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Commercial Earnings Grow With Healthy Market: NAR

Nov 18, 2018 by

In a sign of the times, commercial market prices are rising, but units are not.

According to the National Association of REALTORS® (NAR) 2018 Commercial Member Profile, on commercial REALTORS®, income and sales volume have tracked up, but deals have been on a downtrend. The annual average number of transactions tumbled to seven in 2017, from eight in 2016; earnings, however, reached a record $ 150,700. Meanwhile, the median sales volume was $ 3.87 million—a jump from $ 3.5 million.

The commercial market outlook is stable through 2019, thanks to an economy on a robust run, according to a forecast at NAR’s REALTORS® Conference & Expo, held this month. In the last eight years, prices ran up 93 percent—growth that, in all likelihood, will moderate over the next two or three years, the forecast showed.

“The commercial real estate industry is strong and is on pace with the growing economy,” explains NAR President John Smaby. “Although there is a slight decrease in transactions, commercial professionals have reported improvements in their markets and business activity for consecutive years. REALTORS® reported that sales volume and costs of sales increased this year, as well as median gross annual income.”

“Commercial real estate professionals are reporting great growth in the past year, which has convinced more and more members to enter the commercial industry,” notes Lawrence Yun, chief economist at NAR. “The economy expanding, along with [the] tight labor market, have boosted income for REALTORS® in the commercial space.”

Commercial is paralleling the residential side, albeit with higher stakes. RISMedia’s 2018 Power Broker Report, which is based on residential sales volume and transactions, found that while both sales volume and transactions trended up in 2017, deals lagged sales significantly.

The imbalance is indicative of the inventory shortage, which is only now slightly unwinding, as well as the fact that more are entering the profession.

Experience Matters
According to the Commercial Member Profile, brokers and broker associates had the highest incomes, at $ 186,900 and $ 139,700, respectively. Agent incomes trailed, at $ 104,600, but increased, still, from 2016. Those with less than two years of experience earned $ 44,000—a leap from $ 31,500 in 2016—and those with more than 26 years in the industry made $ 192,600, up from $ 162,200.

For more information, please visit www.nar.realtor.  

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Grow Houses No Problem for REALTORS® to Sell

Nov 7, 2018 by

There are burgeoning housing implications of the legalization of marijuana, from demand for dispensaries to an influence on property values, according to a new report.

According to approximately 10 percent of REALTORS®, in areas where there’s a dispensary, homes have increased in value, a National Association of REALTORS® (NAR) survey uncovered. More than 75 percent of REALTORS®, however, have not seen any shift in values, and 12-14 percent have seen a decline.

On the commercial side, the impact of the legalization of marijuana seems to be significant. According to the survey, close to 25 percent of commercial REALTORS® have seen a boost near growing land, and 20 percent have seen an increase on properties in proximity to a dispensary.

“Members in states where marijuana has been legalized to some extent have been asking us to conduct this kind of research because it is directly affecting their business,” said Jessica Lautz, director of Behavioral and Demographic Trends at NAR, during the 2018 REALTORS® Conference & Expo, where the findings were shared.

“Whether it is influencing property values, the number of all-cash purchases or demand for various types of commercial properties, it is clear that this billion-dollar industry is making an impact,” Lautz said.

Importantly, agents with grow house listings have had no problem selling them, according to the survey—both where marijuana has been legalized for medical purposes, and where it has been legalized for medical and recreational use. Of those REALTORS®, 90 percent had no issues with the title.

Still, there’s stigma.

“While less than 10 percent of members indicated there is an increase in actual crime around dispensaries, 16-18 percent indicated that there is an increase in the perception of crime,” said Lautz.

Continuing coverage of the REALTORS® Conference & Expo to come.

For more information, please visit www.nar.realtor.

DeVita_Suzanne_60x60Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Housing in 2020: Construction Costs Grow, Mortgage Rates Slow

Aug 26, 2018 by

Where will housing be in 2020? According to the latest Metrostudy predictions, if all continues on its current track, construction costs could continue to increase, and mortgage rates could reel in.

While rates have increased in the last six months, impacting affordability, the rise is not significant according to historical trends, says Mark Bound, chief economist and senior vice president at Metrostudy, a provider of primary and secondary market information to the housing and residential construction industries. In the long term, Boud predicts mortgage interest rates will top out at 5.8 percent in 2020 and 2021, eventually being pulled down by slower economic growth—and because of tighter lending practices, the market environment will not become as dire as the last housing bubble.

