When we look back on 2012 a long time from now, it may be viewed as the first year of the recovery, the year in which real estate reversed its course and moved in a more positive direction.
With that in mind, here are 13 reasons — courtesy of REALTOR® Magazine’s online news — why real estate pros can look forward to next year:
1. There’s greater optimism about increasing home values.
2. More new households are forming.
3. Home shoppers are feeling a greater sense of urgency.
4. Home ownership remains a goal of members of the Millennial generation.
5. Foreclosure starts are falling to pre-housing-bust levels.
6. Interest rates should remain low through next year’s selling season.
7. Loan demand for home purchases is climbing.
8. More Americans say it’s a good time to sell.
9. The number of improving housing markets is going up.
10. Job creation is expected to provide a much-needed boost to the commercial sector.
12. As housing values rise and equity returns, fewer home owners are underwater.
13. Real estate is contributing to an overall economic recovery.
That’s not to say there aren’t challenges. Lending remains tight, there’s a large foreclosure backlog, and regulatory challenges and the fiscal cliff loom ahead. But on balance, real estate appears to have a bright future in 2013.
When Paul Yorkis was young, his mother took him to the Democratic Party headquarters and asked him to stuff envelopes in support of Adlai Stevenson who ran for president twice during the 1950s.
“It was fun and people were happy I was there,” said Yorkis, president of Patriot Real Estate in Medway Mass., a member of the Massachusetts Democratic State Committee, a Democratic National Convention delegate, and national chair of the non-NAR affiliated REALTORS® for Obama.
That experience as a child was formative for Yorkis, who continued to explain that politics is deeply rooted in the lives and culture of those living in his home state of Massachusetts. “In Massachusetts, there’s a few sports – the Red Sox, the New England Patriots, the Bruins, the Celtics, and the other sport is politics.”
Yorkis decided to become a delegate representing Massachusetts at the DNC in Charlotte, N.C., last week, because real estate – among other issues – needs to be represented and addressed at the federal level. He knows how important it is to keep housing front and center when talking to lawmakers – especially the accessibility of the American dream of home ownership, as Yorkis himself experienced homelessness for a short time as a child.
“REALTORS® do amazing things. The reason I’m at the convention is because I believe it’s the little stuff that has the ability to impact politics,” Yorkis said.
Yorkis did leave his mark at the DNC. He submitted testimony to the drafting and platform committee of the Democratic National Committee. Part of the platform deals with housing and the last sentence of the approved platform was adapted from Yorkis’s testimony. It states: “The president remains committed to creating an economy that’s built to last, where home ownership is an achievable dream for all Americans.
Yorkis was one of approximately 20 REALTORS® who served as delegates at the DNC this year. This video looks at how members of the National Association of REALTORS® had an impact that the convention and why political involvement – whether it be Republican or Democratic – is vital to the real estate industry.
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
It took me some years to figure this out: The moment you take something for granted, you’ve lost it. I’ve had to learn this lesson enough times when it comes to the most important things such as health, relationships, jobs, and even homes. I think many people, sadly, had a fresh awakening about taking housing for granted as Hurricane Irene battered much of the East Coast this past weekend.
I am scheduled to ride the Home Ownership Matters Bus for the next two weeks. I left for Connecticut on Friday to attend an event on Saturday. I knew that I was essentially flying to a hurricane to get stuck in it. I kind of liked the idea of having a front row seat for mother nature’s extremes.
Connecticut was declared a state of emergency Saturday morning and alas, they canceled the event. I immediately went into my version of survival mode and headed to the grocery store to stock up on water, batteries, a flashlight, and food. I learned that Pop Tarts were the most in-demand hurricane food and were sold out at both grocery stores I went to. My mother lived through Hurricane Gloria in 1983 and remembered that parts of Connecticut were without power for up to a month. I didn’t know what to expect. Continue reading »
Editor’s Note: REALTOR Magazine welcomes guest blogger Jeremy Conaway with his take on the proposed Political Survival Initiative. Conaway is an expert in the field of real estate brokerage, association, and MLS design, and a leading strategist in the real estate industry.
By Jeremy Conaway, President of RECON Intelligence Services
This is a time of challenge for all Americans. We live in a environment ravaged by a recession that seems to defy recovery, made confusing by a global economy that seems to take as much as it gives, a generational mash-up that seems to defy compromise, and a tsunami of knowledge that keeps us in constant confusion by “invading” every aspect of our personal and professional lives. This is the very definition of a renaissance, a time of reawakening and renewal, an environment in which opportunity is the key element.
Nowhere have these forces impacted as significantly as they have in our real estate industry. It is almost impossible to find a single geographic area, market segment, or professional group that isn’t dealing with massive shifts, transitions, and changes in one or more of its most basic and critical operational elements. The cause of each of these “life quakes” can be traced to some combination of the current economic, regulatory, demographic, generational, and knowledge forces that are sweeping across the American political, business, and cultural landscape.
The men and women who are experiencing these events as REALTORS® tend to communicate one of two reactions and responses to their representatives within organized real estate. The first reaction comes from a group that sincerely and honestly believes that the current economic, market, and consumer-centric environment can be likened to a bad storm, and that the best response is just to chill out and let it pass. Life’s experience has taught them that, sometimes, “waiting it out” is the best response to a threatening situation. This group wants organized real estate to protect their position during the storm and preserve a marketplace that will allow them to continue their traditional practice once the storm has passed. It cannot be denied that sometimes the best solution to stress and trauma is just to take a nap and live to deal with it another day.
