of $123,869, up 19% from the first quarter of 2022 and 38% from a year earlier.
“On the heels of a lackluster first quarter of 2022 that suggested possible weakness in the nation’s long-running housing market boom, the latest typical profit margin was up from 48.3% in the first quarter of 2022 and 42.9% in the second quarter of 2021. It was more than 20 points above the 32% figure from the second quarter of 2020.”
“The second quarter profit figures showed how strong the nation’s housing market prices remained despite rising economic uncertainty and home mortgage rates that have surged this year. Average mortgage rates have nearly doubled from a year ago, reaching almost 6% for a 30-year fixed rate loan, making affordability a challenge for many potential homebuyers. These higher rates, coupled with rising home prices, the highest U.S. inflation rates in 40 years, and soaring food and fuel prices are all headwinds threatening to slow down what has been a white-hot housing market over the past few years. Still, home prices and seller profits surged anew in the second quarter, after a first quarter that saw a rare dip in investment returns.”
Brendan Rascius is RISMedia’s associate editor. Email him your story ideas at email@example.com.
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Investor purchases made up 9.5% of home sales in April, just shy of the February peak (9.7%) and up 64% over 2019, according to a new realtor.com® report that shows investors scooped up a record-high share of for-sale homes this spring. Nearly three-quarters of investors paid in cash (72.2%), according to the report.
Here are some additional key findings:
What do these trends mean going forward?
“While soaring mortgage rates have forced many Americans to put homebuying plans on pause this spring, 2022’s financial shifts have yet to take the steam out of investor activity,” said realtor.com® Chief Economist Danielle Hale. “In the shorter term, everyday home shoppers should be prepared to face tough competition from a group that has deep pockets, often filled with cash. But sellers may benefit from investors making strong offers, at a time when overall demand is cooling.”
Top 10 investor homebuying markets, by share of purchases year-over-year*Rank Metro Area Y-Y Change (pct. pts.) April 2022 Share 1 Charlotte, N.C. 10.7% 20.0% 2 Jacksonville, Fla. 10.2% 17.8% 3 Birmingham, Ala. 8.8% 18.9% 4 Lakeland, Fla. 8.6% 17.8% 5 Winston, N.C. 8.3% 14.5% 6 Tucson, Ariz. 8.2% 14.3% 7 Greensboro, N.C. 8.1% 16.5% 8 Colorado Springs, Colo. 7.9% 11.6% 9 Memphis, Tenn. 7.7% 18.5% 10 Danville, Va. 7.5% 16.3%
*Out of 263 metro areas with 100+ investor home purchases made under a corporation or company name made during the 12-months ended April 2022.
To read the full report, click here.
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ERA® Real Estate recently announced the affiliation of ERA Next Level Real Estate. The startup company is based in Onalaska, Wisconsin, and serves the greater La Crosse County area.
Brandon Cain, who owns and leads the firm, started his real estate career in 2017 after more than two decades as a construction manager in the energy sector. In 2022, he established his own brokerage. As an ERA affiliate, Cain will continue to work with developers and focus on recruiting and developing an expanded salesforce.
La Crosse County, which has a median sales price of $249,000, according to the National Association of REALTORS® (NAR), is located on the Mississippi River along the Great River Road National Scenic Byway. The area has hiking trails, rivers, cycling routes, and is accessible by car from Minneapolis, Milwaukee and Madison. The region’s economy is driven by manufacturing, healthcare, technology, education and tourism. Realtor.com® recently ranked La Crosse/Onalaska third in its “Hottest Housing Market” report that compared market demand with days on the market.
“Brandon’s career as a successful business manager and then a top-performing sales leader perfectly positions him for the next stage of his career as a broker/owner,” said Sherry Chris, president and CEO of ERA® Real Estate. “His innate sales sense and ability to build authentic relationships have served him well in gaining success in his real estate career. We are thrilled to partner with this up-and-coming brokerage and provide Brandon with strategic resources to help him build his business. This is an exciting new chapter for Brandon, and we wish him great success as part of Team ERA.”
