The Consumer Financial Protection Bureau (CFPB) has released a new online toolkit to help real estate professionals understand the new TILA-RESPA Integrated Disclosure rule (often referred to as TRID) and how to explain those changes to clients.
According to the U.S. Census, homeownership is at 63.4 percent for the second quarter of 2015, down 1.3 percent from the second quarter of 2014. This is the lowest rate of homeownership since 1967. To put that in greater context, homeownership peaked at 69.2 percent in 2004, and the 50-year average is 65.3 percent.
The California Association of REALTORS® (C.A.R.) applauds Governor Brown for signing into law AB 345, a C.A.R.-sponsored bill that earmarks three hours of a real estate broker's existing mandated continuing education (CE) for a course on the management and supervision of real estate licensed activity. Governor Brown signed the bill into law on Monday, July 13, and the bill becomes effective Jan. 1, 2016.
AB 345 also permits salespersons to elect to take a course containing relevant information to assist them in understanding how to be effectively supervised by a responsible broker or branch manager.
“C.A.R. commends Governor Brown for signing AB 345 into law,” said C.A.R. President Chris Kutzkey. “Since the California Bureau of Real Estate can hold a manager accountable for failure to supervise, C.A.R. believes it important that a real estate broker understand how to properly manage real estate offices, salespersons, and broker associates, in order to minimize risk for all parties involved.”
Current law requires a real estate broker to exercise reasonable supervision over the activities of his or her salespersons. Existing law also requires real estate licensees renewing a license to complete 45 hours of California Bureau of Real Estate (CalBRE) approved CE. Currently, 15 hours of that CE requirement are earmarked for specified courses, while 18 hours are dedicated to consumer protection courses, with the remaining 12 hours of CE being elective.
Sustained job and income growth gave home buyers the confidence in July to jump into the California housing market, pushing home sales to their highest level in nearly three years, according to a report released today by the California Association of REALTORS® (C.A.R.). Home sales have risen year-over-year for six straight months.
According to C.A.R.’s newest housing market indicator, which measures the sales-to-list price ratio*, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices. The statewide measure suggests that homes are selling at a median of 98.8 percent of the list price, slightly up from 98.5 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 105.2 percent, up from 103.4 percent a year ago, but down from 106.3 percent in June.
Existing, single-family home sales totaled 449,530 in July on a seasonally adjusted annualized rate, up 2.7 percent from June and 12.7 percent from July 2014
Statewide sales were above the 400,000 mark for the fourth straight month
July statewide median home price was $488,260, down 0.3 percent from June but up 5.4 percent from July 2014
Available housing supply remains constrained at 3.3 months of inventory
The median number of days it took to sell a single-family home rose slightly in July to 35.1 days compared with 33.4 days in June but was down slightly from 35.9 days in July 2014
*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.
A promising climb in home sales throughout the country amidst insufficient supply caused home prices to steadily rise in most metro areas during the second quarter, according to the latest quarterly report by the National Association of REALTORS®.
Lawrence Yun, NAR chief economist, says the housing market has shifted into a higher gear in recent months. "Steady rent increases, the slow rise in mortgage rates and stronger local job markets fueled demand throughout most of the country this spring," he said. "While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas."
Adds Yun, "With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering home ownership — especially in higher-priced markets."
Orange County is one of those higher priced markets (in the top 5 to be exact).
If you're an ActiveKey user, don't forget to renew your key lease by September 1. You can pay online at Supra's WebPay.
If you no longer require your key, make sure you return it to either OCAR office by August 31 to cancel your contract. If you have your key on September 1 or beyond, you will be responsible for paying the lease renewal fee.
If you need assistance registering for Supra WebPay, watch our quick training video:
Are you using a drone to snap photos of your latest listing? We’ve noticed several drone-assisted photos in the MLS, and we have some advice you, “STOP!” Unless you or the company you’ve hired to take the pictures has a waiver from the Federal Aviation Administration (FAA), using a drone or Unmanned Aerial Vehicle (UAV) for commercial purposes is illegal.
Current FAA regulations prohibit the commercial use of UAVs, except in situations where the operator has obtained a Section 333 waiver. The FAA Modernization Act of 2012 charged the agency with integrating UAVs into the National Air Space. The rulemaking for UAV integration began in February 2015 and likely won’t be completed until late 2016 or early 2017.
