By Robert Freedman, senior editor, REALTOR® Magazine
Commercial economic update
Lack of financing will continue to hamper commercial real estate transactions going into 2011 but there are some positive signs on the horizon, NAR Chief Economist Lawrence Yun told REALTORS® last week at the NAR Conference & Expo in New Orleans.
Right now there is a lack of buyers for commercial properties in all sectors but that’s a function of the tight lending environment, not of a lack of interest in deals, he said. With cap rates on properties in the different sectors averaging about 9 percent, there will be no shortage of buyers once lenders start easing credit availability, he said.
Yun thinks that could happen as soon as next year, because lenders are sitting on plenty of cash from strong profits and pressure could be building for them to start deploying that cash. At some point, he said “they must get back into the business for which they were created, and that’s making loans.”
Separately, Hugh Kelly of the University of New York said later in the same session at which Yun spoke that the commercial mortgage-backed securities (CMBS) market is making a small but steady comeback, and appeared poised to reach a significant amount soon, suggesting a growing appetite among investors for higher-yield investments. “Investors want to get back into riskier investments,” he said.
By Brian Summerfield, Online Editor, REALTOR® Magazine
In a time marked by political upheaval and controversial and indecisive military actions, the U.S. economy takes a sudden dive, resulting in massive stock market losses and unemployment around or above 10 percent. That description could apply to 2006-2010, says Forbes Magazine Publisher Rich Karlgaard, but it could also refer to 1972-1976.
In his Entrepreneurial Excellence presentation today at the 2010 REALTORS® Conference & Expo, Karlgaard compared the two eras. As with the early to mid-1970s, the past few years will likely be remembered as a rough patch for the United States, politically and economically speaking.
However, if you’re wondering if the good times are really over for good, as many people did back then, take heart. Although the first half of the 1970s was a turbulent time, Karlgaard said, in retrospect we can see that it was also a period of substantial economic restructuring, and a great time for entrepreneurship: FedEx, Southwest Airlines, Microsoft, and Apple were just a few of today’s major companies that started during that decade. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
Tucker Carlson
The Democrats took the thumping in national elections last week, but it might be establishment Republicans who take the next thumping—at the hands of the Tea Party, popular political commentator Tucker Carlson told a packed room of REALTORS® at yesterday’s Legislative & Political Forum.
Carlson called the Tea Party the most energetic and dynamic force in American politics today, and its ranks are filled with voters who refuse to compromise on the need for the federal government to cut its ballooning budget deficit. That idealism, he said, will run smack into the need for Republican lawmakers to forge compromises with President Obama and Democratic lawmakers to get things done.
Gov. Chris Christie
This “civil war,” as Carlson called it, could help President Obama in the short term, but in the long run it provides an impetus for lawmakers to get serious about getting the government’s fiscal house in order. Carlson thinks a Tea Party-fueled Republican base will nominate proven budget-cutter New Jersey Governor Chris Christie to run against Obama for president. Christie, he said, will look into the camera and tell the American people, “You spent too much and so did I,” and then propose cuts to get the country back on track.
In more ordinary circumstance former Massachusetts Governor Mitt Romney would be the Republican nominee, Carlson said. But the willingness of Tea Partiers to stand on principle, even at the cost of winning an election, as they did in Delaware with Republican nominee Christine O’Donnell, suggests these aren’t ordinary circumstances. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
What’s impeding your market? In the Atlanta area, the big drag is distressed sales. Paul Brower, ABR, GRI, of Harry Norman, REALTORS®, in Marrietta, says the market is improved over last year and is expected to improve even more in 2011, but the metro area is trying to absorb the addition of 1,500 foreclosed properties each month. Until that overhang starts to ease, he says, the market can’t decisively turn around.
Sheila Pierce, CCIM, a broker who just sold her residential brokerage in Jacksonville, N.C., and now does mostly commercial work and consults for the area economic development agency, says her market was cushioned from the downturn by Camp Lejeune, the big Marines base there. First-time and new-home buyers have remained steady, but traffic of upper-income buyers is weak—and probably will stay weak until other parts of the country improve. Because right now, she says, relocating buyers that can’t sell their exuisting homes are having to rent.
Practitioners in resort areas say they’ve been seeing an increase in buyers with the means to pay in cash, which has helped sustain their markets in the last two years. That’s been evident in the affluent Lake Tahoe area, says Debra Howard, RSPS, CRS, of D. Howard & Co., in So. Lake Tahoe, Calif. But now her market is getting another boost. Thanks to lower prices (they’re down about 35 percent from their peak), the market is seeing an influx of lower-income buyers, including among those who work in the area.