“We are delighted to provide our agents with enterprise-level technology to fuel their business and help them stand out in the market,” added Cain, broker and co-owner of ERA Next Level Real Estate. “Our vision for growth is aggressive. We knew we needed the support of a powerful global partner to realize greater efficiencies and scale the business quickly. We have been impressed with the incredible levels of support the ERA brand provides, and we look forward to offering our agents access to ERA’s powerful tools and technology designed to help them generate more business. In addition, being part of a brand with a substantial global network will help give our local company international attention. We are thrilled to have such a committed partner in our success and now that we are part of the ERA network and culture, we will help our agents gain a competitive edge in our market.”
For more information, visit https://www.era.com/.
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There was a time last year when the term “transitory” was commonly used when federal officials discussed elevated inflation. That has proven somewhat of a misnomer in recent months as inflation has climbed, and officials have raced to reel things back in with interest rate hikes that have sent ripples into several markets.
Wednesday marked more of the same as the Fed announced that it would raise federal funds rates by another 75 basis points, with further increases expected as officials try to achieve a “soft landing” for the overheated economy while staving off a looming recession.
Not only does this mark the second consecutive month that officials have responded to the record-level inflationary environment with such a significant rate increase, but initial reports suggest that the increases in July and June are the most stringent moves since the early 1990s.
According to a post-meeting statement, the Fed indicated that it has seen signs that “spending and production have softened.”
“Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low,” the statement said. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
The Fed also noted that the persisting conflict between Russia and Ukraine has continued to impact the global economy and add upward pressure on inflation, which hit 9.1% in July.
In a press conference following the Fed’s announcement, Powell acknowledged that the growth of inflation has continued to disappoint the Fed, which has been evident in the “more aggressive” approach with its planned rate hikes.
“We did judge that a 75-basis-point increase was the right magnitude in light of the data and in the context of the ongoing increases in the policy rate that we’ve been making,” Powell said in response to questions about the Fed’s aggressive stance on monetary policy in recent months.
“We wouldn’t hesitate to make an even larger move than we did today if the committee were to conclude that that was appropriate,” Powell added.
Since starting its rate hikes in March, the Fed has noticeably adjusted from its more subdued stance on reeling inflation. That was evident after June’s inflation data came out and pressured the Fed to shift from a 50-basis-point hike to 75 basis points.
While Wednesday’s announcement marked the second consecutive rate hike at that pace, it also suggests that the Fed may have underestimated the situation.
“Making appropriate monetary policy in this uncertain environment requires a recognition that the economy evolves in unexpected ways,” Powell said. “Inflation has obviously surprised to the upside over the past year, and further surprises can be in store.”
Determined to get inflation in check, Powell also telegraphed that the Fed is willing to make another “unusually large increase” in rates in the next meeting if the data doesn’t improve.
“We will strive to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain time,” Powell said.
When asked how the Fed would weigh the “expected decline” in CPI inflation because of a possible drop in commodity prices, Powell said the committee would keep its eye on indications of a decline in inflation.
“These rate hikes have been large and have come quickly, and it’s likely that their full effect has not been felt by the economy, so there is probably some additional tightening in the pipeline,” he said, adding that the FOMC feels that they need to get the policy “at least to a moderately restrictive level.”
In light of the Feds announcement, several real estate and lending economists have begun weighing in on the potential implications for the market, which has largely seen a cooling effect as mortgage rate surges have exacerbated housing affordability in recent months.
“The housing market has slowed considerably over the past month as rate increases have taken hold,” said Mike Fratantoni, SVP and chief economist for the Mortgage Bankers Association. “We expect that this slower pace will remain through the summer, but buyers could return later this year if the Fed’s plans are better understood by the market and lead to less rate volatility.”
Fratantoni also said the ongoing reduction in the Fed’s balance sheet, including its holdings of MBS, is another factor putting upward pressure on mortgage rates.
Ruben Gonzalzs, chief economist for Keller Williams, echoed similar sentiments in a statement, adding that the path for mortgage rates is less well-defined as the Fed continues increasing interest rates.
“Mortgage rates have historically moved closely with 10-year Treasuries; however, over the last several months, the spread between the two has widened by a full percentage point,” he said.
National Association of REALTORS® (NAR) Chief Economist Lawrence Yun argued that further damage to mortgage rates is unlikely despite the large rate hike following Wednesday’s meeting.
