Category Archives: Industry news

Net Worth – owners vs. renters

Net Worth of Owners and Renters – Presentation Transcript

1. Net Worth of Owners & Renters November 11, 2010 Produced by NAR Research

2. Net Worth of Owners & Renters In the past 12 years, the net worth of the typical homeowner has ranged between 31 and 46 times that of the net worth of the typical renter. Homeowner equity is a substantial component of homeowner wealth. The Federal Reserve’s Survey of Consumer Finances, conducted once every three years, provides a snapshot of family income and net worth along with basic demographic details and more detailed information on where families keep the wealth they have accumulated. The most recent survey, concluded in 2007, offers a picture of the situation before home price declines and the tumbling equities market hit household balance sheets. At that time, median homeowners had well over $200,000 in net worth or 46 times that of the median renter who had just over $5,000. Furthermore, $200,000 was the median value of owners’ homes Looking at aggregate data, the National Association of Realtors® estimated the impact for renter and homeowner households through mid‐2010 taking home price and stock market performance into account. The result suggests that despite declines in equity and housing markets, homeowners have a net worth orders of magnitude greater than renters. How has the recovery of the stock market and a sluggish housing market affected owners and renters? For the first time ever, the Federal Reserve resurveyed the 2007 participants in 2009 to directly measure how the crisis and recession affected their finances. These results are expected later this year.

Produced by NAR Research

A Banner Day for Equality & Housing

This video was filmed by a colleague in the National Association of Gay and Lesbian Real Estate Professionals, as we attended the National Association of Realtors® Annual Delegate Meeting yesterday. The result of this vote is significant, as it holds Realtor® members to a higher standard than many state laws.

NAR Bars Sexual Orientation Discrimination

The change to Article 10 of the REALTORS® Code of Ethics passed in a roll-call vote by a greater than 9-to-1 margin. It had been previously approved by the Professional Standards Committee and the Board of Directors at the 2010 Midyear Meetings in Washington D.C.

Here is the amended language of Article 10:

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

A related recommendation amending Standard of Practice 10-3 was approved as well:

REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

The amendment was discussed prior to the vote. A few of the questions raised were:

1. Is “sexual orientation,” without qualifiers or any further explanation, the right phrasing?
2. Is NAR denying private property rights (ostensibly, the right of property owners to refuse to do business with people of a certain sexual orientation due to their moral beliefs)?
3. Should NAR precede the federal government in adding sexual orientation as a protected class?

In response to the third question, a delegate from Minneapolis pointed out that the purpose of the Code of Ethics was to hold REALTORS® to a higher standard. Another delegate who approved of the amendment said the Code of Ethics was a living document.

Delegates approved the Code change by voice vote, but one delegate called for a vote by ballot.

In ballot voting weighted by size of local association, the amendment passed by more than 93 percent.

– Brian Summerfield, REALTOR® Magazine

NAR & Smart Growth

Some people are suprised to learn that the National Association of Realtors® (NAR) is a full supporter of smart growth principles. Placemaking is more than just building homes and sprawling on to untapped lands.  While there are many areas of the country that do not embrace smart growth, Oregon has been a leader for decades.

I’m proud that my national association is an active participant in this area.

Successful Growth Begins with Five Principles

There’s no stopping growth. By 2020, this country will need to house 53.7 million more Americans than in the year 2000.

How will we live? Differently. The average household will be smaller. More people will remain active into their 80s; they will want shopping, entertainment, and medical services within walking distance. Empty nesters may gravitate toward revitalized city neighborhoods.

Struggling with traffic congestion and watching precious open space disappear, many homeowners will say “enough” to sprawl.

What to do? Grow smart! Smart growth focuses on the existing assets of the community, the long-term implications of various development patterns, and the fiscal impacts of these patterns. The bottom line: some ways of growing are more likely to succeed in the long run.

Each community defines smart growth for itself, but the National Association of REALTORS® hopes to see all such efforts guided by five principles:

  1. Make a commitment to housing opportunity and choice, a wide range of urban, suburban, and rural homes at all price levels for a diverse population.
  2. Build better communities with good schools, low crime, quality public services, efficient transportation systems, ample recreation areas, open space, a strong employment base, and a viable commercial sector.
  3. Protect the environment by controlling pollution and encouraging preservation of natural resources and properties of historic significance.
  4. At the same time, respect our Constitutional rights to freely own, use, and transfer real property.
  5. Implement fair and reasonable public sector fiscal measures to ensure that the cost of new infrastructure is shared proportionally among those served.