As for inventory, it is significantly under-supplied, while homes are increasingly overvalued; however, the risk of a price collapse is small due to the tight market, and Boud expects the cycle of under-supply to plateau in 2020. The lack of new inventory is, in part, in response to trade increases, as many of the imposed tariffs—specifically the 20-plus percent tariff on lumber imports, and 10 and 25 percent tariffs on aluminum and steel imports, respectively—directly impact construction efforts.

These factors could lead to an increase in overall construction timelines, as well as an increase in construction costs by at least $ 2,000 per house, according to Boud. More homes in the upper price ranges are being built, while inventory under $ 400,000 is lower, in some cases. Overall, the national market is becoming top-heavy, which typically only occurs where land is more expensive, such as in California, Boud says.

Remodeling activity continues to rise in response to homeowners staying in their homes for longer, as well as the continuing trend toward purchasing existing homes, which triggers renovations. According to Boud, this is most common in coastal markets, or markets that have high appreciation rates, such as Texas.

Something to watch? Inflation. Boud says inflationary pressures are slowly building—inflation rose from 2.4 percent in March to 2.9 percent in August—but in a few years, the national debt could slow economic growth, which, in turn, could slow down rising interest rates.

Another concern? The current downward trend of the 2-10 Treasury yield spread, which could see negative figures in about a year, may be a sign that a recession is in the cards.

However, the current economy is healthy, Boud says. In the past 12 months, 2.4 million jobs have been generated, increasing demand for housing and pushing the unemployment rate down. Additionally, housing starts are fairly stable, forecasted to be 1.28 million in 2018, and increasing to 1.33 million in 2019 and 1.345 million in 2020, before plateauing.

Dominguez_Liz_60x60_4cLiz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Learn, Grow, READ

Feb 6, 2016 by

Computer ReadingI facebook for at least an hour every morning. There. I said it. Now you know my little secret. Go ahead, roll your eyes. Scoff. Make jokes about how I must love to be up on all the latest gossip and goings-on with my 300+ friends.

The truth is, I quickly skim through the friend posts, push “like” on a few, (work that database!), share the occasional short posts that my page audience might like, and keep going until I get to the reason I’m actually there: Articles.

I read a lot of articles on Facebook. Admittedly, it is where I get almost all my news, tips and ideas. I am constantly reading articles from organizations like National Association of Realtors, Realtor Magazine, HouseLogic, The Mike Ferry Organization, Lighter Side of Real Estate, National Real Estate Post, and KCM Crew, as well as catching up on any relevant local news from our tv stations and newspapers. Basically, I am always reading, watching, and learning.

Why?

Back in 2008, a lender was talking with me about the recession we were in. My knowledge was limited, so I asked him how he knew everything he was telling me. He mentioned a show called Think Big Work Small. “It’s kind of like Car Talk– laid back, funny and informative- but for lenders and Realtors.” I googled it, watched it, loved it, subscribed and have not missed a show since.reading-ignorance

What I noticed after watching the TBWS (now National Real Estate Post) episodes was that I learned things that carried into conversations with clients. Suddenly, I was sounding smarter, more knowledgeable, and more professional. I felt pride in the fact that as a relatively new agent, I could hold my own with the business people I encountered. I loved that I actually had something to say instead of feeling like everyone was above my knowledge level.

Now that I’m a manager, I’ve realized just how important that skill has been to not only help grow our company, but also to give our agents confidence when out in the field. I encourage the agents by sharing articles, discussing new ideas and tips, and relaying beneficial information. We watch videos, listen to podcasts, attend conferences and classes, and immerse ourselves in our industry.

Knowledge truly is power. If you don’t read and learn about your profession, you are never going to grow. You are never going to be any more than what you are today.

If that’s not okay with you, then take the time to invest in your career. Take the time to get educated. And most importantly, take the time to READ.


Amy Gilpin RealtorAmy Gilpin Associate Broker, Manager, ABR.

Fourteen years of helping clients. Six years of helping agents. All for this crazy thing we call real estate.
Production Realty 517-879-4141 Jackson, MI Amy@ProductionRealty.com

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