Wednesday
September 20, 2017

Speaking of Real Estate

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Updated: 1 hour 9 min ago

Small Markets See 4% Gain in Commercial Property Sales

Mon, 09/18/2017 - 08:40

Smaller commercial properties in secondary markets are still attracting buyers at good prices, but demand for big-market mega-properties appears to be easing, NAR second-quarter data suggest. Large markets saw a 5 percent annual decline in sales, while smaller markets saw a sales boost of 4 percent.

“Shrinking cap rates and the higher interest rate environment are expected to lead to a plateau in price growth over the next year, especially for Class A assets in large markets,” NAR Chief Economist Lawrence Yun says. “As a result, investors will continue to look to small and tertiary markets for properties that have the best opportunity to provide stability and generate solid returns.”

On a national basis, vacancy rates are expected to retreat 1.1 percent to 11.9 percent for offices, 1.1 percent to 7.8 percent for industrial properties, 0.4 percent to 11.4 percent for retail, and 6.6 percent to 6.1 percent for apartments.

“A very healthy labor market and stronger confidence and spending from both consumers and businesses boosted economic expansion to a solid 3.0 percent last quarter,” says Yun.
“There’s momentum for more of the same growth to close out the year, which bodes well for sustained interest in all types of commercial space.” Yun added that the demand cycle for properties in larger markets is maturing, which means investor interest will likely focus on smaller markets.

Coverage in The Voice for Real Estate.

25% of Male Agents Carry a Gun

Tue, 09/12/2017 - 15:37

Safety is a concern in the real estate industry and it’s not limited to female agents. Recent NAR survey data show that a quarter of men in the business carry a gun to protect themselves. The survey is based on a sample of the NAR membership. Almost 49,000 members were sent the survey and a little under 3,300 responded, for a response rate of 6.7 percent. That puts the margin of error at plus or minus 1.72 percent.

The 25-percent figure of men carrying guns might not be even across the country. More men might carry guns in one area, skewing the national figure higher than it otherwise would be. But, either way, it’s an eye-catching figure. For women, the corresponding numbers is 12 percent. That puts total gun-carrying agents at 16-percent. Overall, pepper spray is the most common self-defense weapon agents use, at 19 percent.

Safety apps are popular. Almost half of all female agents have some type of safety app on their phone. Although the apps differ, one common type of app is simply a way for someone to alert someone else where they are by pushing a button.

Actual violence against agents remains relatively rare, although even one violent act against an agent is one too many. About 5 percent of agents say they’ve been a victim of a crime while on the job. That includes non-violent crimes like having data stolen. About 4 percent of agents self-identify as having been victim of a physical crime: 2 percent say it was robbery, 1 percent say it was assault, and 1 percent prefers not to say.

The fear of crime is quite high, understandably, given that the job often entails meeting people for the first time in different types of settings. More than 40 percent of women in suburban markets say they have felt afraid at one time or another. Sometimes it was at an open house, sometimes it was at a showing.

The data is from an NAR safety report that was released a few weeks ago. It’s a top story in the latest Voice for Real Estate news video from NAR. The video also covers how REALTORS® responded to recent hurricane damage, what’s happening with flood insurance, and how commercial markets are faring (good in secondary markets and less good in bigger markets, where big properties are seeing prices flatten). Watch the video. 

 

We Know We Need Housing and How to Get It. Unfortunately, That’s Where We Stop

Wed, 09/06/2017 - 09:39

Chuck Reed

The United States has a housing shortage. That’s why home prices are rising faster than what many people can afford. But in California, the housing shortage is a crisis. Many people want to live and work in the state, but developers have little incentive to build housing the average person can afford, especially in the hot areas like San Francisco and Silicon Valley. And government hasn’t found the will to be the solution. As former San Jose Mayor Chuck Reed says, “California cares about housing—just not enough to do anything significant about it.”