“The long-term bond market, off of which mortgage rates are generally priced, has mostly priced in all future actions by the Fed and may have already peaked with the 10-year Treasury shooting up to 3.5% in mid-June,” Yun said. “It is at 2.8% a few minutes after the Fed’s decision on its new monetary policy.”
According to Yun, the 30-year fixed mortgage rate could settle at 5.5% to 6% for the remainder of the year—admittedly a sizable growth from the same period last year.
Danielle Hale, chief economist for realtor.com®, was left with a few questions following the Fed’s announcement, including “how much more is needed, and when might the economy start to see the effect of rate increases?”
“Today’s statement reiterated the Committee’s expectation that ‘ongoing increases in the target range will be appropriate’ and that the Fed is ‘strongly committed’ to bring inflation back in line with its 2% goal,” Hale said. “For consumers, this means that unless the economy shows additional signs of tipping into a recession, mortgage rates are likely to trend higher, which will be a drag on housing demand.
“In fact, June saw declines in new home sales, existing home sales and the more forward-looking pending home sales,” Hale continued. “Amid slowing demand and higher costs, there are some bright spots for home shoppers. The number of homes for sale continues to grow, registering 18.7% higher than a year ago in June and continuing that trend in more recent weekly data. While the options are more expensive and more costly to finance, the growing number will help the real estate market rebalance, giving potential buyers a much-needed refresh.”
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The Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) announced jointly yesterday a $20 million settlement with lender Trident Mortgage, alleging that the company engaged in discriminatory lending practices as well as that employees used slurs and racist language in their internal communications.
According to a joint announcement from DOJ and CFPB, Trident illegally “redlined” its services in Philadelphia, Pennsylvania, excluding Black and Latin neighborhoods, concentrating its offices and marketing in predominantly white areas and “did not serve the credit needs of neighborhoods of color” during a period stretching from 2015 to 2019.
A senior Trident executive was also allegedly pictured in front of a Confederate flag and was not disciplined.
“This settlement is a stark reminder that redlining is not a problem from a bygone era. Trident’s unlawful redlining activity denied communities of color equal access to residential mortgages, stripped them of the opportunity to build wealth and devalued properties in their neighborhoods,” said Kristen Clarke, assistant attorney general of the Justice Department’s Civil Rights Division, in a statement.
Late last year, Attorney General Merrick Garland announced a specific initiative to target “modern-day redling” as recent probes by journalists, housing advocates and other law enforcement uncovered evidence of the practice all across the country.
Conditions of the settlement also include “assurances of nondiscrimination, outreach and equally attentive customer service to residents of the region’s majority-minority neighborhoods, anti-bias training, consumer financial education and community development partnerships,” according to a release from Pennsylvania Attorney General Josh Shapiro.
Trident is owned by Fox & Roach (which is owned by HomeServices of America), and was a top lender in the region before ceasing operations in 2020. In a statement provided to RISMedia, a HomeServices spokesperson noted that there was “no finding of wrongdoing by Trident” as part of the settlement, and claimed the company’s “mission and culture always reflected unwavering integrity and a commitment to fairness to all.”
“We strongly disagree with the agencies’ interpretation of Trident’s prior lending practices,” the spokesperson wrote. “Trident and any affiliated companies have never denied or discouraged access to mortgage loans or other services based on race.”
The DOJ announcement notes that the settlement is the first involving a non-bank lender and second-largest in the history of the department. Of the approximately $20 million settlement, $18.4 million will go to loan subsidies for neighborhoods of color in the Philadelphia area.
While race-based discrimination in lending was banned by the Fair Housing Act in 1968, both the effects of redlining—originally an explicit federal government policy—as well as continued lending discrimination and systemic biases have prevented people of color from building housing wealth.
“Last fall, I announced the Department’s Combatting Redlining Initiative and promised that we would mobilize resources to make fair access to credit a reality in underserved neighborhoods across our country,” Garland said in a statement. “As demonstrated by today’s historic announcement, we are increasing our coordination with federal financial regulatory agencies and state Attorneys General to combat the modern-day redlining that has unlawfully plagued communities of color.”
According to Shapiro, Trident will find another lender to disburse the subsidy funds, which he claimed could support up to 1,800 loans (at $10,000 each).
“This settlement will afford many individuals the chance at more affordable mortgages in minority neighborhoods. This settlement also serves as a message to mortgage lenders everywhere—we are here, we are watching, and this behavior will not be tolerated,” he said.
