Guam Association of Realtors donates $30k for H-2B legal fees

The Guam Contractors Association received a $30,000 donation from the National Association of Realtors and the Guam Association of Realtors during the GCA monthly membership luncheon at the Hyatt Regency Guam on Wednesday.

The money was donated to help pay for a legal battle related to federal restrictions in the use of foreign labor on Guam. A significant drop in the number of foreign construction workers is impacting the cost of construction and the ability of contractors to take on new projects. 

The H-2B visa crisis has created concerns for realtors as well as contractors, Guam Association of Realtors president Maria Miller said. 

The donation consisted of $5,000 raised by the Guam branch and $25,000 from the National Association of Realtors, chief executive officer and government affairs director Peggy Araullo Llagas said. 

Fewer contractors means higher costs for property renovation and turnover, Miller said. It also means less inventory, which leads to higher prices. 

“No one is buying land right now. And forget the local buyer,” Miller said. “Chinese investors have the cash to come in and buy existing properties at higher prices, so local investors are priced out of that market.” 

The association was moved to donate money after a GCA presentation about the H-2B visa issue, Miller said. 

“We knew about it, but we didn’t realize how much it affected everyone until that presentation,” Miller said. “Then we said, we have to do what we can to help.”

The money will go a long way in dealing with upcoming legal fees, GCA board Vice Chairman John Robertson said. 

According to Roberston, GCA has raised and spent $85,000 in legal expenses for the lawsuit, in which a dozen local businesses filed suit against the federal government contesting mass denial of H-2B temporary worker visa applications. 

Robertson projects another $40,000 in legal fees coming up. 

According to Roberston, the Guam District Court hearing the lawsuit is “still being non-responsive.” 

“Motions have been filed from both sides, and ignored. Even scheduling motions have been denied. So there’s some frustration,” Robertson said. 

Groups from the Guam Legislature, Chamber of Commerce, governor’s office and others have reached out to Washington, D.C. on the H-2B issue, Robertson said, with some results.

“It appears that the House and Senate Armed Services Committees, in their National Defense Authorization Act, will put forth authorization for visas for construction projects on Navy bases,” Robertson said. “Of course, that doesn’t really affect our problem until maybe spring of next year, but it does go a long way.” 

READ MORE: 

Reporter Kyla Mora covers Guam’s business community, economy, tourism, public health, and anything else that catches her interest. Follow her on Twitter @kylapmora. Follow Pacific Daily News on Facebook/GuamPDN and Instagram @guampdn.

 

Economy Watch: China Named Top Buyer, Seller of US CRE – Multi

China was the top country for both buying and selling U.S. commercial real estate in 2016, with Florida as the top destination for all international clients, followed by Texas, according to the 2017 Commercial Real Estate International Business Trends survey, which was released recently by the National Association of Realtors.

One-fifth of surveyed realtors practicing in commercial real estate closed a sale with an international client in 2016, the survey found. Moreover, as foreign investors flock to smaller-sized commercial properties in secondary and tertiary markets, realtors also expressed confidence that there will be increased sales and leasing activity involving foreign investors this year compared with last.

Nearly two-thirds of commercial foreign buyer and seller clients in 2016 were non-resident foreigners. The top countries of origin for buyers were China (17 percent), Mexico (14 percent) and the U.K. and Venezuela (both at 7 percent). Sellers were typically from China (17 percent) or Brazil, Canada, France and Mexico (all at 10 percent).

Of the 69 percent of realtors who said they completed a CRE transaction last year, 20 percent reported closing a deal for an international client. Realtors completed a median of one buyer-side international deal and two seller-side international transactions, with a median buyer-side sales price of $1 million, and a median seller-side price of $550,000.

Also, 22 percent of realtors said they completed a lease agreement on behalf of a foreign client. The median gross lease value for international lease transactions was $105,000, with most space typically under 2,500 square feet.

NAR 2017-commercial-international-infographic

Divide widens between housing haves and have-nots

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May existing home sales up 1.1%


The median price of an existing home sold in May set a record high, but it’s not the price itself that is so stunning.

It’s the math behind that price that indicates how difficult it has become for the average American to become a homeowner. It also explains why the national homeownership rate remains stuck near its historic low.