Reed, who was term-limited in 2014 so couldn’t run again after eight years as mayor and almost 30 years in local government, is an attorney who specializes in land use issues. He was one of the featured speakers at a housing conference NAR hosted earlier this summer in Berkeley, Calif., and his remarks to REALTORS® make it clear he has no shortage of ideas to help get affordable housing built. Of course, his ideas focus mainly on California but they also provide a roadmap the rest of the country can follow.

Take the battle to the Supreme Court

For starters, we should take aim at all the hoops local governments put developers through to get building plans approved—occupancy limits, profit limits, eviction rules—by litigating these restrictions all the way up to the U.S. Supreme Court. As he puts to, “That is the only court where the 5th Amendment seems to be taken seriously.”

Next, change states’ fiscal restrictions to favor housing. He’s speaking about California, but there are lessons here for all states when he talks about modifying property tax allocations so that housing permits generate enough money for cities to pay for increased service demand. He also says states should share sales taxes based on where people live rather than where they buy things. And state and federal transportation money should be allocated to support high-density housing rather than the single-family house on the large lot in the suburbs.

He also wants to see environmental and other reviews streamlined so they’re not used to block developments just because people don’t want them in their backyard.

Long-term, people who care about housing, like REALTORS®, should continue to elect legislators who understand you can’t have job growth without also having places for workers to live.

Reed says California is organized  to make it hard to build housing of any kind, but as the housing crisis makes clear, economic development is only half the equation. The other half is having homes for the people who take new jobs. That’s a lesson that we benefit from no matter what state we’re in, as the continued housing storage throughout the country shows. Click on the PDFs below to read Reed’s full remarks.

Other coverage from the conference.

Conference coverage in the June 12 Voice for Real Estate video:

Sponsor Webinar: Using Big Data to Create Effective Marketing Strategies

Tue, 08/29/2017 - 14:17

The following is promotional copy for a Quicken Loans webinar on how real estate professionals can use data mining in their marketing. REALTOR® Magazine is promoting the webinar because it believes the content might be useful to its readers, but it did not participate in creating the webinar.

Patrick Chism

In one of the most competitive industries in the world, real estate professionals can adapt to the times to find the right clients and reach them in the right way. It’s no longer just a matter of “trusting your gut.” If you’re looking for trends to push your business to the next level, you can pursue big data opportunities.

Patrick Chism,  a marketing lead on the Quicken Loans Social Media Team, will host a webinar on using data in your marketing on Wednesday, Sept. 20, at 3 p.m., Eastern time.

Chism is a writer and conversion strategist for the Zing Blog. Specializing in personal finance and entrepreneurial content, he enjoys breaking down complicated concepts into bite-sized information. He has also spent the last two years testing pizza dough recipes, and he’s close to finding the perfect crust.

Using Big Data to Create Effective Marketing Strategies
Wednesday, Sept. 20
3 p.m., Eastern time

Sign up.

When Your Competition Has Lower Overhead Than You Do

Fri, 08/25/2017 - 09:01

Are you making much money even if you close a dozen transactions this year—or, if you’re a broker, your sales associates close a lot of transactions? The answer depends on your overhead. If you’re not paying for office space, you have a much better chance of clearing a profit than if you are.

The issue of office space won’t matter much if you’re hanging your license with another broker and letting that brokerage manage this cost while you split your commissions with the company. But if you’re the owner of the brokerage, how much more money can you keep if you’re not spending on office space?

The question will take on increasing urgency in the years ahead because more of your competition have no office costs to manage. According to NAR research, between five and 10 percent of your competition today can be defined as virtual brokerages, meaning the agents work out of their home or remotely so brokers don’t have to absorb office costs. That percentage is expected to jump to 50 percent in coming years. That’s when your cost structure becomes particularly important, because you’ll be competing with brokers whose costs are structurally lower than yours by significant amounts.

The issue is touched on in the latest Voice for Real Estate news video from NAR. In the video, the person who heads NAR’s survey operation talks about what the association found when it asked brokers about their business models.

