An unexpected settlement, an unexpected resignation and the unexpected closing of 1,000 stores. From the wild and wooly world of real estate, here are the Hits and Misses for the week of March 11-15.
Miss: NAR’s White Flag. The National Association of Realtors surprised many people earlier today by agreeing to a $418 million settlement that resolves the charges brought in the Sitzer/Burnett case. The settlement requires NAR to jettison its rules requiring that most residential listings include an upfront offer that informs the buyers’ agents how much they will get paid. NAR is not required to admit wrongdoing in the settlement, which comes one month after the organization vowed to appeal the Sitzer/Burnett verdict. While some observers are crowing that this will lead to lower home prices, there is a better-than-average chance that NAR’s detractors who pushed for this resolution will unleash the proverbial “be careful what you wish for” situation once the dust settles.
Miss: Disappearing Fudge. Another big surprise this week was the announcement that Housing and Urban Development Secretary Marcia Fudge was resigning. Her abrupt exit comes as the Biden re-election campaign belatedly acknowledged the many problems impacting the housing market. During her time at HUD, Fudge offered no new or innovative ideas to address these problems – nor did she even bother to acknowledge that the problems grew deeper over the past three years. It is unlikely that a successor will be named during this election year, and hopefully in 2025 we can have a HUD leader who can reanimate this sleepy department with vigorous and imaginative ideas instead of the same-old formula of grants and pilot programs that never seem to fix what is wrong.
Miss: Disappearing Dollar Stores. The biggest surprise on the commercial real estate side of the industry involved Dollar Tree Inc.’s announcement to close 1,000 stores operating under the Dollar Store and Family Dollar brands. The news of the closure came during the company’s quarterly earnings report, when Chairman and CEO Rick Dreiling declared, “We finished the year strong, with fourth quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments.” That might come as a surprise to the low-income households that rely on their soon-to-disappear stores, which are among the few retail outlets that have not seen crazy price spikes that became a hallmark of the Bidenomics era.
Miss: Not-So-Funny Wacky Weed. New York City is often called the “City That Never Sleeps,” but according to the New York Post that moniker is because apartment-dwelling residents are being aggravated from the stench created by their pot-smoking neighbors. Many of the city’s apartment buildings have notoriously thin walls, which explains why the marijuana scent gets shared between units. One tenant in a fourth-floor walk-up complained, “The smell is so strong it wakes me up or makes it hard to relax and go to bed.” Gee, didn’t anyone think this could be a possible downside back in 2021 when the city agreed to recreational cannabis legalization?
Miss: The Smaller Apple. For some New Yorkers, obnoxious pot-smoking neighbors were among the many things they are not missing as they exit for life elsewhere. The U.S. Census Bureau found New York City’s population lost nearly 78,000 residents in 2023, while nearly 550,000 residents – more than 6% of its population – moved out between April 2020 to July 2023. Incredibly, city officials are trying to cook those numbers by pointing to the large influx of illegal immigrants that moved in. A spokesperson for the Department of City Planning said his office was going to be “working with the Census Bureau to adjust the estimate” regarding outbound migration.
Hit: The New Homeowners. Some much-needed good news came via the National Association of Hispanic Real Estate Professionals (NAHREP), which reported the Hispanic homeownership rate reached 49.5% in 2023, with a net gain of 377,000 owner-households – the largest single-year increase since 2005 and the largest homeownership rate upswing for any racial or ethnic demographic group compared to the year prior. NAHREP noted Hispanic homebuyers during 2023 were at a median age of 30.7, making them the youngest racial or ethnic demographic – more than 10 years younger than non-Hispanics. This data was the saving grace in a week where the news was often anything but happy.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
;
“ requires NAR to jettison its rules requiring that most residential listings include an upfront offer that informs the buyers’ agents how much they will get paid.” is this not posted in the MLS as a required field when entering a listing in the MLS? Are buyer’s agents not seeing this in the listing or on the purchase contract? How this issue became a problem still befuddles me!
The new requirement is to Jettison, meaning remove the offer of compensaiton
I agree 100%. This is just another class action suit where attorneys get a lot of money and the consumer wont get anything much but grief. It was not like anything was hidden from anyone. I’m sure the powers that be will come up with a solution that does not change anything but semantics.
I agree with you Jay! What NAR has done says to me – Buyer Agents
are stabbed in the back! NAR sold us out! How many first time home buyers are going to be able to afford to pay their Buyer Agent on top of their closing costs and down payment! One cannot build that on top of the loan, especially with an appraisal! I live in a rural town 50 miles north of Baltimore, MD and 50 miles south of Harrisburg, PA. I sell homes in this area and our first time home buyers are hard working young people, but not overloaded with extra cash! I have been a working Realtor for over 26 years.
Buyers will wind up paying more on average. The vast majority of sellers will not reduce prices because of lowered seller commissions and the buyers will make up the difference. Plus coming up with more down because buyers’ commissions probably won’t be financed will drive some buyers out. A lose-lose proposition
I’ve been a commercial broker for over 40 years. In the much older versions of the commercial C.A.R. purchase agreements, we would ALWAYS insert a provision in the agreement of how much the seller would pay the buyers broker. Everyone knew what was expected and in the event a seller backed out of a transaction, the buyer’s law suit to perform would automatically include the commission provision.
In many cases, the selling office commission will be added to the listed price