The National Association of Realtors reported the median price of an existing home is $252,800, a 5.8 percent increase from the price reported in May 2016. The key here is that the calculation is done using a median figure. That means half the homes sold in May were priced higher, and half were priced lower. Other measures of home prices use so-called repeat sales figures, meaning they are looking at the year-to-year gains that the same or similar houses would see.

Using a median gives us a better look at not just the price, but what price points are selling — and that is key. If more expensive homes are selling, that skews the median higher, and that is now the case.

Sales of existing homes priced below $100,000 dropped 7 percent year over year, and sales of homes priced between $100,000 and $250,000 rose just 2 percent, according to the NAR. On the other side, sales of homes priced over $500,000 jumped more than 20 percent and sales of million-dollar homes surged nearly 30 percent.

The issue is both a wealth gap and a supply crunch.

“There is a housing shortage everywhere and a housing crisis in some markets,” said Lawrence Yun, chief economist for the NAR.

There are very few low-priced homes for sale, and far more expensive homes for sale. Homebuilders may claim they are increasingly targeting that first-time buyer, but their price points even for entry-level homes are still mostly above $200,000. Investors, who often have the advantage of all-cash offers, bought and continue to buy lower-priced and distressed homes, taking advantage of high demand for single-family rentals. It is difficult for first-time, mortgage-dependent buyers to compete.

“Because of the run-up in home prices, it’s making it more difficult for renters to convert into home ownership,” said Yun. “We are essentially stuck at a 50-year low in the homeownership rate.”

This is occurring at a time when overall housing equity has doubled, roughly, from $6 trillion to over $13 trillion in the past five years.

“Yet the renters are not participating in this wealth, so there is a greater divide between owners and nonowners,” said Yun.

There is most definitely high demand for homes, as younger Americans age into the traditional ownership years. There was even a slight uptick in the number of owned household formed in the first part of this year, compared to rental households formed, according to the U.S. Census. Still, there would be far more sales if homes were more affordable.

“It’s no exaggeration to say that current buying conditions in many markets are terrible, with sellers in complete control and buyers forced to contend with cutthroat competition and intense pressure to make a deal,” said Svenja Gudell, chief economist at Zillow.



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Zillow Group’s Instant Offers Spark Outrage in the Real Estate World …

Zillow (NASDAQ:Z) (NASDAQ:ZG) is floating trial balloons in Las Vegas and Orlando that have sent the real estate community into a tizzy. The company rolled out its latest pilot program called “Instant Offers”, which allows homeowners to link up directly with investors through Zillow. The buyer makes an all-cash offer for the property, allowing the homeowner to sell without the hassle of putting the home on the market. As a result, realtors are up in arms that the homeowner can complete the transaction with or without their services.

By giving consumers that option, is Zillow about to disrupt the residential real estate industry and put over 70% of its ad revenue at risk? 

Zillow Instant Offers website.

Image source: Zillow.

Realtors’ love-hate relationship with Zillow

Realtors have been skeptical about Zillow’s motives from the first day it entered the business. There is concern that the internet is going to disrupt the traditional residential real estate business model and the lucrative commission structure that has attracted many agents to the profession.

On the other hand, realtors who have been advertising with Zillow are enjoying more leads, more sales, and increased commissions.

Contrary to popular opinion, the Instant Offers program encourages home sellers to use a realtor even if the homeowner chooses to forgo the traditional listing and sales process by accepting an offer. The real questions are: What will the realtor do to earn a commission, and how much will that commission be?

Upending the traditional sales process

All real estate commissions are fully negotiable. A typical listing fee is 6% of the selling price of the home, paid by the seller, which is split 3% to the selling office and 3% to the listing office. The listing agent is responsible for holding the open house, advertising the property, and in general, engaging with potential buyers and their agents as well as negotiating the contract and facilitating the escrow process.

In the case of Zillow Instant Offers, most of that work disappears. The seller is already accepting an offer, so there is no advertising to pay for or open house to hold. There is also no listing since the buyer has already been found, so even if a homeowner feels more comfortable using an agent, why would they pay a 3% listing fee?

The irony of it all: Realtors turn to the internet to fight … the internet

Realtors have taken to the internet to voice their displeasure with Zillow. Over 14,000 people, including realtors, attorneys, appraisers, and homeowners have signed an online petition asking for the National Association of Realtors to threaten Zillow with being removed from access to listings if Instant Offers is not discontinued. Without access to the various listing services, there wouldn’t be much left of Zillow Group’s websites.

