Making Selling A Home Cheaper

On Friday, Yahoo Finance posted an article about a change in the commission rate that many realtors will make when selling a home.

The article reports:

The 6% commission, a standard in home purchase transactions, is no more.

In a sweeping move expected to dramatically reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.

The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One prohibits agents’ compensation from being included on listings placed on local centralized listing portals known as multiple listing services, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries — where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.

…By some estimates, real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights. This will open up opportunities for alternative models of selling real estate that already exist but don’t have much market share, including flat-fee and discount brokerages.

I have very mixed emotions on this. I support the change because I think it was needed in view of the inflation of house prices in recent years. A 6 percent commission on selling a house for $100,000 would be $6,000. Obviously some of that commission would be paid to the Real Estate Agency–the agent would not be able to keep the entire amount. According to Statista, the average price of a house sold in 2023 was &511,100. The real estate agent’s commission on the sale of that house would be approximately $30,000. I realize that the agent has expenses-a photographer to photograph the house, the cost of multiple listing, etc., but that seems high. I hope with this lawsuit, we will get back to more of a free market in real estate sales where the rate is competitive. I don’t want to see either a private or government monopoly determining real estate commissions.

Bidenomics At Work

Aside from what you are paying for groceries and gasoline, have you looked at mortgage rates and home sales right now?

On Monday, One America News reported the following:

Sales of new U.S. single-family homes fell more than expected in October, likely as higher mortgage rates reduced affordability, but the housing segment remains supported by a persistent shortage of previously owned properties on the market.

New home sales dropped 5.6% to a seasonally adjusted annual rate of 679,000 units last month, the Commerce Department said on Monday. September’s sales pace was revised lower to 719,000 units from the previously reported 759,000 units.

Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, would fall to a rate of 723,000 units.

New home sales are counted at the signing of a contract, making them a leading indicator of the housing market. They, however, can be volatile on a month-to-month basis. Sales increased 17.7% on a year-on-year basis in October.

The stock of previously owned houses on the market is nearly 50% below it’s pre-pandemic level, according to the National Association of Realtors, which last week reported that home resales plunged to more than a 13-year low in October. Most homeowners have mortgage rates under 3%, making many reluctant to sell, boosting demand for new construction.

According to The Mortgage Reports, the mortgage interest rate in 2021 was 2.96 percent. In 2022, it was 5.34 percent. The current mortgage rate, according to Nerd Wallet is about 7.5 percent. That is a significant increase. Interest rates were artificially kept low for a number of years. That was not sustainable. However, the rate of increase (the Federal Reserve’s attempt to curb inflation) has hurt real estate sales. At one point many years ago because of a job change, we were forced to take out a mortgage at 8.5 percent (giving up a mortgage of 4 percent). If you are sitting on a 3 or 4 percent mortgage right now, the last thing you want to do is move and take out a 7.5 percent mortgage. Bidenomics has hurt Americans across the board. We need a new President with a new approach to the economy.

A Second Chance?

The elections last week did not go well for Republicans. There were a lot of reasons for this, some real and some made up by non-Republicans. One state that had disappointing results was Virginia–the Democrats retained control of the Senate and retook the House of Delegates. Well, that may not be the end of the story.

On Saturday, Townhall reported:

We have reports that some funny business with a Virginia Democratic state senator might give control of the upper chamber to the Republicans. The Daily Wire’s Luke Rosiak wrote that there might be serious questions regarding the validity of Sen. Ghazala Hashmi’s residency. You must live in the district you’re representing, and multiple sources say Hashmi’s paperwork is inaccurate. Hashmi represented Senate District 10 but opted to run for the 15th district this cycle post-redistricting. The reason is apparent: this is a slam-dunk blue district encompassing parts of Richmond and Chesterfield County

On Saturday, The Daily Wire reported:

…Hashmi filed candidacy paperwork saying she lived in an apartment on Boulder Lake Drive in North Chesterfield in Senate District 15.

But four neighbors filed a complaint saying she actually lives outside the district on Bosham Lane in Midlothian, and they provided a spreadsheet saying they had driven by the house 62 times during the month of October to document her residency. The notes include her car being there late at night and early in the morning, and her leaving the house shortly after 8 a.m. It also includes photographic evidence.

Putting Hashmi in a particular bind, if she did live in the Chesterfield apartment, then she may have committed a felony by concealing her ownership of the Midlothian home on sworn election forms.

The Certificate of Candidacy Qualification, which she signed March 14, 2023, says, “I now reside at the address shown below in the district in which I seek office,” under which she listed the North Chesterfield apartment.

The form also asks, “Do you or a member of your immediately family, separately or together, hold an interest valued at more than $5,000 in real property? DO NOT INCLUDE your principal residence.” She checked “no,” and did not list the Midlothian home. Real estate records show that she and her husband have owned that — worth nearly $600,000 — since 1999.

Stay tuned.

 

Using The Law Against Your Political Opponents

The story below is one of the things that makes me wonder about the future of America. Somehow we have lost the concept of equal justice under the law and many legal actions have become totally political.

On Tuesday, The Washington Examiner reported the following:

A POLITICIZED, GROSSLY UNFAIR LAWSUIT AGAINST TRUMP. Former President Donald Trump testified Monday at the trial of the lawsuit, filed by New York Attorney General Letitia James, alleging that Trump inflated the values of his real estate properties to receive lower interest rates on loans. It’s important to note that Trump has already lost the case. The judge, Arthur Engoron, weeks ago pronounced Trump guilty of the actions alleged, and what is going on now in court is the penalty phase, in which Engoron will decide whether to confiscate Trump’s business empire.

