Scott Louser is broker-owner of Preferred Minot Real Estate in Minot, N.D., and a representative in his state legislature. He was also a delegate to the Republican National Convention in Tampa this past week and said being there gave him an unprecedented opportunity to talk to members of Congress and their staffs one-on-one about protecting real estate.
“It’s one thing to be addressed in a large group and another thing to be one-on-one with a congressman or a senator,” he says.
In addition to the hats he wears as a convention delegate and a state legislator, he is also NAR’s vice president and liaison to government affairs. In that role, he works with other NAR leaders and members to help NAR government affairs staff articulate NAR’s legislative and regulatory priorities to members of Congress and federal regulators.
“Lawmakers “want to hear what’s going on in [your state] and they listen to our issues at the national level,” he says.
Louser took a few minutes out of his covention schedule to share a few thoughts with REALTOR® Magazine on the effectiveness of REALTORS®’ involvement in helpng to protect real estate.
TAMPA, Fla., Aug. 29—Sen. Johnny Isakson (R-Ga.) said at a policy forum here yesterday during the Republican National Convention that real estate is the core issue in this year’s national elections. “This is the most important discussion at the convention,” he told a packed audience of real estate, mortgage finance, and other industry representatives at a housing policy forum sponsored by NAR and more than a dozen other national real estate organizations.
No matter who comes out on top in November, the administration will have to make crucial decisions in 2013 on how to revamp the secondary mortgage market and deal with regulators whose proposed rules could derail the country’s slow recovery by hurting the availability of mortgage financing.
Rep. Michael Turner (R-Ohio), who joined Isakson at the forum, said out-of-control federal spending is choking off private enterprise and everything needs to be on the table after the elections to rein in federal debt. But he also said the mortgage interest deduction and other federal housing priorities remain among the most popular provisions with lawmakers.
“There’s pretty universal support for the mortgage intrerst deduction,” he said.
The forum was just one of hundreds of events taking place in Tampa through Thursday as thousands of delegates, lawmakers, and others from around the country participate in the convention. The Democrats will be holding their convention in Charlotte, N.C., next week. In the 2-minute video above, NAR leaders and REALTORS® who are delegates to the convention talk about the political process and the impact REALTORS® are having protecting real estate by getting involved in political activities at the local, state, and national levels.
Florida REALTORS® next month will be rolling out a home price index that tries to give its members a clearer picture of price movement than you can get in an index that tracks changes in the median home price, which is what a lot of price indexes do. It’s an ambitious and complicated undertaking, and it’ll take some time for the database to be robust enough to really give a clear picture of what’s happening, but the effort is promising.
Florida REALTORS® new index will be what’s known as a same-sale index, which means it’ll track sale prices of the same houses over time, so when prices go up or down in the aggregate, you’re seeing actual changes in the value of the same basket of assets over time. This provides an important distinction from indexes that look at changes in the median price, because lots of factors can influence changes in the median price, including changes in the mix of houses being sold.
In a median-price-based index, for example, most of the sales one month might be of homes in the lower price points; the next month, they might be mostly of higher-end homes. That would show a rise in the median-home price when in fact the price change only reflects a change in the mix of houses that were sold. A same-sale index corrects for that because you’re seeing actual appreciation or depreciation in value of the same houses.
That’s the ideal, at any rate. Like any index, you still have to make assumptions and remove from the data anomalies that can distort what’s happening in the market. For example, you have to be able to identify house price increases that stem from, say, a renovation or addition. If a house in 2008 sells for $200,000 and in 2012 sells for $300,000, a 50 percent increase, it presents an anomaly that you have to account for if prices of other houses in the area go up only 10 percent during that same period.
So, the tracking program has to be able to identify anomalies like that and remove them from the database. Other types of anomalies might be non-arm’s-length transactions, in which a family member sells a house to another family member for a below-market price, or a house that becomes damaged in a storm, so its drop in value isn’t reflective of changes in the market.
Setting up a program to track these anomalies in the database is one of the challenges to making the same-sales index work. “You have to have someone who’s familiar with working with large databases and you have to have someone who’s adept at programming, so they can in fact [scrub] the data and get the index correct,” says John Tuccillo, Florida REALTORS® chief economist, whose team is producing the new index. Tuccillo is a past NAR chief economist.
For the Florida effort, the team is using publicly available data going back to 1995 from the state’s Department of Revenue, and they’re now adding in the latest available data from that source, which is from 2011.
Using this data comes with another challenge. Although it’s accurate because it reflects closed sales, it takes a while before the data is available. The Florida REALTORS® team is adding 2011 data only now because that data was only just made available—more than six months into the new year.
Tuccillo says they’ll address this time lag going forward with quarterly updates using state MLS data, which they’ll square with the actual 2012 numbers once the state’s data becomes available in the middle of next year. “Going forward, we’re going to use tax identification numbers to link the MLS database into our Department of Revenue database,” Tuccillo says. “So, we can update the index quarterly by sampling out of MLS. We can do enough of a sample to get a good idea of what’s happening with prices. A year from now, when 2012 data is available, we’ll be able to do a revision of the index using the entire population [of data].”