However, the National Association of Realtors has already responded to the disgruntled agents, saying “[It] would be unlawful for NAR to discourage its members from using any product or service provider. Such decisions must be made by the broker or agent independently.” It went on to add in a blog post: “NAR cannot sponsor or encourage a boycott …”  

In response, Zillow itself has always contended that the company is not looking to get rid of realtors. The fact is that the internet is changing the way business is done in many industries, including real estate. In response to the latest uproar over Instant Offers, Zillow Chief Business Officer Greg Schwartz wrote, “Seventy percent of our revenue is from working with more than 80,000 agents, teams and brokers who advertise with Zillow Group. We believe in agents, and we always encourage consumers to work with them.”

How will this get resolved?

Look for a compromise of sorts. A reduced fee for representing clients who accept an offer through the new program may be the answer. Since the realtor will not have to list, advertise, or market the home, or even look for a buyer, it will take up far less of their time and far less effort to service the homeowner. In addition, they may be able to represent the seller if they decide to buy another property.

The bottom line is that technology marches on. If you have to place a wager on Zillow and the internet versus the traditional real estate business, go with the the former. Because in the end, if homeowners like the Instant Offers platform, it will be the realtors that have to adapt to the new environment.

Frederick County real estate professionals warn of increased money wiring scams

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Real Estate Matters: Midyear forecast

FORT MYERS, Fla. – The National Association of Realtors recently published their midyear forecast and they are predicting home sales to rise 3.5% nationally. This is good news for some, not so good for others, especially if you’re a first-time homebuyer.

Real estate expert Denny Grimes, from Denny Grimes and Company at Keller Williams Realty joined us in the studio to break it down for us.

1936-2017: Jim Stanton remembered as a ‘big personality’

Jim Stanton, a residential developer who stuck with the condo market in defiance of conventional wisdom and had a hand in creating thousands of local housing units over a decadeslong career, died Saturday at age 81.

At the time of his death, the principal of Coon Rapids-based Shamrock Development remained active in a real estate career that spanned more than 55 years, including 40-plus years as a developer. Stanton developed more than 6,000 home sites in 28 cities, according to Shamrock’s website.

A 2014 inductee in the University of St. Thomas’s Minnesota Real Estate Hall of Fame, Stanton was a visionary with a passion for building homes – and a persona as big as the projects he created, according to his industry peers.

“He was a big personality. You always knew exactly what was on his mind,” said Herb Tousley, director of real estate programs at the University of St. Thomas. “I enjoyed that.”

Stanton wasn’t afraid to buck the trends – and he had a sense of humor about his maverick ways. A March 2015 article in Finance Commerce noted that Shamrock was the only developer with major condo buildings on its drawing board.

“Maybe I’m the only guy dumb enough to build them,” Stanton joked at the time.

But while others shied away from building condominiums over liability concerns, Stanton stuck with that segment of the housing market because he believed in his product, Tousley said.

“I remember asking him … does it make you nervous as a developer that you have this liability concern out there?” Tousley said. “He basically said he was not too concerned about it because he felt like he was putting a good product out there. He said, ‘We don’t cut corners. We do it right and that has worked for us.’”

In recent years, developers have been hesitant to move forward with condo and townhome developments for fear of litigation, despite growing demand for such homes. State law allows a condo owner or association to sue project teams for “major construction defects” for up to 10 years after the unit or building was completed.

Stanton combined “a keen ability to envision the future markets — even in down economies — with a straightforward, ‘tell it like it is’ approach that brings projects to fruition,” according to the Minnesota Real Estate Hall of Fame website.

Tracey Douglas, chief operating officer of the St. Paul Area Association of Realtors, said Stanton could be “extremely feisty” at times and was “never afraid to go his own way.”

An active association member for 51 years, Stanton was generous with his time and money, she added.

“Jim was a very complex man,” Douglas said. “He was very smart, witty. He was kind, he was generous. He was very business-savvy. He could look at a real estate opportunity and know if it was going to be successful or not. He had a sixth sense for the real estate industry and he was extremely passionate about it.”

Stanton remained passionate until the end, said David Siegel, executive director of the Builders Association of the Twin Cities. Earlier this month, Stanton met with Siegel and other BATC officials to talk about public policy and industry advocacy issues, Siegel said.