The second reaction comes from a group that sincerely and honestly believes that success and survival in a renaissance requires them to be in the middle of the fray. For this group, satisfaction comes from being armed with the best technology, a winning strategy, and the ability to mount a courageous campaign into the middle of the social media battleground. For these connected warriors the entire battle takes place somewhere between the software and the Internet. If it cannot be reduced to a blog, a ‘tweet’ or an ‘app’, the challenge just doesn’t exist.
It is against this backdrop that a group of industry consultants and NAR staff convened in Chicago to consider the REALTOR® future – the varying needs, expectations and, indeed, demands of the NAR membership. Finally one member summed up what we all agreed was the very essence of our long discussion: “It is like we are caught between providing a nap and an app.” Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
Recent news stories have pointed out that increases in the value of commodities such as oil and food may lead to alarming levels of price inflation. At the same time, the cost of renting has gone up, and is expected to surge even more this year.
As rising prices gobble up more of the American consumer’s budget, buying a home will be a more attractive proposition. Values have fallen precipitously these past few years, which initially — and, some would say, justifiably — damaged the perception of homes as an investment. But now, affordability is looking as good as it has in decades, especially in relation to renting. In fact, in many metro areas, it’s now considerably cheaper to own than rent.
Combine these pricing trends with moderate improvements in employment, and we’ve got a recipe for a housing turnaround over the next couple of years, with a few caveats: Continue reading »
By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine
I was just reviewing proofs of our April/May issue — in which forecasters have predicted a steady rise in home appreciation through 2015 — when our publisher e-mailed me a link to “Real estate: It’s time to buy again” by veteran Fortune magazine writer Shawn Tully. Tully makes a convincing case that the moribund new-construction market, combined with rising rents and an improving job market, will result in increased demand for homes and begin to drive prices up. Even in many high-foreclosure areas, he says, the outlook is getting better.
All good news comes with caveats. Tully says consumer confidence and job growth still need to gain ground — and he allows that some markets won’t rebound quickly. But he provides a solidly positive report for real estate pros dealing with nervous and discouraged sellers and buyers. He writes:
“During the last decade’s historic run-up in prices, Fortune repeatedly warned that things were moving too fast. In a cover story titled “Is the Housing Boom Over?” [published in 2004], this writer’s analysis found that the basic forces that govern the market — the cost of owning vs. renting and the level of new construction — were in bubble territory. Eventually reality set in, and prices plummeted. Our current view focuses on those same fundamentals — only now they’re pointing in the opposite direction.
“So let’s state it simply and forcibly: Housing is back.”
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
A few of us from NAR have been travelling the country to follow the Home Ownership Matters Bus Tour as it visited in Chicago, Denver, and Portland and made stops along the way. I’ve documenting some of these events with video that we post on the Home Ownership Matters Web site.
The truth is, I wasn’t exactly sure what to expect. Would consumers understand the mortgage interest deduction (MID) is being threatened? Would they care about how Fannie and Freddie will be reformed? Do they understand how vital housing is to the U.S. and the economy? At REALTOR® Magazine, we don’t usually interview consumers, and so I wasn’t sure what I would hear. Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
When a draft version of the deficit reduction commission’s recommendations leaked to the press a few weeks ago, some observers used its release as an opportunity to pounce on the mortgage interest deduction (MID).
For instance, David Kocieniewski of The New York Times said, “The home mortgage deduction is one of the most widely used and expensive tax subsidies … Its size, popularity and link to the emotionally charged American notion of homeownership has made it so politically sacrosanct that there are serious doubts whether Congress will even entertain the idea,” and added that, “tax policy experts say that for all its popularity, the value of the deduction in public policy is debatable … Critics of the subsidy also argue that, despite its broad support, the benefits from the mortgage interest deduction flow disproportionately to the wealthy.”
Now, commentators of all political persuasions are reacting to various parts of an updated plan — including, once more, changes to the MID — that was unveiled this morning by commission co-chairs Alan Simpson, a former Republican Senator from Wyoming, and Erskine Bowles, who served as White House Chief of Staff under President Clinton. Specifically, they suggest:
- Converting the MID to a 12 percent non-refundable tax credit.
- Capping the mortgage amount at $500,000 (the current amount is $1 million).
- Eliminating credits for second residences and home equity.
It’s important to note that this not an official plan — yet. It’s intended to be an illustration of a tax system with some popular deductions removed. At this point, the sole formal recommendation is to limit the MID to principal residence. (Note: The co-chairs also advocate eliminating most or all tax expenditures, which could mean that the $250,000/$500,000 exclusion on the sale of a principal residence would go away, thus putting home sellers in a higher tax bracket the year they sell their houses.) The 18-member commission was supposed to vote on these recommendations today, but it was announced that they’ll postpone the vote until this Friday; any recommendation that will be formally made to President Obama must be approved by at least 14 members.
Interestingly, Simpson recently told NPR that he was worried about the resistance the National Association of REALTORS® would put up on potential elimination of the MID. “[T]hey’re going to kill this baby flat,” he said.
That effort has arrived. In a statement issued today, NAR President Ron Phipps said, “The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.” Continue reading »