The punishment will be extraordinary and unprecedented. This is how Axios has described it: “Former President Donald Trump is at risk of losing the New York real estate empire that the rest of his career was built on. Forcibly dismantling Trump’s company is so unusual that no one is quite certain how it would play out.”

Engoron could decide to cancel the business certificates of all of Trump’s companies. “If the business certificates were canceled,” Axios continued, “the relevant assets — which include Trump Tower, Trump Park Avenue, 40 Wall Street, and Trump National Golf Course Hudson Valley — would be put under the control of a court-appointed receiver, who operates much like an executor of an estate. The receiver would continue to manage the properties, but also could be allowed by the court to sell some — particularly if cash was needed to pay off legal penalties or creditors. Trump, who views himself as a consummate dealmaker, would not be at the negotiating table.”

That is a punishment so out of line with the behavior alleged in this case that it boggles the mind. It is made possible by two factors: a bad law and a hyperpoliticized attorney general. On the bad law, New York’s Executive Law 65(12), the former federal prosecutor Andrew McCarthy wrote: “The law doesn’t require a showing of harm. The state need not prove the defendant even intended to defraud anyone, much less actually defrauded someone. It need not be established that any creditor or financial institution even relied on the defendant’s misrepresentations, that those misrepresentations were material, or that anyone was actually fooled by them.” There need be no victim — after all, in this case, no bank or financial institution is suing Trump for cheating them, nor does there need to be any crime involved — in fact, prosecutors looked at the same evidence and declined to charge Trump.

Hopefully this case will eventually suffer the same fate as the case against former Virginia Governor Bob McDonald. However, the damage done in getting there will be immense and inexcusable.

Voting With Their Feet

Yesterday The New York Post posted an article about what is happening to the cost of living in New York City.

The article reports:

More than a third of all city residents say they can’t afford to live anywhere in the state — much less the Big Apple — and believe economic hardship will send them packing in five years or less, according to a dismal new poll.

That’s 41 percent of city dwellers who say they can’t cope with New York’s high cost of living, according to a Quinnipiac poll published Wednesday.

Separately, 41 percent fear they’ll be “forced” to pull up stakes and seek greener pastures where the economic climate is more welcoming.

“They are making this city a city for the wealthy, and they are really choking out the middle class,’’ said Ari Buitron, a 49-year-old paralegal and born-and-bred New Yorker from Forest Hills, Queens.

The cost of taxes and housing have driven many residents south:

Even well-heeled New Yorkers are being lured down south thanks to New York’s hefty tax burden and new federal tax policies that punish high-tax states, according to Miami property magnate Gil Dezer.

“Because of the city tax and the non-deductibility of your real estate taxes, we’re seeing a lot more people with piqued interest,” he told The Post.

The poll’s findings reinforce research done by the Empire Center for Public Policy that shows that New York leads the nation in terms of residents jumping ship.

“It’s not surprising. The out migration downstate is first and foremost about affordability. Rent and property taxes downstate are very high,” said the Empire Center’s E.J. McMahon.

Right now, a very large percentage of Americans live in New York City and Los Angeles. If the electoral college were eliminated, these cities would essentially elect our President. However, if these cities continue to lose population, eliminating the electoral college, despite the fact that it would be a foolish move, might not have the effect those calling for its elimination desire.

Why Many Americans Are Losing Faith In Their Government

Yesterday The New York Post posted a story illustrating one way that some of our politicians exploit their offices. I suspect that what went on here may actually be legal, but that does not necessarily make it right.

The story reports:

The US Postal Service plans to sell 56 buildings — so it can lease space more expensively — and the real estate company of the California senator’s husband (Sen. Dianne Feinstein), Richard Blum, is set to pocket about $1 billion in commissions.

Blum’s company, CBRE, was selected in March 2011 as the sole real estate agent on sales expected to fetch $19 billion. Most voters didn’t notice that Blum is a member of CBRE’s board and served as chairman from 2001 to 2014.

This feat of federal spousal support was ignored by the media after Feinstein’s office said the senator, whose wealth is pegged at $70 million, had nothing to do with the USPS decisions.

It would be nice if, just for the sake of appearances, Mr. Blum chose not to participate in the deal.

The Recovery Doesn’t Seem To Be Recovering Very Well

Yesterday Ed Morrissey posted an article at Hot Air about the latest report to come out on the housing market. The National Association of Realtors reported that the market for both new homes and existing homes went down in March. March was the third month out of the past four months when sales of existing homes have gone down.

The article reports:

Residential real estate remains the economy’s soft spot, challenged by stricter lending standards, lower home values and the threat of more foreclosures. An improved labor market and mortgage rates near historic lows have yet to stoke bigger gains in demand.

The article further states:

The description of an “improved labor market” applied more in February than it did in March.  Last month, the US only added 120,000 jobs, barely enough to keep up with population growth.  Even before that, the previous three months added around 650,000 jobs in the aggregate, which means actual growth above population increase of about 300,000 jobs — which wouldn’t greatly increase demand in the housing market, but shouldn’t result in a decrease in demand.  First-time buyers still only account for a third of these purchases, when the normal level is around 40%, according to Bloomberg News.  That’s an indication of a lack of confidence among younger adults.

I am not an economist, but it seems to me that until people feel they have secure jobs, they won’t buy houses. I also wonder if the fact that it used to cost $30 to fill up a gas tank and now costs $60 might have people saving their pennies in case things get worse.

 

Enhanced by Zemanta