January 10, 2007

Happy New Year!  As we begin 2007, we are pleased to introduce you to your new member e-newsletter, On the Home Front.  This semi-monthly publication is designed to provide you with timely information on real estate industry issues and trends, activity in the local housing market, and programs and services provided by the Greater Boston Association of REALTORS®.  We hope you find the material contained in On the Home Front to be of value to you in your business, and encourage you to watch your mail for the Greater Boston Real Estate Board’s new quarterly magazine, Real Estate CONNECTIONS, due out later this month, which will contain additional news and information from the organization.

NAR forecasts sluggish sales, modest price gain for 2007
While housing demand has increased in recent months and home prices appear to be stabilizing locally, the National Association of REALTORS® is forecasting a year of sluggish expansion in the residential real estate market for 2007 with sales expected to be flat or down slightly from this past year in most areas of the U.S.  In addition, NAR Chief Economist David Lereah notes that while “Most of the correction in home prices is behind us, . . . general gains in value [in 2007] will be modest by historical standards.”  Click for forecast

Across the country, existing home sales are projected to fall by 8.6 percent in 2006, then slip another 1 percent to 6.40 million homes sold in 2007.  Furthermore, new homes sales are estimated to drop 17.7 percent during 2006, and likely will decline another 9.4 percent this year to 957,000 units.  Much of the contraction in the new home market is due to a sharp decrease in production that has occurred over the past 12 months as builders look to support pricing for current inventories, said Lereah.  Accordingly, housing starts are projected to be off 12.3 in 2006 and may decline another 15 percent to 1.54 million units during 2007.

Meanwhile, once final data is available, NAR’s forecast indicates that the U.S. median existing home price will have risen a modest 1.4 percent to $222,600 during the past 12 months, and will increase just 1 percent in 2007 to $224,700.  NAR economists also estimate that the national median price for new homes will slide 0.5 percent to $239,700 for 2006, but rebound 0.8 percent to $241,700 in 2007.

In the 54 cities and towns comprising Greater Boston Board’s jurisdiction, preliminary data indicates that the median selling prices for single-family homes fell 2 percent this past year, from $489,900 in 2005 to $480,000 in 2006, and the median selling price for condominiums slipped 1.2 percent over the past 12 months, from $345,000 in 2005 to $340,850 this past year. In addition, annual sales of single-family homes are projected to drop 11 percent from 2005 to 2006, while condominium sales should end 2006 down 13 percent from the previous year.

Study demonstrates value REALTORS® bring to the transaction
Looking to quantify your value to consumers?  A new study of home buyers and sellers in Massachusetts reveals that homes sold with the assistance of a real estate professional typically sell for 23.4 percent more than homes sold by their property owner.  Specifically, data obtained from the 2006 Profile of Home Buyers & Sellers report produced by the National and Massachusetts Associations of REALTORS®, shows that Bay State homeowners who used a real estate broker to help sell their home realized a median selling price of $385,000 compared to just $312,000 for the typical For Sale By Owner (FSBO) property.

Not surprisingly given this disparity in selling prices, the study also found that among Massachusetts homeowners who engaged an agent to help sell their home, 93 percent used a full-service brokerage, 7 percent used a limited service agency, and less than 1 percent chose a minimum service firm, such as one in which “the agent listed the home on the MLS and performs few, if any, additional services.”   

Those agents and offices practicing buyer agency also should be heartened to learn that today’s home buyers are increasingly seeking out the services of a buyer representative.  In fact, this past year over three-quarters (78%) of local consumers in the market to purchase a home opted to work with a buyer agent, a steady increase from just two years ago – prior to the passage of REALTOR®-backed legislation clarifying the state’s agency law – when just 46.8 percent of buyers used a buyer representative to help them find a home.

To learn more about the demographics, housing preferences, and home buying and selling experiences of today’s consumers, including the role and services they want a real estate agent to perform during the home search and sale processes, you can view an Executive Summary of the 2006 Massachusetts Profile of Home Buyers & Sellers report or access the entire study by visiting the Housing & Research Data section of marealtor.com.

Help Your Clients and Customers Avoid Foreclosure
Massachusetts, like many other states, has seen a surge in foreclosure activity during the past year – a trend that’s being blamed locally on the Bay State’s high housing costs, which led many home buyers to finance their purchases with adjustable rate loans or exotic mortgages, such as interest-only mortgages, rather than a traditional 30-year fixed rate home loan in recent years.  While these specialty mortgages can be effective in helping consumers, particularly first-time buyers, achieve the American Dream, they also carry with them a certain amount of risk.  To help educate and guide your clients/customers to make the best decision regarding their mortgage options, NAR has prepared several informational brochures which are available online for you to order, download or link to on your website.  To access these brochures which examine the risks and advantages of specialty mortgages, the criteria for obtaining a FHA mortgage, the options available in the traditional mortgage market, and the steps one can take to avoid becoming a victim of predatory lending, click here.