The video also looks at NAR’s Call for Action on flood insurance. For many real estate professionals, flood insurance is someone else’s problem because they don’t have to worry about floods. But far more areas are in designated flood zones than you might expect. The number will change as new flood maps are drawn, but right now about 22,000 communities throughout the country—in every state, in fact—are in flood zones. That means lenders can’t close loans unless the buyer has flood insurance. And that’s where the federal flood insurance program comes in. The number will vary based on area, but in many markets, there are essentially no private insurers, and those that are in the market are expensive. As a result, federal insurance is the main source of coverage. If that goes away, thousands of transactions each day won’t be able to close.

How close are we to losing that insurance? About five weeks. The National Flood Insurance Program has to be reauthorized by the last day of September.

The good news is, the House has a widely supported bill that’s been reported out of the House Financial Services Committee. It awaits consideration on the House floor. NAR supports the bill and is encouraging its members to take a few minutes to send a letter to their member of Congress. The letter’s already written. It’s just a matter of going to RealtorActionCenter.com and clicking a few buttons.

The video also looks at the potential impact big technology companies could have in real estate in the years ahead. When we think of tech companies in real estate, we might think of realtor.com or other listing portals like that, but now really big companies are ready to make money in real estate. Amazon and Facebook are two of them. The way they want to make money differs from the way listing portals do, but their presence will be felt. The question is, does organized real estate cooperate with them or try to compete with them?

No answer will be straight forward, but it’s the kind of thing NAR’s leadership is grappling with. NAR President-elect Elizabeth Mendenhall and NAR CEO Bob Goldberg talk about the challenges and opportunity these new players in real estate pose to the industry.

The video also looks at a scam that’s hitting real estate, although it might be subsiding by now. Under this scam, the perpetrator poses as NAR and sends a text saying you owe a fine for an ethics violation or you just won a prize and you need to pay some taxes on it.

If you read the texts carefully you can’t help but see they’re frauds. They’re riddled with errors and say things that no professional organization would say. But sometimes you’re in  hurry and you just skim the text or you go to delete it and you accidentally hit reply, potentially giving them information you didn’t mean to.

This scam will likely disappear soon, if it hasn’t already, but you can be sure more scams are in your future. They’ve simply become a fixture of digital communications. You just need to be  aware of them, and while these latest text scams are riddled with errors, the next ones might not be. They might look quite real. All you can do is get in the habit of taking a second look at communications you didn’t expect to receive and do some checking before you act on them. That’s the case whether the communication comes as a text or an email.

Watch and share the video.

 

 

 

 

Staging: More Money, Fewer Days on Market, Report Shows

Thu, 08/17/2017 - 10:55

To many real estate pros, home staging has gone from a luxury to a necessity. The National Association of REALTORS® found in a recent survey that sixty-two percent of sellers’ agents believe staging a home decreases the amount of time a home spends on the market, and a third say it increases the selling price.

The survey also found that staging can help buyers envision themselves living in that home. NAR’s Home Staging Report found that another 77 percent say that staging makes it easier for the buyers to visualize the property as their home. Staging can help transform a home into the type of residence that is demanded and desired in the market.

Some staging services that can be useful include photoshoot styling services. This involves prepping and photographing staged living areas to be featured in an online listing. This staging service is attractive because many home buyers are beginning their home search online and a nicely designed home can draw a buyer to the open house. Independent of how the market is, a staged home has a move-in ready feel and buyers will pay for it.

Of course, these benefits don’t come free. Staging services can cost hundreds or even thousands of dollars depending on the home’s condition, desired outcomes, size, and where it is and whether it is occupied or vacant. But home staging doesn’t have to involve a complete makeover. As NAR’s 2017 Profile of Home Staging shows, there are really three rooms one should consider staging: living room, kitchen, and the master bedroom.

Home buyers decide within eight seconds of seeing a home whether they like a home or not, according to the Real Estate Staging Association. That first impression can be long lasting. To help you learn more about the topic, we spoke with an NAR researcher and a Chicago-area stager and report on what they say. Access the video. 

Sponsor Webinar: Win Listings and Sell Them Quickly with 3-D and VR Technology

Mon, 08/14/2017 - 13:59

Real estate professionals looking to outsell their competition are turning to 3-D and virtual reality technology to help them win listings, connect with home buyers —and close sales.