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As a manager, regional or broker, increasing production and top-line revenue through recruiting new and experienced agents to your sales team is always a priority but often doesn’t get the hyper-focus attention it should which results in lack-luster recruiting results.
Closing the gap to achieve desired outcomes requires focus, commitment and making recruiting a priority every day. It is easy to set the goals and then ‘hope’ that the goals are achieved but it is more effective to map out the action items that are necessary that will help you get more appointments and ultimately attract and recruit more exceptional agents to your office or brokerage. We all have good intentions but often the crisis of the day interrupts your high priority items. Having a firm resolution to achieve your recruiting goals and sticking to that commitment will ensure you are keeping recruiting a goal and will not allow for distractions to interfere with your plan.
Here are some proven strategies that you can implement today that will dramatically increase your ability to close the gap of making goals and achieving the results and outcomes you want for recruiting new and experienced agents to your successful team:
The activities and plan that you develop now will result in on purpose growth over the next 20, 60 and 120 days. You will have a pipeline of new and experienced sales agents joining you in the coming months and you will be adding new listings, sales, and revenue to your top line for strategic, on purpose growth. It is easier to retain agents that you are growing, and it is easier to attract new and experienced agents when you have a thriving culture of successful agents on your team. Let’s do this and let’s start your office growth today!
Download Johnson’s Exclusive GoldMine Pipeline Strategy to get your agents closing more leads into listings, sales and ultimately income. This system can double their production, fast. Go to www.goldminepipeline.com for Johnson’s Free eBook and the Worksheet. These are just a few of Johnson’s proven and exclusive leadership and development strategies that produce amazing results quickly.
For more information about Johnson’s exclusive turnkey, broker, manager, and team solutions to dramatically grow your revenue, contact Sherri Johnson at www.sherrijohnson.com/onetoone for coaching plans.
Sherri Johnson is CEO and founder of Sherri Johnson Coaching & Consulting. With 25 years of experience in real estate as a top agent, broker, and executive responsible for over 750 agents and over $1.7 billion in annual sales volume. Sherri offers her exclusive and proven methods through custom, one to one coaching and tailored consulting services. Sherri is a highly sought-after keynote speaker delivering high energy and real solutions audiences love. Sherri has been named a RISMedia Real Estate Newsmaker in 2020 and 2021 as an Industry Influencer and Thought Leader. She is the author of the Sherri Johnson Academy, an on-demand learning platform as well as the 90-Boot Camp. Sherri is a preferred coach, consultant and speaker for top 10 international brands and brokerages and can dramatically increase your company’s revenue and profits. Visit www.sherrijohnson.com for more information.
Editor’s Note: This is part of a monthly video series from the National Association of REALTORS® to inform and educate members about important aspects of being a real estate professional. Watch for this series each month in RISMedia’s Daily News.
Watch this video to learn how the REALTORS® Relief Foundation is helping communities impacted by natural disasters.
Rocket Mortgage has announced the introduction of Rate Drop Advantage, a new program that covers a significant portion of a refinance transaction’s closing costs if interest rates drop and buyers refinance within three years of purchasing a home.
Through Rate Drop Advantage, when clients refinance within the allotted time frame, Rocket Mortgage will waive the fees for appraisal, credit report pulls, processing, underwriting and several other costs for an average savings of approximately $2,000, a release stated. Rocket Mortgage says Rate Drop Advantage gives buyers confidence in the midst of a rising rate environment by knowing if rates decrease within the three-year period after closing on their original purchase, they can easily and affordably refinance.
“Rocket Mortgage is committed to creating more ways to make the financing process easier and more affordable for homebuyers and maintain the excitement that should come along with this huge milestone in their life,” said Bob Walters, CEO of Rocket Mortgage. “Innovation comes in many different forms—Rocket Mortgage is known for both our revolutionary technology and the creativity we bring to help meet the needs of our clients, like Rate Drop Advantage, RateShield and our Verified Approval. We are constantly listening to our clients, implementing their feedback and developing programs that meet and exceed their needs.”
