Photograph by Kathy De La Torre
The Internet is definitely trendy, but generic sites won't do as well as individual sites like this one by Los Gatos Realtor Ducky Grabill.
Convention offers real estate predictions
By Sue DeRosier
Recently 23,000 Realtors from around the nation descended on San Francisco to attend the National Association of Realtors (NAR) annual conference and Expo. In addition to showcasing 1,500 products and services in the exposition hall, the conference gave real estate professionals and their associates an opportunity to learn about a variety of issues and trends during the four-day conference.
The session on economic issues and trends featured Dr. David Lereah, NAR's chief economist, who outlined the forecast for 2001.
"The prolonged period of our economic expansion, driven by new technologies that increase efficiency and keep productivity high despite a tight labor market, is likely to continue based on the traditional factors that influence the economy," said Lereah. "The economy's slowing like a train--there's a lot of momentum and it would take an unusual combination of events to derail it, but with the Fed tapping on the breaks, we're expecting a soft landing in 2001."
Lereah tempered the good news with a number of variables that could turn the tide of the positive economic outlook. He stressed that rising oil prices, additional corrections in the stock markets and a further tightening of credit could trigger some weakness in the economy. In a worse-case scenario, he pointed to these factors as creating a recession.
"I don't think a recession is likely because all the indicators point to a soft landing in 2001, with housing activity near the same levels as this year. In other words, next year should be in the top four on record for home sales," Lereah said.
According to NAR's forecast, existing home sales across the nation are expected to slip 0.5 percent from the projected total of 5.04 million this year to about 5.01 million sales in 2001. Interest rates, however, had a more positive outlook for next year.
"We expect the 30-year fixed mortgage interest rate to hover around 7.8 percent for all of next year, with no significant movement," said Lereah. "This stability should contribute to a more event level of sales activity, where we can avoid the problem of inventory shortfalls that plagued many markets around the country earlier this year."
The median price for a home is expected to increase nationwide by 4.7 percent in 2001 to $145,300, while California's median price was $247,000 statewide and $532,000 in Santa Clara County in the third quarter of 2000 alone. According to the California Association of Realtors, California's prices tend to follow two prevailing indicators--supply and demand, and the rise and fall of the stock market, primarily the Nasdaq.
In addition to the economic forecasts, several other "hot topics" were introduced and discussed at the November conference, including increased use of the Internet for real estate transactions, developing a higher level for conforming loans, and a nationwide bill on credit scoring disclosure that follows California's landmark decision.
The California State Assembly passed SB 1607 in August that requires lenders to provide consumers with specific credit information, including their individual score and how it was determined. According to NAR Conference attendee, Susan Tilling, broker, Coldwell Banker, Menlo Park, the board of directors at the national meeting voted to lobby Congress for a nationwide bill designed on the same principles as California's legislation.
"California consumers won a victory when SB 1607 passed and now it looks like the rest of the nation will have the same door opened for them as well," said Tilling.
Tilling also felt that one of the more important regulatory issues to come out of the recent conference was NAR's decision to support the increase of conforming loan levels as a way to help high-priced markets, such as California.
"Conforming loans such as a buyer might receive from the FHA or VA constitute loans valued at $252,700 or less and usually receive a slightly lower interest rate," stated Tilling. "In our market where million dollar homes are commonplace, $252,000 doesn't go very far."
The intention of NAR, according to Tilling, is to create special exceptions for states like California, where not only the loan level would be raised, but additional dispensations will create more attractive mortgage packages.
"Hawaii, Alaska and the Virgin Islands already have higher conforming loans and special considerations, so it is just a matter of bringing California, which has the 10 highest-priced markets in the country up to the same level," Tilling said.
Dave Barca, director, business development, ziprealty.com, agrees with Tilling that the increased loan valuation will help those buyers who are just entering the market for the first time, or are single-income homeowners. In addition to this issue, though, Barca as a senior officer of an ecommerce real estate company found the symposium discussions on Internet growth and technology to be extremely relevant to what he sees in the Bay Area.
"The message that came through loud and clear is that consumers have unlimited access to information on the Internet and they are using it, so instead of fighting this trend, why not be the ones who "provide" the access and information?" said Barca. "Those brokers who have their own websites, keep them updated daily and provide detailed information so consumers will find that their potential customers will come back to their site over a national site like www.realtor.com because the accuracy of their specific market is better."
During the technology sessions, brokers and Realtors alike were encouraged to become certified Internet professionals through a new program NAR is offering called ePro. Presented entirely online, Realtors can usually complete the curriculum in approximately 20 hours, but they have up to six months to become certified. The course teaches the Realtor about Internet business principles, including operational, marketing, protocol, standards and behavior, and legal issues of Internet-based transactions.
Technology and its use permeated the exhibit hall where everything, from wireless devices to electronic transaction forms with electronic signature capability, were on display.
"For people in the Bay Area, using technology as a way of life is not the same radical shift that it is for someone from the Midwest or South, but many real estate offices here still need to make the change from traditional 'bricks and mortar' to 'clicks, bricks and mortar,' " Barca said.
Regardless of the technology that is used by a Realtor or broker, or whether they have all the bells and whistles to operate an interactive website, Barca contends that the main issue across the board is still customer service.
"Technology will be adopted because that is what the consumer wants, but they also want to know that when they do decide to pick up the phone after they have done their initial research that there is a qualified, knowledgeable, empathetic professional there to help them," noted Barca. "At that point, whether the company is all Internet based or a traditional real estate office doesn't matter. Good customer service will level the playing field."
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