None of this will change the way the association tracks home sales volume; it’ll continue using MLS data to track that. But by using its new same-sales method on pricing, REALTORS® in the state can anticipate getting an informative picture on where the market is going.
You can read more about Florida REALTORS®’ new index on the association’s website.
Signs continue to come in that the housing market is seeing slow but steady improvement, although overly tight lending standards continue to hold back the market given the amount of pent-up demand that’s out there.
Existing-home sales increased 2.3 percent in July from a month earlier to a sales pace of 4.47 million. The new pace is more than 10 percent above where it was at this time last year.
And the median home sales price is up significantly as well, to $187,300, or 9.4 percent higher than this time last year, although NAR Chief Economist Lawrence Yun in his monthly press conference in Washington yesterday attributed the gain to an increase in sales of high-cost homes. Sales of homes at the $100,000 or less price point declined nationally, reflecting the continuing shortgage of distressed and other inventory in markets around the country.
The trend is in the right direction, and given the constraint buyers face in obtaining financing, the growth in volume and in price is encouraging. But the picture could be considerably brighter, Yun thinks, if lenders returned to more normal underwriting standards–that is, standards that were in place for years prior to their loosening in the housing bubble years. As it stands, lenders have tightened way too much in response to the market excesses several years ago.
“Housing could easily be much stronger without these abnormal frictions.” he said in his statement released with the latest sales figures yesterday.
If you ever wondered whether getting involved in political activities is worth your time, consider the impact your real estate colleagues Shirley Wiseman and April Newland, among others, have just had on an issue that impacts more than 70 million home owners and the millions of households hoping to buy a home in the coming years.
These two real estate professionals, along with others in real estate who are serving as delegates to the Republican National Convention this year, pushed through language in their party’s platform that explicitly calls for protecting the mortgage interest deduction—this in a year when platform writers are underscoring support for comprehensive tax reform.
The Republican platform four years ago also referenced MID, but it was in the context of a broader set of principles on housing. “Because affordable housing is in the national interest, any simplified tax system should continue to encourage homeownership, recognizing the tremendous social value that the home mortgage interest deduction has had for decades,” the platform said.
But this year—in fact, just yesterday—Wiseman, Newland, and others won approval for language that explicitly puts Republicans on record pledging protection of MID, although it first gives a nod to the party’s priority to seek comprehensive tax reform. If that doesn’t pass, protecting MID is paramount.
“I read the platform and there was nothing in it about the mortgage interest deduction, so I offered that as an amendment,” says Wiseman, president of the McVay Group in Lexington, Ky., and a member of the government affairs committee of the Lexington-Bluegrass Association of REALTORS®. Wiseman is also a past president of the National Association of Home Builders and was an FHA official in the mid-1980s.
The language passed easily after she rewrote her original version to reflect the priority the committee wanted to put on comprehensive tax reform. “I opened my statement with the fact that I submitted this amendment on behalf of the 70 million home owners who depend on the mortgage interest deduction to make it comfortable for them to make their payments,” she says. “This deduction is used by middle America. It came to a voice vote and it wasn’t even close. We won. I think it was one of the most important things to come out of the platform, because it is very significant. It’s very strong language and I am absolutely thrilled.”
April Newland, owner of Newland Real Estate in St. Thomas, Virgin Islands, seconded the motion on Wiseman’s amendment and joined other delegates to help push it to passage. Newland has been a delegate to the Republican convention for decades.
Every single provision in the tax code is fair game as lawmakers next year look at how to put the federal government onto a path to eventual balance. Not even a provision as widely popular on a bipartisan basis as the deduction for mortgage interest can be taken for granted. By getting their party’s explicit endorsement to protect MID, Wiseman, Newland, and their colleagues have notched an achievement that matters to every home owner and buyer. “We need the message out that all politics is local,” says Wiseman. “Get involved at home, then you can pursue state and national. It’s so important.”
Republicans writing their party platform for their upcoming 2012 convention in Tampa next week inserted language specifying their support for the mortgage interest deduction. As described in a piece in the Wall Street Journal today, the language says that, “if the GOP failed on tax reform it would favor the retention of the mortgage-interest break.”
This is a clear victory for home buyers, home owners, and the economy, because it specifies that Republican lawmakers favor the retention of MID.
Based on the WSJ report, the first part of the provision suggests Republicans will pursue some type of tax reform. Whether that would include changes to MID can’t be known, but the fact that they specifically expressed support for MID is certainly an endorsement of this 100-year-old tax benefit.
The Wall Street Journal sees the language as something less than a win for home owners, because sponsors of the endorsement originally wanted it separate from any talk of tax reform. Given the climate today, in which lawmakers will be facing the enormous job of trying to put the federal budget on a path to balance, the fact that an explicit endorsement of MID was included in the platform is a victory, pure and simple.