Homebuyers benefit in both the short- and long-term with the combination of Rate Drop Advantage and Rocket Mortgage’s existing RateShield program. With RateShield, a buyer has the ability to lock in current rates for up to 90 days while home shopping, providing a hedge against rising rates. If rates have fallen by the time the purchase agreement is signed, the buyer will receive the lower rates, the company stated.
The company notes that Rocket Mortgage is also taking an innovative approach to mortgage approvals. Buyers can receive an exclusive verified approval to know the exact amount they qualify for and the assurance that their finances are ready to close on a mortgage. Far beyond a prequalification or a preapproval, a verified approval is based on an underwriter’s comprehensive analysis of a buyer’s credit, income, employment status, assets and debt. Homebuyers with a verified approval letter from Rocket Mortgage are nearly twice as likely to close on their mortgage.
For more information, visit RocketMortgage.com/Learn/RateShield-Rate-Drop-Advantage.
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Weichert Real Estate Affiliates, Inc. has opened 20 new franchised offices through the first half of 2022. These openings bring the national franchise network up to 375 locations across 43 states. More openings are slated for the coming months, which will increase this number even more.
New locations include Weichert’s first offices in two new states, Montana and North Dakota, as well as many expansions of existing franchise companies. This is the largest period of growth that Weichert has experienced since the start of the pandemic.
“It’s amazing to see our Weichert presence continue to grow throughout the country,” said Bill Scavone, president of Weichert Real Estate Affiliates, Inc. and Weichert, Realtors. “Our sustained growth is evidence that Weichert’s industry-leading technology, marketing tools and business systems are effective in building competitive real estate brokerages in any market in the country.”
The highlight of Weichert’s growth in the first half of 2022 was continued expansion in the Midwest and West regions. Such expansion accounted for 13 of the 20 new franchise office openings.
“We are grateful that our brand is able to reach more agents and clients as part of our Weichert family,” added Scavone. “Our team and existing franchisees always welcome new members with open arms. Our supportive culture filled with idea-sharing has been key to our franchise’s growth and sustained success.”
For more information, visit www.weichertfranchise.com.
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As the fight to preserve the agent compensation structure wages on, real estate leaders and advocates were dealt another courtroom loss in a critical antitrust lawsuit with potentially disastrous consequences for the industry.
A Missouri federal judge recently denied a motion by HomeServices of America (HSOA), the National Association of REALTORS® (NAR), RE/MAX and Keller Williams to compel arbitration in the Burnett/Sitzer class action lawsuit.
U.S. District Court Judge Stephen Bough asserted in a July 19 court order that HomeServices, which initially filed the motion, had “ample opportunity to raise its intention of asserting its arbitration rights” but ultimately waived them by fighting the allegations in federal court.
“Having followed this course, must live with the consequences,” Bough wrote in the order.
HomeServices did so after Bough granted the plaintiffs a class certification in April, opening the door for hundreds of thousands of home sellers to join in on the case if they paid a broker commission on listings featured on one of four local MLSs named in the lawsuit.
At issue is a longstanding multiple listing service (MLS) policy commonly known as the “Participation Rule” or “Buyer Broker Commission Rule,” which mandates that brokers list buyer agent compensation as a prerequisite to listing a property on certain multiple listing services.
The home sellers claimed in the case that NAR and industry franchisors conspired to inflate seller costs through the policy.
According to Bough’s recent order, plaintiffs—including class representatives Rhonda and Scott Burnett—used Reece & Nichols Realtors, Inc. and BHH KC Real Estate LLC to sell their homes.
Both firms, wholly owned by HSOA, used form listing agreements with sellers that included different versions of arbitration agreements through the past eight years. HomeServices contended that it had a right to compel unnamed class members to arbitrate in the case because it has a “close relationship” with both brokerages, and the plaintiffs lumped the three companies together as a single unit in their filing.
HomeServices and other defendants tried instead to have the dispute between the brokers and the “unnamed class members” handled by a private arbitrator in federal court and to halt court proceedings until arbitration was completed.
Ultimately, the court sided with the plaintiffs, citing a September 2021 decision by the 8th Circuit Court that affirmed that the company had waived its right to arbitration.
“We have little doubt about what HomeServices was trying to do,” read an excerpt from the order. “If there was a possibility that the case would end in federal court, it was uninterested in switching to arbitration. Indeed, it has never seriously disputed that it knew about the arbitration clause long before it moved to compel arbitration. Yet it decided to pursue the case in federal court anyway.”
