In spite of a rough economny and continued unemployment woes, home sales rose in 2009. According to the National Association of Realtors®, there were approximately 5,156,000 existing-home sales in 2009, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008. It was the first annual sales gain since 2005.
Total housing inventory at the end of December fell 6.6 percent to 3.29 million existing homes available for sale, which represents a 7.2-month supply at the current sales pace. That is an increase from a 6.5-month supply in November. The national median existing-home price for all housing types was $178,300 in December, which is 1.5 percent higher than December 2008.
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Posted in NAR, National Association of Realtors, National+Association+of+Realtors, Real Estate, Real Estate Market, Real Estate Market Conditions, buyers' market, home inventory, home prices, home sales, home selling, home valuation, housing market, market, real estate news
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When you list with IHS Realty’s flat fee MLS service you get exposure through the National Association of Realtors as well
REALTOR.com is the official site of the National Association of Realtors (NAR). When you list your home with IHS Realty’s flat fee MLS service, you get automatic exposure through the NAR. You get the most exposure and access to our staff’s knowledge and expertise. In a word, we will not leaving you hanging and you are not on your own, but you do save the enormous real estate commissions.
Learn more about flat fee MLS right now.
Alternatives to the traditional real estate commissions
At a recent convention Steve Levitt, the author of "Freakonomics," shared some interesting facts and views about the real estate industry. He has been criticized by the National Association of Realtors and many agents for his prediction for the future of the real estate industry. His findings include:
- Due to low entry barriers for new real estate agents the median income has not increased over the last 10 years even though prices are up almost 70 percent in some places.
- Real estate agents tend to sell their own homes for about 3 percent more than the selling price of their clients’ homes.
- Real estate agents tend to leave their own homes on the market about 10 percent longer than their clients’.
He also shared a story criticizing the ethical motivations of real estate agents citing a personal experience. He contacted the listing agent of a home he was interested in order to determine a minimum offer that would be considered by the seller. The agent then explained the seller would be willing to accept offers significantly lower than the asking price so she could pocket an extra $20,000 to 30,000 in commissions costing her clients over $50,000. Sound fair? This problem certainly would not be encountered using a flat fee MLS service, where you – the seller – are in control of the transaction. Cost effective alternatives like flat fee MLS provide a viable option for home sellers and for sale by owners to market their homes. In fact Levitt explains he thinks flat fee MLS and limited service brokers will provide the knockout punch to the traditional model.
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The future of the real estate industry
Is there an easy answer to the question about where the real estate industry is headed? It doesn’t seem that way at this point. With the anti-competitive legal battles continuing between the DOJ and the National Association of Realtors (NAR), it’s hard to determine exactly what the future may hold. Although, it seems NAR is not going to lie down and allow flat fee MLS and discount brokers to have the same effect on their industry as discounters had on the stock brokerage and travel industries. But, lucky for discount brokers, it seems this is a double edged sword for NAR, as the harder they fight the more press they draw to alternative listing models, the outrageous commission structure that has been in place forever, and "fixing" that seems to take place in real estate. Isn’t weird that, theoretically, an agent is doing the same work for a $100,000 listing as they are for a $500,000 listing but will be compensated five fold for the latter? As flat fee MLS companies and discount brokerages continue to assume a larger market share, one must wonder if NAR is fighting in vain to prevent change. A homeowner should be afforded the opportunity to decide what services are needed in order to sell the home, not obligated to sacrifice 6 percent for a bundle of unwanted services. It is no secret that the exposure created through an MLS listing cannot be attained as a for sale by owner, so why not allow consumers to utilize a real estate professional who is willing to unbundle the services and offer them on an a la carte basis? To me it’s simple, NAR is attempting to eliminate competition and it is up to consumers to voice their opinion and concerns. Don’t get stuck without a choice!
Property information being made public by MLSs
Home valuation and real estate tech sites have added pressure to the ever-changing face of real esate and the way MLSs and brokers alike display their property information. Under the pressure Northwest Multiple Listing Service, which serves western Washington, Prudential, and Zip Realty have made the decision to provide sold property information for public display. With the ongoing litigation between the Department of Justice and the National Association of Realtors it will be interesting to see if this becomes the norm or just an anomaly. Websites like Zillow.com and competitor RealEsateABC.com have increased consumer knowledge of home valuations and provided a springboard for home sellers to assume more control over the sales transaction. With accurate home valuations sellers can now confidently list their homes through alternative models like flat fee MLS brokers and discount real esate brokers eliminating the high commission structure demanded by full service brokers and agents.
Consumers can opt for lesser services if inclined
Tennessee has passed a bill establishing minimum service requirements for all real estate licensees unless such duties "are specifically and individually waived in writing by a client." The bill mandates licensees assist clients in the showing of properties, receiving all offers and forwarding them to the client, answering client questions during negotiations and advising clients as to what is needed for a successful closing. The passing of this bill comes on the heels of the rejection of a similar bill in
Kentucky that sought to establish new minimum service requirements. Attempts of legislation and state regulators to establish such "minimum service" requirements have been opposed by federal agencies like the Department of Justice which say such proposals restrict consumer choice and have an anticompetitive effect on the real estate industry. These minimum service requirements are a rash, direct response by the traditional agents and the National Association of Realtors to impede the growth of, and eliminate flat fee MLS brokerages and discount brokerages. Their weak basis for such claims and laws only reflect the hypoocracy and lack of ethical fortitude the National Association of Realtors is working so hard to overcome. For supporters of these measures to hide behind the facade of worry for consumers is a farce – if they are worried about consumers then give them a choice. Preventing competitive models only serves as a way for agents to ensure commission rates will be fixed for years to come. Worried for consumers…give me a break. Agents are scared, and NAR has the clout to fight.