The National Association of REALTORS® has been meeting with the FAA to develop guidelines that would allow REALTORS® to photograph properties using drones. This regulatory process will take some time. So, unless you (or the drone operator) have the Section 333 waiver, for now, it’s best to keep that drone on the ground.
In response to member’s increasing interest in drone-assisted photography, NAR has compiled a number of resources on its website here.
This article is for informational purposes only and is not intended as legal advice.
“REALTORS® report that buyers are far more concerned about a home’s water efficiency than they once were. Many customers are asking about the water conservation upgrades or modifications that have been made to the homes they are considering for purchase.”
In this month's issue of the OC REALTOR®, OCAR Public Policy Advisor, Ron Kingston describes how the water shortage is altering both buyer expectations and property appraisals in the once-Golden State.
Don't spend your money on eBooks that you can check out for free, online via the National Association of REALTORS® Lending Library. Borrow books on real estate investment, marketing techniques, management trends, and a number of real estate-related topics.
Formats are offered for desktop computers, tablets, and mobile devices.
A key indicator of housing market strength, the REALTORS® Confidence Index, is based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions. In addition, the "Questions of the Month," feature results of a timely aspect of the housing market. In June, REALTORS® were by and large “strongly confident” about the outlook over the next six months compared to a year ago.
Strong local market conditions in June for single-family and condo properties.
Sustained job creation at a pace of 220 thousand jobs per month in 2015
Reduction in the FHA’s annual mortgage insurance premium rates (which took effect January 2015)
TILA-RESPA Integrated Disclosure (TRID) regulations (effective October 3, 2015) may lead to delayed closings
Declining demand from international buyers due to a stronger U.S. dollar
Tight inventory and limited affordability
Potential for rising interest rates
Difficulty obtaining financing due to higher credit and down payment standards
Existing-home sales increased (3.2%) in June to their highest pace (5.49 million) in over eight years (5.79 million in February 2007).
Sales have now increased year-over-year for nine consecutive months and are 9.6% above a year ago (5.01 million).
June: 5.49 million (May: 5.32 million)
Northeast: 4.3% Mid-West: 4.7% South: 2.3%; West: 2.5% (all have also increased year-over-year for six consecutive months)
Single Family: 2.8% Condominium: 6.6%
Backed by June’s solid gain in closings, this year’s spring buying season has been the strongest since the downturn.
1st-time buyers were 30% in June, down from 32% in May; 28% in June 2014
All-cash sales were 22% of sales in June, down from 24% in May; 32% in June 2014
Investors were 12% in June, down from 14% in May; 16% in June 2014
30-year fixed-rate rose to 3.98% in June (3.84% in May)
Demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy. June sales were also likely propelled by the spring’s initial phase of rising mortgage rates.
However, the cumulative effect of rising demand and limited supply has pushed the national median sales price to an all-time high (July 2006, $230,400). Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers.
Home Prices The median existing-home price in June was $236,400, which is 6.5% above June 2014. This marks the 40th consecutive month of year-over-year gains.
Inventory/Time on Market Total housing inventory at the end of June inched 0.9% to 2.30 million existing homes available for sale, and is 0.4% higher than a year ago (2.29 million). Unsold inventory is at a 5.0-month supply at the current sales pace, down from 5.1 months in May.
5.0-month supply; 5.1 months in May
Properties typically stayed on the market for 34 days in June, down from May (40 days) and the shortest time since NAR began tracking in May 2011.
Forty-seven percent of homes sold in June were on the market for less than a month – the highest percentage since June 2013 (also 47%).
Tell your U.S. Representative to support H.R. 9, the Innovation Act to stop patent trolls and protect the real estate industry from frivolous lawsuits.
REALTORS® across the country receive threatening demand letters and lawsuits alleging patent infringement based on the use of common business tools such as drop down menus or search alert functions on websites and the scanner function on a copier. These patent trolls buy vague patents and use them to turn everyday business practices into potential lawsuits.
H.R. 9 is scheduled for House floor consideration next week. Congress must pass this common-sense comprehensive patent litigation reform to protect Main Street businesses and REALTORS® from patent troll abuse.
Real estate like-kind exchanges are an important vehicle for disposing of and acquiring properties and support the nation's financial growth, job creation and economy, according to a new report from the National Association of REALTORS®.
The Like-Kind Exchanges: Real Estate Market Perspectives 2015 survey of NAR's commercial and residential members found that real estate investors and commercial property owners place a very high priority on current like-kind exchange tax rules; 40 percent indicated that transactions would not have occurred in the absence of the tax provision, and 56 percent said even if the project would have occurred it likely would have been smaller in scale.