The commentary went on to critique HomeServices’ “preference for litigation over arbitration” throughout the lawsuit and suggested that the company tried to keep its right to arbitration “in its back pocket.”
“It is not as if HomeServices lacked opportunities along the way,” wrote the 8th Circuit Court. “A party cannot keep a contractual right to arbitration in its back pocket and pull it out only when it is ready for a do-over.”
HomeServices declined to comment for this story, but the court order indicates that the company argued that it didn’t waive its rights but was unable to “move to compel arbitration of claims by absent members until the class was certified.”
The court decision adds another wrinkle to an already convoluted web of legal battles the real estate industry has faced in recent years. The Burnett/Sitzer case is one of two significant federal antitrust lawsuits targeting the existing agent commission structure and NAR policies that have upheld it.
In response to RISMedia requests for comment on the recent court ruling, an NAR spokesperson says that the denial of HSOA’s motion doesn’t impact the case as it stands for the association.
“NAR continues to believe the pro-competitive, pro-consumer local MLS broker marketplaces serve the best interests of buyers and sellers,” says Mantill Williams, a spokesman for NAR.
Williams adds that “listing brokers making offers of compensation to buyer brokers gives first-time, low/middle-income and all homebuyers a better shot at affording a home and professional representation.”
That aligns with arguments made in a recently publicized study that HomeServices commissioned to examine the potential implications of indulging the proposed “decoupling” of agent compensation.
The report, which also highlights and criticizes arguments made by plaintiffs and their supporters, found that a commission structure based on buyers paying their agents would significantly suppress homeownership among large segments of the population like minority buyers and those in the low- and middle-income bracket.
“The issues at stake here impact all REALTORS® and are not specific to any particular brand,” Williams says. “Because we know we are working in the best interest of consumers, we’re confident we will prevail.”
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New data from the National Association of REALTORS® (NAR) shows that contract signings decreased in June, following a slight rebound in May, providing further evidence that the 2022 housing market is beginning to cool.
NAR’s Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 8.6% to 91 last month, and year-over-year sales decreased by 20%. An index of 100 is equal to the level of contract activity in 2001.
All four major regions saw double-digit year-over-year downturns, the largest of which occurred in the West, where pending sales were down by almost a third.
Buying a home in June was nearly 80% more expensive than in June 2019, according to NAR. Nearly a quarter of buyers who purchased a home three years ago would be unable to do so now because they no longer earn the qualifying income to buy a median-priced home today
The across-the-board monthly decrease in contract signings, along with a host of other indicators, signal a period of stabilization on the heels of two years of red-hot housing market activity, according to experts.
-6.7% MoM — Now 80.9 PHSI
-3.8% MoM — 93.7 PHSI
-8.9% MoM — 108.3 PHSI
-15.9% MoM — 68.7 PHSI
“Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date,” said NAR Chief Economist Lawrence Yun. “There are indications that mortgage rates may be topping or very close to a cyclical high in July. If so, pending contracts should also begin to stabilize.”
“Home sales will be down by 13% in 2022, according to our latest projection,” Yun added. “With mortgage rates expected to stabilize near 6% and steady job creation, home sales should start to rise by early 2023.”
“With rising mortgage rates compounding record-high prices to make a home purchase a much more expensive proposition, homebuyers are taking a harder look at their plans,” said George Ratiu, senior economist and manager of economic research at realtor.com®. “At the same time, in the wake of two years of travel restrictions and limitations, Americans are embracing summer vacations and ready for a post-pandemic normal. These factors are pulling prospective buyers’ budgets in multiple directions and taking the wind out of the sails of market transactions, with sales of both new and existing homes declining in the first half of this year…The affordability crunch is the main concern for many families this summer.”
Ratiu concluded, “The bottom line is that we are seeing a welcome shift for a housing market in need of a refresh. The past two years’ overheated pace of home sales activity is giving way to a transition toward much-needed balance.”
Brendan Rascius is RISMedia’s associate editor. Email him your story ideas at firstname.lastname@example.org.
CoStar, the commercial real estate and data giant that has recently been making forays into residential and rentals, saw its stock pop after posting 12% year-over-year revenue growth in a Q2 earnings call yesterday, exceeding projections amid strong growth in multifamily spaces.
