Daily Archives: May 4, 2012

The Supremes Rule | Waccabuc Real Estate

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When people think of the National Association of REALTORS® (NAR), they usually think of our issues advocacy with the Legislative and Executive branches.  But the truth is NAR also works with the Judicial Branch when needed.

Standing up for the rights of property owners is one of NAR’s critical missions.  Sometimes that means going all the way to the highest court in the land.  Not long ago, NAR joined a dozen other associations in submitting what’s called a “friend-of-the-court” brief to the Supreme Court of the United States.

When NAR heard the story of Chantell and Mike Sackett from Priest Lake, Idaho, it seemed like, in this instance, the U.S. Environmental Protection Agency (EPA) had gone too far.

Here’s what happened:

Four years ago, the Sacketts bought less than an acre of land sitting in the middle of a developed subdivision, complete with a sewer infrastructure.  The couple had obtained local building permits and even a verbal okay from the U.S. Army Corps of Engineers that the property, which periodically has water on it, was not a wetlands.

As soon as the Sacketts started to build their home, EPA officials, citing the Clean Water Act, ordered them to stop and restore the property to its original condition and monitor the property because they hadn’t obtained a permit from the Army Corps of Engineers.  If they didn’t comply, they could be fined as much as $32,500 a day!

Then, the EPA said that the Sacketts could not challenge the EPA’s order because they had not been charged with noncompliance, and prior to that the agency’s orders are not subject to judicial review.

NAR and others filed a brief, arguing that the Sacketts were denied due process because they couldn’t contest the EPA’s order without violating it and facing serious or substantial penalties for non- compliance, or alternatively, seeking a permit, which is a lengthy and potentially expensive process.

After considering the case, the Supreme Court handed the Sacketts, and private property owners, a victory.  It ruled that property owners may contest in court EPA compliance orders like the one issued to the Sacketts without having to first violate that order.  This means the Sacketts can now appeal the EPA ruling.  Finally, they get their day in court.

This is just one case, but be assured that NAR will not rest.  We will continue to be proactive in all three branches of government, protecting the dream of home ownership in every way we can.

via voicesofrealestate.blogs.realtor.org

ADP Employment, Mortgage Purchase Applications | Cross River Real Estate

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In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses ADP employment numbers and mortgage purchase applications.

  • More evidence of the economy hitting a soft patch appeared today.  Employment is expanding, but at a slower pace than before.  ADP, a firm that processes payroll checks for many of the companies in the country, reported a job gain of only 119,000 in April.  That is only the half the rate of the 220,000 monthly average job creation in the six prior months.
  • This job data is not ‘official’ since it misses out on the many companies who do not use ADP services.  However, it has been a reasonably good leading indicator for the official employment data released by the government, which is set for this Friday.
  • In separate data news, mortgage applications to buy a home rose 5% in the final week of April.  It marks two consecutive weeks of increase.  However, this data points to no measurable pick-up in home sales over the past 12 months, contrary to rising home sales figures.  The applications data has no information about the approval rates and also there have been a sizable number of all-cash deals, which would not be picked up from mortgage data.
  • Refinancing activity slid for the second straight week.  Mortgage bankers may need to increase staff time dedication to home purchases rather than refinances, particularly in the upcoming months.  When the mortgage rates rise, refi activity will quickly dry up.  The only source of mortgage business will be from home purchases. (This reallocation of staff time may also imply that a moderate rise in mortgage rates could be good for the housing market.  The rising rate will force banks to dedicate more staff time in processing home purchase loans.)

via economistsoutlook.blogs.realtor.org

Local Market Job Situations | North Salem NY Real Estate

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  • Fresh data on employment conditions at the metro level was released this morning. This data has some lag time so the latest information is as of March.
  • Jobs are one of the important factors affecting home sales. Among the areas where the housing market crash was brutal, Phoenix and Miami look poised for a sustainable recovery. Phoenix added 40,300 jobs in the past 12 months, while Miami-Ft. Lauderdale added 32,200. Job gains were light in Orlando and Ft. Myers. Las Vegas and the non-coastal California markets were also a step slow in jobs recovery. Turning to the Midwest, Detroit is coming back with 26,600 net new jobs, but Cleveland is showing no traction.
  • As for small towns, Ft. Wayne (IN) and all the small towns across North Dakota did very well. The fastest flyers were Lafayette (LA) and Odessa (TX) where they have added 10% or more jobs from just 12 months ago.
  • Job performance for every market is shown here.

via economistsoutlook.blogs.realtor.org

Tight Lending Standards Hindering Commercial Real Estate Recovery | Mt Kisco Real Estate

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Although commercial real estate markets showed signs of recovery in 2011, commercial lending standards have tightened in the past year for small businesses and scuttled a major portion of contracted transactions for smaller properties, according to the National Association of Realtors® annual Commercial Real Estate 2012 Lending Survey.

Lawrence Yun, NAR chief economist, said there is a significant split in commercial lending depending on value. “This is very much a tale of two markets. There have been notable improvements in capital for large commercial transactions valued at $2.5 million or higher, but there remain significant challenges for small business,” he said.

“Our Realtor® members typically are involved in helping commercial clients with purchases under $2 million, where a lack of capital has caused two out of three respondents to report deals have fallen through. Given that most jobs are created through small business, the lack of capital is hurting small businesses and the overall economic recovery.”

According to Real Capital Analytics, more than 13,000 major properties valued at $2.5 million or higher traded hands in 2011. Sales volume increased 51 percent over 2010 to $205.8 billion, with the lion’s share of lending funds coming from big banks. Other funding sources include insurance companies and institutional investors.

By contrast, the NAR survey shows that small business transactions rely heavily on smaller regional and local banks, and small private investors, for lending capital.

Respondents indicate nearly 30 percent of smaller commercial properties are purchased with cash, reflecting the tight credit environment, and some are seller financed. “When credit is tight, cash is king,” Yun added.

The most common types of property transactions referenced in the survey were multifamily, land, warehouse, suburban office and retail strip centers. Other property types include industrial flex space, central business district office, freestanding retail, and restaurants.

Realtors® report the system is clogged with property that must be sold or refinanced, which is significantly impacting the recovery. Long-time investors who never had a problem getting a loan in the past are now being declined.

More than half of respondents say lending is just as stringent as a year ago, while 23 percent say it is more stringent; 20 percent say it is less stringent but not near historical averages. Members also complained about banks being over-regulated, and refinancing being denied due to stringent internal lender underwriting requirements or low appraisal valuations.

Thirty-six percent of Realtors® said clients used the Small Business Administration commercial refinance program, but of those who didn’t, 45 percent said it was due to burdensome application and reporting requirements.

The Commercial Real Estate 2012 Lending Survey is published by the NAR Research Division for the commercial community. In April 2012, a random sample of 32,459 Realtors® with an interest in commercial real estate was invited to complete an online survey. A total of 474 responses were received, for an overall response rate of 1.46 percent.

NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR. The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute,

Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

via realtor.org