RISMedia's Real Estate Magazine

JUN 2019

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/1119997

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Page 18 of 118

14 June 2019 RISMedia's REAL ESTATE {The NAR Power Broker Roundtable} Jim Imhoff: Brokers and agents in most parts of the country still face a shortage of inventory. New-home starts lag behind the need, increasing the competition for existing homes. Yet, as interest rates stay relatively low, even rising prices don't seem to be turning off buyers. What's interesting is that affordability is playing out a bit differently in various market areas and among different consumer groups. Is affordability the issue of the day? LP Finn: Affordability is always an issue, but it's a tough question to answer across the board. In our market, it's just a great time to buy. At the high end, buyers can pretty much get what they're looking for. In the lower and middle tiers, there's a lot of movement, especially among first-time buyers. Steve Brown: There's no magic answer, of course, but for a broker, I have to agree that it's a good time to be in the business. The market remains strong in our Midwest region, and strongest at the low end. I'd say 30 - 35 percent of our market are first-timers. David Cooper: In Kansas City, where the average selling price is under $300,000, there's increasing activity not just among first-timers, but also among move-up buyers and millen- nials. Multiple offers are the order of the day, and qualifying isn't the issue. It's demand that's greater than supply. Mark Stark: That's true in all our markets, but especially at the low end, where affordability isn't the problem. The challenge is no new inventory. There's not enough new construction because, given all the restrictions, builders can't build and make a profit. We're dealing with super-low inventory at a time when the market is super-hot. DC: For us, the squeeze is across the board. Properties are moving so fast, even at the high end, that a right- priced home at the million-dollar level doesn't last long. At the low end, it's a seller's market for sure. JI: It's a good time to buy and it's great for our business overall, but move-up buyers are hesitant to put their homes on the market because they're not sure they can find what they want. That's also true for downsizers. The lack of inventory at all levels is putting a damper on both agents and prospective buyers, so where do we go from here? SB: We need to get builders build- ing. The industry needs to continue advocating against high property taxes and restrictive land-use regula- tions, among other things—and perhaps lobby for denser housing developments. JI: True. We need something like 1.4 million new homes each year, and since the recession, we're still 5 - 6 million short. The shortage of building starts stems from a combinations of factors: lack of available building sites, a shortage of qualified tradesmen, and, to some degree, the cost of development driven by municipal regulations that are now estimated to add 30 percent to the price of a new home. LPF: When you look at price, cost and value ratios, we need to remember that on the upper end of the market, because of higher tax rates and costs that are no longer deductible, the cost goes up even when the price goes down. MS: On the whole, however, I can only repeat that it's a great time to be in real estate. DC: Another thing that's encouraging is the number of millennials who are coming into the market. In today's competitive environment, they seem to be willing to get offline and work directly with an agent. SB: There you go. There's an upside to everything. RE 8For an expanded version of this article and other NAR Power Broker Roundtable topics, please visit www.rismedia.com. Affordability: Is This the Issue of the Day? "We need to get builders building. The industry needs to continue advocating against high property taxes and restrictive land-use regulations, among other things." – Steve Brown President, Irongate Inc., REALTORS® MODERATOR: Jim Imhoff Chairman, First Weber, Madison, Wis., Liaison for Large Firms & Industry Relations, the National Association of REALTORS® (NAR) PARTICIPANTS: LP Finn COO, Coach REALTORS®, Long Island, N.Y. Steve Brown President, Irongate Inc., REALTORS®, Dayton, Ohio David Cooper President, Better Homes and Gardens Real Estate Kansas City Homes, Kansas City, Mo. Mark Stark CEO, Berkshire Hathaway HomeServices Arizona/ California/Nevada Properties, Las Vegas, Nev. The Power Broker Roundtable is brought to you by the National Association of REALTORS® (NAR) and Jim Imhoff, NAR's Liaison for Large Firms & Industry Relations. Watch for this column each month, where we address broker issues, concerns and milestones.

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