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Think-tank deliberates over the future MLS structure
From a consumer stand point both home sellers and home buyers would stand to be the benneficiaries of increased marketing exposure through a nationally consolidated MLS. The only problem is brokers are requesting protection of information and content which not only hurts a seller wanting public exposure but limits the exposure brokers would get from there own listings. But it seems if there is one constant in real estate it is agents love "to shoot themselves in the foot." In the last year the Department of Justice has questioned and filed suit against the National Association of Realtors regarding property data and the control of such information. NAR has only brought more attention to its "anticompetive" policies recently by implementing minimum service requirements of a broker listing a home. The suits filed by the Department of Justice have raised consumer awareness of alternative listing models bringing attention to the current MLS structure, commission structure, and restrictive display of information. Flat fee MLS companies and real estate discounters are gaining market share all the while thanking the broker associations that got the attention of the DOJ. A nationally consolidated MLS could benefit the masses if created as a consumer-friendly database that is broker controlled.
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Given anonymity agents report slow market conditions
Inman News recently opened the floor to real estate agents to report their current market conditions. As incentive for honesty the agents were given complete anonymity if so desired. The responses were nearly uniform from Portland, Oregon to Central Florida, inventory is up and sales are down. While the responses seemed bleak there is no real data that seems to back the slowing market condition. Home sales prices have not suffered as the median home price is up according to the National Association of Realtors and the uptick in inventory is not enough to be troubling. Although David Lereah, the NAR chief economist, is on the record as predicting price appreciation will drop to the mid-single digits. So Walter Molony, a NAR spokesman, has characterized the conditions as "neither a seller’s nor a buyer’s market…balanced is a better word."
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Century 21 ad causes controversy
A new national ad campaign by Century 21 is shedding a negative light on the realtor community. While the National Association of Realtors is in a constant struggle to improve the overall conception of Realtors, Century 21’s newest ad is once again stirring up controversy. The commercial depicts a husband and wife debating whether or not they can afford a new home with their Realtor listening on the phone. The husband is reluctant to agree but the agent works with the wife to change his mind. Real estate writers and the general public alike have jumped all over the campaign and the Realtor community because it, in effect, confirms the common suspicion that at the end of the day an agent wants the deal to go through, that is how they get paid. The ad has only added to the confusion of what value an agent actually provides during the transaction.
Home Sales in February Exceed Industry Forecast
After economists forecasted a drop in the annual rate, home sales experienced the biggest jump in two years indicating a surprising strength in the housing market. The 5.2 percent rise from 6.57 million in January to 6.91 million in February was the biggest jump since February of 2004 according to the National Association of Realtors. These figures are based on when a home sale closes not when a contract is accepted. So the warmest January on record, coupled with the dip in interest rates may have aided in increasing the sales figures for the month.
While the median and average sales prices have reduced from January to February, sales levels are much ahead of where they were just one year earlier. Last year posted a median sales price of $189,000 and an average sales price of $249,000 compared to a median sales price of $210,000 and an average sales price of $256,000 for February 2006.
Reports predicting the real estate market to cool off from the record pace of 2005 now seem a little premature.
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Home Buying Rebates and Savings
Recent studies by the National Association of Realtors have revealed that 77% of home buyers begin their home search online. Furthermore, industry insiders have estimated that home buyers do 90% of the research and work to find their next home on their own. Taking that information into consideration, doesn’t it seem like a Buyer Agent is making a little too much in commission. I think so. The average home buyer is taking advantage of the resources offered by the internet assuming control over the transaction by viewing homes online, finding home valuations, conducting CMA’s of their home, and narrowing their search field before enlisting the services of an agent. The average time a consumer spends with an agent before writing a contract has decreased to under 14 days, and less than 40 work hours. This means an agent is making a 3% commission for your hard work. Consumers are making the job of a buyer agent significantly easier without demanding a change in the commission structure. At IHS we think you should see reward for the hard work you have put in, so, if you purchase with an IHS network agent you can receive up to $2,000.00 back at closing. We have also teamed with Charter One Mortgage to provide additional savings in closing costs. We feel if you are willing to put the work in, you should reep the reward, not the buyer agent.
Will the National Association of Realtors Amend the Way Property Data is Displayed
A National Association of Realtors (NAR) advisory board will meet in the coming months to determine if a new version of the Multiple Lisitng Service system needs to be implemented. With over 900 local and regional MLS’s each mandating its own rules and regulations, is it possible, or even feasible to think there could be a unified MLS covering the entire nation? The advisory board is meeting to discuss the possibilities of change.
Strange to see the effect the evolution of technology has had on what used to be one of the most guarded sources of information in any industry, the almighty MLS. But it seems the traditional way of guarding information is whittling away. Now, it is up to the advisory board to determine how the MLS would be used and what capabilities it would offer if there were no current MLSs in place and development were to start from scratch.
The fact NAR is even considering such a development is significant given its ongoing battles with the Department of Justice over its current policies of the online display of property information. It is cited that Zillow and other home valuation sites have provided major "wake up call" to the current MLS structure. It will be interesting to see what capabilities and upgrades a "new" MLS would offer to its members. With product information only a click away from the general public, a new MLS will have to offer more in providing detailed and accurate information to its practitioners.