Source: http://www.realtor.org/government_affairs/smart_growth/principles

Staying on Top During the Boom & Bust


While not the intent of the U.S. News piece, it’s a good reminder to never follow the hype. Buy property and live in places that suit your lifestyle best. Just a few years ago, Bend was flooded with speculative buyers and ranked consistently as a top destination for retirement. Today, the bottom has fallen out of the market, and it’s now top place to buy for another reason.

Is it a great place to live? Absolutely! But this serves as a good cautionary tale.

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“The real estate downturn has turned some very popular retirement destinations into bargains.

To determine where the prices are most attractive, U.S. News & World Report examined price-to-income data for 384 metropolitan statistical areas. This expresses the relationship between owner income and home values.

Here are 10 retirement havens where homes are most affordable by this measure:

1. Bend, Ore.
2. Napa, Calif.
3. Fort Meyers, Fla.
4. Fayetteville, Ark.
5. Las Vegas
6. Sante Fe, N.M.
7. Punta Gorda, Fla.
8. Phoenix
9. Santa Cruz, Calif.
10. Burlington, Vt.

Source: U.S. News & World Report, Luke Mullins (07/08/2010)”

Friday | Urban Living

This past week I’ve seen a number of articles and headlines that center around a common theme, and it ties in nicely with Michelle Obama’s Let’s Move initiative.

We know obesity is an epidemic. We know that most suburban developments are car-centric and pedestrian-hostile.  Ironically, while the exodus to the suburbs for the past 50 years was to provide a better quality life to families – it has made many Americans unhealthier, car-dependent, and stuck in traffic for countless hours a year.

Fortunately, I am able to live in a “20-minute neighborhood” – as do many in Portland. Unfortunately, many do not.  On Wednesday, the Oregonian featured a nice article about the 20-minute neighborhood concept.   Portland’s Bureau of Sustainability and Planning is developing a test neighborhood in a typical suburban neighborhood, with the goal of turning it in to a true 20-minute neighborhood. Click here to read the article. Let’s hope it becomes a successful model for our region.

I was also introduced to a new term this week: slumburbia. It’s a good opinion piece from the New York Times, and I bet the term will stick.

If you’re like me, you’re encouraged by the direction we’re headed – frequently impatient, but encouraged nonetheless.

Giant traffic jam

State-by-State International Business Reports

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Please contact me if you would like either or both of the following reports. I can email them to you in .pdf format at no charge/no obligation:

“The 2009 NAR Profile of International Home Buying Activity” and “Business Data for Engaging in International Real Estate Transactions in Oregon.” I can obtain the second report for any state plus District of Columbia.

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International transactions are of increasing importance. In calendar year 2008, the U.S. exported $1.15 Trillion of goods and $0.5 Trillion of services; and the U.S. imported $1.97 Trillion of goods and $0.378 Trillion of services. With the expansion of international trade, the flow of people across borders has also increased rapidly, and, therefore, the demand for real estate in both residential and commercial sectors in conjunction with international transactions has been on the rise. NAR has recently issued state-by-state reports on international transactions.

The purpose of the current state-by-state reports is to present recent economic and demographic data related to international business activity directly associated with each of the states. There are 51 reports—one per state and for the District of Columbia. State specific demographic and economic data are available in each state report on a variety of topics:

  • Population demographics: U.S. born, foreign born, naturalized, and non-U.S. citizen residents
  • Main languages spoken in households
  • Immigration and naturalization trends
  • Non-immigrant visitors to the state
  • Foreign direct investment in the U.S. and the specific state
  • Value of state exports by type of product
  • State exports to specific trading partner counties

The current report is one of a number of recently released NAR reports on international subjects. The previously released 2009 NAR Profile of International Home Buying Activity presented an overview of U.S. home purchases by people whose primary residence is outside of the U.S.

Reprinted from REALTOR.org, January, 2010, permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.

Smaller-Home Living

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I thought I’d share an article that bodes well for many Portlanders.   More buyers are being lured to the simplicity that smaller homes bring. Plus, these homes are situated within walking distance to restaurants, shops, bike paths, and transportation options.

By Kristine Hansen | December 2009

After Sarah Susanka published The Not So Big House (The Taunton Press) 11 years ago, a groundswell of interest emerged about small home living. Tiny prefab homes began popping up on urban lots and prairie pastures alike. There was also renewed interest in downsizing the size of one’s home for the sake of simplicity.

Now, with an economic slowdown and a desire to live very close to jobs and other services, the trend is just as hot now as it was then.

“I call it the cappuccino factor. They want the cappuccino to be within walking distance,” says BJ Droubi, a Coldwell Banker broker in San Francisco. Homes in Noe Valley—an area she specializes in—are between 900 and 1,100 square feet.