“With net new bookings of $84 million, we easily surpassed the record sales results we set in the first quarter of this year,” said CoStar CEO and Founder Andrew Florance in a statement. “In addition, both revenue and profit in the second quarter of 2022 were ahead of forecast, and we are raising our guidance for the year.”
CoStar also added 1,000 “new team members,” according to Florance, with many of those coming on the residential side.
With $536 million in revenue, $83 million in net income and $4 billion in cash, CoStar tweaked its full-year expectations from $2.17 billion to $2.18 billion on the high-end (with revenue from residential at $73 million, up from $70 million). CoStar stock was up over 8% in early trading Wednesday following the post-market close earnings call Tuesday.
Even as single-family residential sales and new construction nosedive, new multifamily permits and starts have climbed in recent months. The outlook for commercial spaces is also much better, according to many economists and stakeholders. In a conference call following the earnings call, Florance reiterated this positive outlook on multifamily, projecting 9% growth in that sector this year.
“The trends appear to be clear and obvious, and expected,” he said.
Apartments.com, which CoStar bought back in 2014, continues to be a huge part of the company’s strategic growth going forward, with Florance highlighting 130% new bookings on the platform. Scott Wheeler, CoStar CFO, claimed that sales performance is outpacing the market.
“I’ve been encouraged that even as the industry recovers, and the vacancies start to move up slightly, our sales performance is recovering faster than the industry, which speaks to the strength of the platform,” he said.
Another big question has centered on when, where and to what degree CoStar is going to commit to investments in residential, with consumer-focused real estate portal City Snap launching in New York City this summer. In response to an investor question on mergers and acquisitions, Florance said that his company is in the right place to explore those options.
“We have a great balance sheet with a lot of cash. I think we’ve just turned in a really strong quarter. We’ve got strength in all of our businesses, and I believe that we’re seeing valuations across a half-dozen/dozen interesting companies…become more and more attractive,” he said.
Homes.com, another consumer-focused portal, has seen traffic “up slightly.” That product is on track for a rethinking and relaunch focused on proprietary written and visual content that is “important to consumers,” Florance said. That launch is expected later this year.
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Mortgage applications decreased for the fourth-straight week, down 1.8% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending July 22, 2022.
Here are the key stats from this week:
“Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic.
“Weakening purchase applications trends in recent months have been consistent with data showing a slowdown in sales for newly constructed homes and existing homes,” he continued. “A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year.”
Added Kan, “With mortgage rates remaining well over 5%, refinance applications are now 83% below last year’s pace.”
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Harry Norman REALTORS®, a member of Leading Real Estate Companies of the World, has announced that three of its listings were recently chosen as finalists in the HGTV Ultimate House Hunt 2022. The popular competition, hosted annually on HGTV.com, exhibits homes for sale in eight categories: Amazing Kitchens, Beachfront Homes, Countryside Retreats, Curb Appeal, Downtown Dwellings, Homes With a History, Outdoor Escapes and Waterside Homes, the company stated. HGTV editors select 77 finalists which are then voted on by millions of participants across the country between June 28 and August 2.
Harry Norman REALTORS® noted its listings were selected as finalists in two categories. 90 Palisades Road, a recently renovated 4-bedroom, situated along the tree-lined streets of Atlanta’s Brookwood Hills, was selected as a finalist in the curb appeal section. Additionally, 239 Wildwood Trail, a Blue Ridge Mountains river retreat complete with a private island, and 937 Richard Branch, a contemporary, rural refuge seated on 27 acres near the Tennessee border, were chosen in the countryside retreats category.
For the eleventh consecutive year, all Ultimate House Hunt nominees are represented by members of Leading Real Estate Companies of the World® and Luxury Portfolio International®, the company said.
The winners, the houses with the most votes in each of the eight categories, will be promoted on HGTV.com. In addition, an award will be given for the listing receiving the most votes overall. Last year’s overall winner was an 8,000 square foot waterfront estate in Honolulu, Hawaii. Outside the United States, an HGTV Global Homes gallery shines a spotlight on properties from nine different countries or territories around the world.
To view this year’s Ultimate House Hunt finalists or to vote, click here.
For more information, visit HarryNorman.com.
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