The Journal goes on to point to the federal government’s historic support of home ownership as an underlying factor in the housing bust several years back. That’s an argument it’s made before. But the assertion has never made much sense, since MID has been around for 100 years—that’s 17 presidential administrations—and throughout that time the housing market on a national basis has been an indisputable source of stability in the economy.
That’s something delegates to the Republican platform committee clearly recognized in expressly endorsing the preservation of MID.
Jamaican sprinter Usain Bolt captivated audiences with his speed and charisma during the 2012 Summer Olympics. You may have noticed “The Fastest Man in the World” slows his steps ever so slightly when approaching the finish line during his individual events, confident that he had clinched the win. But in the team relay, he never let up as he ran full speed through the finish line. NAR Chief Economist Lawrence Yun attributes this to the team-mentality. Studies have shown that athletes often perform better in a team environment, he said.
REALTORS® also belong to a team, and consequently should work for the betterment of the industry and attainability of home ownership, Yun said during the economic update at the NAR Leadership Summit in Chicago Tuesday. Despite the fact that the economy is growing, the nation’s mobility rate has slid and owner-occupied sales are still stalled. Thus, the teamwork of REALTORS® is needed more than ever.
“Once you have the baton, you have to be the fastest runner in your association,” Yun said to the audience of REALTOR® association leadership and staff executives. “We have to get America moving again.”
Existing home sales came in at a seasonally adjusted annual rate of 4.37 million in June, up 8 percent year-over-year. Investors coming into the market account for many of those sales, but Yun called the growth “only a slight increase compared to what it could be.” Investors are needed, but Yun said he wants to see less hindrance for owner-occupied buyers, such as reevaluating the stringent underwriting standards from lenders that have been a stumbling block preventing buyers from entering market. Continue reading »
Today, HGTV is in 99 million American households and 170 different countries worldwide. Its gabled-roof branding is recognizable by nearly every channel surfer in the nation. It is how many consumers learn what they know about home ownership.
“Would people think this was as exciting as watching paint drying?” she wondered aloud in front of an audience of real estate professionals at the NAR Leadership Summit Tuesday morning.
Packard’s Leadership Summit presentation, Now What? Creativity, Innovation & Leadership, recalled some of the setbacks and successes of HGTV, with the hopes of passing those lessons on to Leadership Summit attendees.
One of the lessons was something HGTV had to teach the industry. Back when they were just getting started, they approached Better Homes and Gardens and offered to be their new multimedia arm, allowing greater reach for the magazine but without the competition in their own market.
“And they politely declined. Why did they need us?” Packard recalled. Yet now, with Better Homes and Gardens reaching a small fraction of the audience that HGTV pulls in, Packard says it only goes to show that you should never “underestimate a competitor” and always “proactively seek partners.”
Of course, HGTV had its fair share of slip-ups on their way to the top. When the brand tried to get into the home shopping market by purchasing Shop at Home, a fledgling home shopping channel, Packard notes that the venture did not play to their strengths. Continue reading »
In less than four minutes on a chilly January afternoon back in 2009, U.S. Airways Capt. Chesley “Sully” Sullenberger made a series of focused, yet impossibly calm decisions that saved the lives of 155 people. “I had to set priorities. And thanks to a lifetime of training, I was able to synthesize what I knew to solve a problem I had never seen before.”
A flock of Canadian geese disabled the Airbus aircraft shortly after takeoff from New York’s LaGuardia Airport, forcing Sullenberger and his crew to make an emergency landing in the Hudson River. Beyond the extraordinary skill required to land the plane safely in the frigid waters, Sullenberger was hailed for his personal commitment to ensuring that every passenger and crew member was safely evacuated.
As the concluding speaker at the NAR Leadership Summit on Tuesday, Sullenberger noted that he spent those critical moments before the landing neither thinking about his family nor praying, but rather concentrating single-mindedly on getting the plane and his passengers through the ordeal. “I had to focus on the task at hand, despite the stress,” he explained. “I only did the highest priority items and I had to do them well. This required the discipline to ignore everything else.”
In many respects, this was the day he had been training for during four decades as a pilot. “My first thought was, ‘This can’t be happening.’ Things like this don’t happen to me. I had never faced a situation in 42 years that I couldn’t immediately resolve.”
Sullenberger’s feat in the cockpit, widely described as “miraculous,” has led to a new career as an author and on center stage, in which he reflects on the attributes and experience that led to the successful outcome. “Never stop investing in yourself. Never stop investing in learning,” he said. “We have to keep growing and we have to keep reinventing ourselves. And change before you are forced to by circumstances.”
A longtime leader to improve the already exemplary professional standards in his industry, Sullenberger noted that he had been working for years as a safety advocate before he became an instant media hero. “Remember that your reputation is built on one interaction at a time, one day at a time. With each interaction, there is an opportunity for good, ill, or indifference. We have to choose which it is going to be.”