Among the options is an all-in-one media solution from Matterport that enables agents and brokers to create dynamic 3-D house tours with embedded video and audio, immersive virtual reality walkthroughs, high-resolution photography for print advertising, traditional 2-D floor plans, teaser videos, and more, from a single shoot. With Matterport’s easy-to-use technology, you can integrate 3-D and virtual reality technology into your marketing for the same cost of a traditional 2-D photo shoot, and in about the same amount of time. This means you can spend more time winning listings than generating marketing assets.

By combining traditional marketing techniques with sophisticated 3-D and virtual reality technology, Matterport has become an effective tool for real estate professionals. One RE/MAX agent improved her listing conversion rate from 60 percent to 95 percent, while another from Keller Williams hasn’t lost a listing since using Matterport’s technology to build listing presentations. An Alain Pinel broker says his agents are winning listings that might otherwise have gone to competitors by using 3-D tours in their listing presentations.

This technology does more than win listings. Matterport’s tool also helps sell houses and build your brand. You can share every digital asset created with the Matterport system quickly and easily across all of your online channels to reach buyers from anywhere. One RE/MAX agent said she used the system to sell two homes to remote buyers who never saw them, and reduced the amount of time it takes her properties to sell by 56 percent. You can use the tool yourself or connect with a service partner who can do the work for you.

You can learn more about using 3-D and virtual reality technology in your real estate business by viewing a webinar featuring Mark Tepper, vice president of Matterport, and Paul Grasshoff, a senior account manager for the company.

REALTOR® Magazine is promoting this webinar, but did not participate in the development of the content.

Source: Matterport, an immersive media technology company, contributed this post to let agents and brokers know about a webinar it’s sponsoring on how 3D and virtual reality technology can help them stand out.

Typical Commercial Agent Now Makes $120,800

Mon, 08/07/2017 - 13:09

Commercial prices continue to head up, at least among smaller properties in secondary and tertiary markets. As a result, the typical commercial agent is making $120,800, an 11 percent increase from the previous year, when the median income was $108,500. The income gains come even as agents on average are doing fewer deals, eight as opposed to nine. These are among the findings from NAR’s 2017 Commercial Member Profile. Another finding: Agents are more experienced. The typical agent has been working in the business 24 years now.

The profile just looks at commercial agents who are members of NAR. These are not typically agents who work on big transactions, like those involving skyscrapers in big cities. Rather, these are agents who do smaller deals, typically under $2 million.

Details of the commercial profile are a top story in the latest Voice for Real Estate news video from NAR. Another story looks at sustainability. That’s a topic that seems remote to many agents. While promoting sustainability might be a good thing in the abstract, why would an agent care about it from a business point of view?

That’s a good question, and that’s one of the questions NAR was trying to answer when it hosted a sustainability summit two weeks ago in Washington. The summit was a typical Washington event, in which experts from around the country are brought in to talk about an issue. In this case, though, there was an emphasis on the concrete: how does sustainability affect the business agents are in. Do they make more money? Are households demanding sustainability in their housing choices? The answer appears to be yes on both counts. Research shows houses with green features, like solar panels, fetch higher prices in the market. And consumers are increasingly asking to look at listings that showcase green features.

The video also looks at the bipartisan cooperation on an issue of vital importance to residential home sales: the availability of federal flood insurance. Although there are several hurdles that have to be gotten over before federal flood insurance is renewed, NAR and lawmakers on the House Financial Services Committee agreed to improvements to the bill that will reauthorize the National Flood Insurance Program. Under the agreement, home owners who live in an area that’s been newly designated as a high risk for flooding won’t find their insurance premiums suddenly going up. Instead, they’ll be grandfather in under their old rates. The agreement also imposes a cap on how much existing owner’s premiums can increase at any one time.

Other stories in the video look at the latest home sales trends, how you can connect to NAR’s new CEO, and how you can stay safe while meeting new clients . Access the video now.