 On the show floor |
Quick takes from the first day of the 2009 National Association of Realtors Conference and Expo in San Diego:
-The U.S. market will see a 13.6 percent increase in existing home sales in 2010, with inventories dropping to a six- or seven-month supply, close to historic levels, NAR chief economist Dr. Lawrence Yun predicts. Prices should appreciate by 3 to 5 percent in the next year, according to the the group's latest forecast. “I am confident we will have price stabilization,” he said. “I am confident the fear factor will no longer be in play in 2010.”
However, foreclosures are "not out of the woods yet,” he said. “It will turn worse before it turns better.” It could be the 2nd quarter of 2010 before foreclosures begin to bottom out, although he doesn’t think the continued high foreclosure numbers will impact the market as negatively as recent months. “There is demand to absorb the inventory quickly,” he said.
International sales will play an increasing role in the U.S., based on long term trends, including currency exchange rates, he said. “I think there will be a steady increase in international transactions,” he said.
-The ugly black cloud hovering over the convention is the U.S. commercial real estate market.
Presentations on the state of the market tended to carry titles like, “The Coming Tsunami.” Even industry cheerleaders found it difficult to put a smiley face on the situation.
“The commercial area has completely dried up,” said incoming NAR president, Vicki Cox Golder.
At the heart of the gloom, industry analysts estimate more than $1.4 trillion in commercial real estate loans are coming due in the next five years, give or take a few billion, according to industry estimates. (See "Is U.S. Commercial Market a 'Time Bomb'")
“There are no obvious sources of capital to adequately refinance debt,” said Robert Goldstein, c.e.o. of Hospitality Consultants. And a “significant number” of properties are already fallen in value.
But there are a variety of opportunities for brokers and investors, even if there are few actual sales of property, Goldstein said. From receiverships to mezzanine financing, brokers can play a role in the industry’s struggles.
His message to brokers “You have to reinvent yourself.”
-The Global Referral Network officially launched at the convention, offering the world’s largest referral system. The system already boasts more than 500,000 members, including 100 of the largest associations in the U.S. and the French association of real estate professionals, Fédération Nationale de l'Immobilier (FNAIM).
Referral partners are found using map search, with results filtered by professional designation, franchise brand, specialty or language spoken, according to a press release. Cross-language technology supplied by Immobel, the real estate translation service company, allows agents to communicate in their own language, translated into 13 languages. (Disclosure: Immobel c.e.o. Janet Choynowski is publisher of the IPJ.)
-NAR is “completely restructuring” its international operation, new NAR president Golder said in a media briefing, reiterating previous comments from the organization. “We want to make sure our agents can serve” the growing international presence, especially in states like Florida and California, she said. “We’re going to make every effort at NAR to make sure we’re ahead of that growth.”
The number of NAR members is lower than last year, “but above what we budgeted,” she said.
Asked about the impact of Google on the portal business, Golder said, “Realtor.com is still the number one Web site in the world and so far they (Google) have not threatened that.” When NAR announced the creation of the Realtors Property Resource last week, speculation mounted that NAR may be planning a shift in its Web portal strategy, but Golder said there no plans in the works, stressing NAR is still the “number one source for information.”
-First time buyers accounted for a record 47 percent of all home sales in the last year, a record, according to NAR’s annual home buyer and seller survey. Tax incentives, “affordability conditions” and pent-up demand helped spike first-time buyer sales, according to NAR v.p. of research Paul Bishop. The previous high was 44 percent in 1991.
The survey also found that 12 of the buyers owned at least two homes and three percent own three or more homes.
-Longtime NAR executive Jeff Hornberger, who spent eight years in the international division before moving over to the commercial real estate division, is returning to international. His new title is director, global alliances, focused on managing NAR’s 80-plus partnerships around the world.