In the short video above, practitioners talk about where things stand in their market areas.
By Robert Freedman, Senior Editor, REALTOR® Magazine
The Federal Reserve’s move to boost the economy with $600 billion in U.S. Treasury bond purchases earlier this week helped ignite the stock market and could also help real estate in the short term if businesses follow suit by adding jobs.
NAR Chief Economist Lawrence Yun told REALTORS® at the 2010 Conference & Expo today that job growth is key to getting home sales back up to where they should be based on historic norms. Although housing markets are steadily improving and prices are stabilizing, home sales remain at levels last seen in 2000, when the U.S. had 30 million fewer people.
Yun says weak consunmer confidence, which is a function of continuing high unemployment (about 9.6 percent currently), is behind the lag, so anything that can boost job growth could help home sales.
But the latest Fed stimulus could come with a cost, says Federal Reserve Governor Thomas Koening. Joining Yun at the REALTORS® conference to talk about the residential housing market, Koening said continued efforts to stimulate the economy could spark inflation, particularly with the federal budget deficit already at historically high levels. Koening was the only Fed governor to vote against the new stimulus. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
When you look at the success of FHA over the last few years since the downturn you have to wonder what’s up with the banks.
Although the agency has had its credit challenges it never lost sight of the tough times borrowers face in the market today.
A case in point is its credit score policy. Even for struggling households whose credit score is as low as 580, the agency will back their mortgage as long as they’re buying their primary residence and they can show they’re prepared to be responsible home owners—and they can still get a low down payment.
FHA’s reward for this policy, if you can call it that, is a 30-percent market share and a continuing sound financial position, notwithstanding the chatter in the media earlier this year when it took steps to boost a secondary reserve after it dipped below a congressionally mandated level.
You see nothing like this with the banks, despite the tens of billions of dollars they received from the federal government under the Troubled Asset Relief Program (TARP) and the Federal Reserve’s $1.25 trillion investment in mortgage-backed securities.
Banks today will hardly look at borrowers with credit scores below 650. And for those with scores as low as 620, households probably don’t even get the option of submitting an application.
This is more than a shame for the borrowers, many of whom, as FHA has demonstrated, are well prepared to be home owners; it’s an unnecessary constraint on home sales. Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
The biggest and most important real estate convention rolls into the Big Easy this week, and the excitement in the air is as palpable as the humidity. With engaging sessions, top-notch vendors, and nonstop networking opportunities, this year’s REALTORS® Conference & Expo looks to be hotter than a bowl of voodoo chicken.
Right now, the results of the midterm congressional elections are on most people’s minds. With returns coming in this evening, we face the distinct possibility of a shake-up in the national political picture. Well-known commentators and former Crossfire counterparts Tucker Carlson and Paul Begala will offer their perspectives on what we can expect from the 112th United States Congress in the Legislative & Political Forum on Saturday.
Additionally, the prospect of an economic turnaround is an important concern for REALTORS®. NAR Chief Economist Lawrence Yun will provide assessments and predictions regarding recession and recovery in the Residential and Commercial Economic Forums on Friday. Also, Forbes magazine publisher Rich Karlgaard will discuss economic pitfalls and opportunities in the coming years as part of the Entrepreneurial Excellence Series (EES). Continue reading »
By Todd Carpenter, Social Media Manager, NATIONAL ASSOCIATION OF REALTORS®
I admit it. I get to work on some really cool stuff:
Available for the first time in a classroom setting, the new e-PRO® gives you a roadmap to build your business and serve the hyper-connection consumers of today and tomorrow. Learn about the changing market and how to connect with consumers, manage your online reputation, generate leads and gain referrals by signing up for Day 1 of the certification course, offered prior to the 2010 REALTORS® Conference and Expo in New Orleans on November 4, 2010. For more information on e-PRO® and to find a course in your area, visit REBAC.net
Earlier this year, I was lucky enough to sit down with REBAC representatives, a few bright members of the Young Professionals Network, and the Social Media Marketing Institute (SMMI) team to hash out an outline for a ground-up rewrite of the e-PRO® certification program. The course covers cloud computing, Web applications, mobile, online brand management, and, of course, social media. Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
Yesterday, I had the pleasure of talking to Olympic gold medalist Mary Lou Retton, who will be speaking at the REALTORS® Conference & Expo in New Orleans from Nov. 5 to 8. I have no doubt that she will be a very dynamic and memorable speaker.
The passion and the heart that led to her to compete — and take gold — in the 1984 Olympics after surgery, and against doctors’ orders, is still very present.
Recent Comments