For buyers trying to play it safe in the softening housing market, a smaller home may be the way to go. Smaller homes tend to not only be more affordable but more energy efficient.

“‘Not so big’ has almost become chic. Conspicuous consumption is no longer cool,” says Susanka, who defines a small home as a third less space than the buyer needs. “It doesn’t mean ‘less than.'”

Maximizing Square Footage in a Smaller Home

As an architect, Susanka became frustrated when discussions with clients always began with square footage. “I really tried to change the discussions away from size into the things that really matter,” she says.

Genevieve Ferraro shares a 1,800-square-foot house in Evanston, Ill., with her husband, two children, and a dog. “Long story short, my husband refused to move to a larger house and I couldn’t find a professional decorator who could help me design the house,” she says.

Ferraro launched a business, The Jewel Box Home, two years ago where she helps owners of small homes address storage, child-rearing, landscaping, and color choices. She works with various budgets and sometimes all it takes is just a simple rearranging of furniture to make a small space appear bigger and more cozy.

“A smaller space needs a certain type of flow,” Ferraro says. “There’s this conventional wisdom that bigger is always better and we have all sort of bought into that. There’s a stigma that small homes are second-rate.”

With a small home, you don’t have to sacrifice design or functionality. For example, Ferraro offers some of the following tips for making a small home feel not so small:

* Decide on the room’s primary function and let that guide your decorating.
* Keep color, furniture, lighting, and accessories in proportion. In other words, no large-scale pieces should be in a small room. Keep all the furnishings small and it will enlarge the space.
* Rearrange furniture so that the legs show on all of your upholstered pieces. This creates a feeling of space and light and allows the eye to travel across the room and see “through” furnishings.
* Keep tabletop accessories to a minimum. Have no more than three coffee tables and side tables. If you have a large collection of accessories, display them in rotating groups.

The Convenience Factor

In the historic districts and city centers of Maricopa County, Ariz., which includes Phoenix, smaller homes have only recently became affordable. A big part of their attraction is being within a short walk to restaurants, bars, shops, and other services.

“People can pick up foreclosures or flips and can spend their money on furnishings and fixtures … making it a luxury property on a better budget,” says Heather Wagenhals of HQ Real Estate and Investment in Phoenix. “You can create your own paradise within four walls, and it doesn’t have to be 10,000 square feet. We’re seeing some really gentrified areas turning into charming places to live.”

Tony Frantis specializes in selling homes in the Sugar House neighborhood of Salt Lake City, near the University of Utah, the state’s largest employer. Homes here—built between 1890 and 1950 and a mix of classic bungalows and Federal/Victorian style—range somewhere between 800 and 1,100 square feet and sell for $190,000 to $300,000.

“When people are looking for small homes, they’re gravitating toward areas that are neighborhood-rich,” says Frantis. “Most of these people could walk to anything they need.”

Some new-development communities also think smaller is better. Diane Balciar sells homes in Westhaven, a development in Franklin, Tenn.

“It’s like a Rockwell scene,” she says, referring to beautiful streetscapes (along with a dedicated person who visits homes to help with gardening), monthly concerts, a town center with shopping and dining, and a 15,000-square-foot clubhouse with a fitness center. An elementary school is on the horizon. Home sizes start at 2,000 square feet (the average is 3,200 square feet), beginning at $280,000 for a two-bedroom property. But the most popular home purchase are the smaller houses, she says.

An Economic Decision

How home buyers arrive at the decision to live in a small home varies, of course. Kerri Campbell and her husband never thought they’d end up living year-round in a 480-square-foot house they built four years ago as a vacation getaway. In 2007 they sold their sizeable house in Kansas City and relocated to this rustic abode deep in the Ozark Mountains, an hour from Branson, Mo.

“We were ready for a change. Our intention was to either build onto the house or build another house,” she says. They hadn’t counted on building costs to double and being forced to accept a lower asking price on their Kansas City house. So they decided to make the small house theirs.

With the tighter corridors, they have less space to spread out.

“It’s renewed our relationship and made us like each other again,” says Campbell, who is writing a memoir about small-house living.

Indeed, many people are looking for a simpler life and a small home equates to that, says Gregory Paul Johnson, co-founder of Small House Society, which gets 25,000 visitors a month to its Web site.

He points to the New Urbanism movement (which promotes walkable neighborhoods) and that more people are using cafes as their living room. Plus, appliances—especially televisions—are smaller than they once were and no longer compromise space.

“People are getting stressed out and overwhelmed, and the economy’s just part of that,” Johnson says. “The bigger the house, the bigger the headache.”


Reprinted from REALTOR® Magazine Online, December, 2009, permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2009. All rights reserved.