For a significant proportion of real estate market participants, like-kind exchanges (LKE) provide an important vehicle to dispose and acquire property.
Like-kind exchanges are available to individuals, partnerships, corporations, limited liability companies, as well as trusts.
The main requirement of a like-kind exchange is that the disposition of one property and acquisition of another property must be part of an integrated transaction, rather than two individual transactions.
REALTORS® are active participants in like-kind exchanges as investors, brokers and agents, intermediaries and professional advisors.
Sixty-three percent of REALTORS® participated in a like-kind exchange transaction during 2011-14.
In 2014, REALTORS®’ average fair market value of all transactions was $7.0 million
Like-kind exchanges accounted for 39 percent of total FMV, or $2.7 million per respondent.
Ninety-six percent of REALTORS® indicated a decrease in real estate values in case of repeal of like-kind exchange provisions.
Like-kind exchanges in which REALTORS® participated created between 10 and 35 new jobs, mostly resulting from spending on building improvements following acquisition.
Over the holiday weekend, the Orange County Fire Authority responded to five near-drownings. Drowning consistently remains the leading cause of death for children one to four years old both in Orange County and throughout the state.
In the July issue of the Orange County REALTOR® magazine, OCAR writer and editor, Sherri Butterfield, wrote an excellent piece entitled, "The ABCs of Water Safety" (pages 48-49). It's followed by a one-page Swimming Pool Safety handout. These are great pieces to share with your clients or farm.
If you ever thought Mello-Roos taxes made your property tax bill more confusing, you're not the only one. Recently, a grand jury investigation found that the 119 districts within Orange County lack the oversight necessary to ensure that your tax dollars are going toward their intended purpose. The County of Orange is the largest administrator of the Mello-Roos districts, followed by Capistrano, Tustin, and Irvine School Districts.
Read the rest of the Orange County Register article here...
Pending home sales continued to rise in May and are now at their highest level in over nine years, according to the National Association of REALTORS®. Gains in the Northeast and West were offset by small decreases in the Midwest and South.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 0.9 percent to 112.6 in May from a slight downward revision of 111.6 in April and is now 10.4 percent above May 2014 (101.9). The index has now increased year-over-year for nine consecutive months and is at its highest level since April 2006 (113.7).
Lawrence Yun, NAR chief economist, says contract activity rose again in May for the fifth straight month, increasing the likelihood that home sales are off to their best year since the downturn. "The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring," said Yun. "It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive."
While total unit sales from international home buyers decreased from last year, total sales dollar volume increased 13 percent, according to the National Association of Realtors® 2015 Profile of Home Buying Activity of International Clients .
For the period of April 2014 through March 2015, total international sales were estimated at $104 billion, compared to the previous year's estimate of $92.2 billion. This represents 8 percent of the total existing-home sales dollar volume.
"In 2014, sales transaction to buyers outside of the U.S. dropped 10 percent, possibly due to the strengthening of the U.S. dollar in relation to international currencies and weakening foreign economies," said NAR Chief Economist Lawrence Yun. "However, the amount of money spent has increased; this means international purchasers in the U.S. have become an upscale group of buyers, spending more money on fewer homes."
In 2014, five countries accounted for 51 percent of all purchases by international buyers: China, Canada, Mexico, India and the United Kingdom. For the first time, buyers from China exceeded all other countries in terms of units purchased and dollar volume, purchasing an estimated $28.6 billion worth of property. Buyers from Canada followed with $11.2 billion in purchases, followed by India with $7.9 billion, Mexico with $4.9 billion and the U.K. with $3.8 billion.
Read the 2015 Profile of International Home Buying Activity here.
National Association of REALTORS® President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., released the following statement in response to the Consumer Financial Protection Bureau’s announcement of a proposed two-month delay for the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure, or TRID, regulation.
“The action announced today by the CFPB is a welcome step. NAR has long advocated the need to avoid implementing the new regulation during the peak summer selling season.
“NAR welcomes the CFPB’s proposed extension to October 1, 2015 as well as the earlier 'sensitivity' they offered to companies making a good-faith effort to comply with the new TRID regulation.
“We will continue to work with CFPB to minimize any possible market disruptions or uncertainty that could develop following the implementation.
“Realtors® appreciate that the CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers.”