Defeat of transfer tax initiatives highlight public policy successes in 2006
With the 2005-2006 legislative session on Beacon Hill now over, it’s evident that the past year will be remembered as another successful one for REALTORS® and the Greater Boston Real Estate Board.  Among the most notable public policy victories for the industry and property owners during the past year, was the GBAR-led grass-roots effort to defeat a real estate transfer tax proposal in Westwood that would have imposed higher housing costs on home buyers and sellers.  The association also worked closely with the Massachusetts Department of Fire Services to ensure that new regulations implemented to enforce the state’s new carbon monoxide detector law did not unduly burden homeowners or landlords.  Additionally, GBREB was successful in securing passage of new expedited permitting rules designed to spur new residential and commercial development, and worked to defeat efforts aimed at weakening Chapter 40B, the state’s comprehensive permit law.  A summary report of industry-related public policy issues addressed by GBREB during this latest legislative session is available online from at www.gbreb.com.

Have You Renewed Your Membership?
Renewal of your REALTOR® membership is an investment in your career and enables GBAR, MAR and NAR to provide programs and services that will protect your business interests and help you to prosper both financially and intellectually, as a real estate professional.  If you have already renewed your membership for 2007 we thank you.  If you have yet to renew for the new year, we are pleased to announce a waiver of the $25 late fee typically assessed to members who do not pay their dues by December 31^st until the end of this week.  That’s right, pay your 2007 REALTOR® dues by January 16^th and we will waive the $25 late fee.  Payments may be made by credit card either online by clicking here, (Login ID = Member #, Password is your last name) or by calling GBREB at 617-423-8700, or send a check made payable to the Greater Boston Real Estate Board to the GBREB, 11 Beacon Street, Boston, MA. 02108.

Volunteers Sought for GBAR Committees
If you are interested in taking an active role in implementing association programs or would like to become a decision-maker and leader within the REALTOR® organization, we invite you to apply for service on a GBAR committee in 2007.  There are more than a half dozen committees you may choose to serve on during the coming year, including Communications, Community Service, Education, Membership, and Professional Standards.  To express your interest in serving on a GBAR committee, simply complete the online Committee Request Form and submit it by January 26^th.  Participation on GBAR committees is open to any association member in good standing, though some committee service may stipulate that you first meet specific service requirements.  Appointments to 2007 committees will be made by GBAR leadership by the end of January, with most committees expected to hold their first meeting in February.

GRBEB Installation set for January 25
All members are invited to attend the Greater Boston Real Estate Board’s Installation program scheduled for January 25^th at the Doubletree Hotel in Waltham.  The evening will begin with a cocktail reception at 5:30 p.m. followed by the installation ceremonies at 6:45 p.m., which will include an address by installing officer Allan Dalton, current president of the real estate division of Moves, Inc., the company that oversees REALTOR.com.  We hope you will join us for this festive evening to show your support for the 2007 GBREB leadership – Chairman Richard J. Loughlin, Jr., vice president of Central New England for Coldwell Banker Residential Brokerage; Chairman-elect William M. McLaughlin, senior vice president of development for Avalon Bay Communities, Inc.; Treasurer Thomas O’Brien, an executive vice president and managing partner with JPI; Assistant Treasurer Susan M. Wolkoff, an executive vice president with Bank of America; and Clerk James A. Canfield, executive vice president of McCall & Almy, Inc. – and its five division presidents, including 2007 GBAR President Patty Libbey, as they are officially installed into office. Tickets are $40 per person - Click Here for Registration or call Cathy Stewart at 617-399-7861 to purchase your tickets.

GRI 102 Course to be Presented in Waltham
Are you pursuing your Graduate, REALTOR® Institute (GRI) designation?  If so, you may want to consider enrolling in the GRI 102 course, “Managing Risk,” which will be presented February 6-7 at the Massachusetts Association of REALTORS® offices in Waltham.  The two-day GRI 102 class provides instruction on risk reduction, including a discussion on Chapter 93A and contract law, as well as issues related to working with buyers and financing the sale.  Attendees who successfully pass the class also receive eight hours of continuing education credits.  Tuition is $225 if received by January 30^th, and $250 for those who enroll less than one week prior to the class.  To register, use the online calendar at marealtor.com or call MAR at 800-725-6272.  For a calendar of all GRI courses scheduled to be presented in Massachusetts during 2007 visit the Professional Development section of marealtor.com.

Earn Six CE Credits at January 30^th GBAR program
Members in need of continuing education credits to renew their license are encouraged to enroll in the continuing program being offered by GBAR on January 30^th at the GBREB offices at 11 Beacon Street in Boston.  The program will include CE sessions on Residential New Construction (9-11 a.m.), Title 5 (11:15 a.m. – 1:15 p.m.), and the Wetlands Protection Act (2-4 p.m.), all of which will be taught by instructor Paul Yorkis.  Registration is $45 per class or $105 for members who attend all three courses.  Register on line, call 617-399-7853 or email: GBAREducation@gbreb.com.  Don’t delay as seating is limited to 30 students for this program.

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