“Even at that meeting, he was looking ahead,” Siegel said. “He was excited about advancing the housing movement. He was that kind of a guy. … He loved what he did so much. That is inspirational to see. I imagine the thought of retiring never occurred to him.”

The cause of Stanton’s death was not known.

Bill Gerst worked with Stanton for decades, beginning in the early 1980s. Now retired, Gerst held a number of positions with the Minneapolis Area Association of Realtors for 33 years.

“He was very much of a leader,” Gerst said. “He was out on the edge on some things. He was not afraid to take a chance. He was not afraid to push what may be an unpopular idea with the trade association on a specific issue. He was very good at speaking up and articulating his arguments.

“He was not a conservative, button-down suit kind of guy,” Gerst added. “He was kind of a rough-and-tumble guy at times. But if you and Jim got along and you were friends, he would help you with almost anything.”

Stanton was born March 8, 1936, in Greenvale Township, Minnesota, according to an online obituary. He graduated from Bethlehem Academy in Faribault and served in the National Guard in Colorado before launching his career in real estate and development.

His portfolio included nine condo and loft projects in downtown Minneapolis, such as the 112-unit, 17-story Portland Tower condos at 516 Eighth St. S., and the 282-unit Bridgewater Lofts, at 215 10th Ave. S.

The 374-unit Legacy Condos, under construction at 121 12th Ave. S. in the Mill District of Minneapolis, is among his 10 current commercial and residential projects in Minnesota and Wisconsin.

Besides MAAR, he was active with the Minnesota Association of Realtors, the National Association of Realtors, the North Metro Realtors Association, the St. Paul Area Association of Realtors, and the Builders Association of the Twin Cities.

Stanton is survived by sons Kevin Stanton and Dennis Stanton, and daughters Debra Woodward and Colleen LaBeau. He also leaves behind three brothers, five sisters, seven grandchildren and seven great-grandchildren.

Funeral services will be held at 11 a.m. Friday at the New Hope Church, 4225 Gettysburg Ave. N. in New Hope. Visitation is 4 to 8 p.m. Thursday at the church and one hour before the service.

 

Zillow Group’s Instant Offers Spark Outrage in the Real Estate World — Here’s What You Need to Know

Zillow (NASDAQ:Z) (NASDAQ:ZG) is floating trial balloons in Las Vegas and Orlando that have sent the real estate community into a tizzy. The company rolled out its latest pilot program called “Instant Offers”, which allows homeowners to link up directly with investors through Zillow. The buyer makes an all-cash offer for the property, allowing the homeowner to sell without the hassle of putting the home on the market. As a result, realtors are up in arms that the homeowner can complete the transaction with or without their services.

By giving consumers that option, is Zillow about to disrupt the residential real estate industry and put over 70% of its ad revenue at risk? 

Zillow Instant Offers website.

Image source: Zillow.

Realtors’ love-hate relationship with Zillow

Realtors have been skeptical about Zillow’s motives from the first day it entered the business. There is concern that the internet is going to disrupt the traditional residential real estate business model and the lucrative commission structure that has attracted many agents to the profession.

On the other hand, realtors who have been advertising with Zillow are enjoying more leads, more sales, and increased commissions.

Contrary to popular opinion, the Instant Offers program encourages home sellers to use a realtor even if the homeowner chooses to forgo the traditional listing and sales process by accepting an offer. The real questions are: What will the realtor do to earn a commission, and how much will that commission be?

Upending the traditional sales process

All real estate commissions are fully negotiable. A typical listing fee is 6% of the selling price of the home, paid by the seller, which is split 3% to the selling office and 3% to the listing office. The listing agent is responsible for holding the open house, advertising the property, and in general, engaging with potential buyers and their agents as well as negotiating the contract and facilitating the escrow process.

In the case of Zillow Instant Offers, most of that work disappears. The seller is already accepting an offer, so there is no advertising to pay for or open house to hold. There is also no listing since the buyer has already been found, so even if a homeowner feels more comfortable using an agent, why would they pay a 3% listing fee?

The irony of it all: Realtors turn to the internet to fight … the internet

Realtors have taken to the internet to voice their displeasure with Zillow. Over 14,000 people, including realtors, attorneys, appraisers, and homeowners have signed an online petition asking for the National Association of Realtors to threaten Zillow with being removed from access to listings if Instant Offers is not discontinued. Without access to the various listing services, there wouldn’t be much left of Zillow Group’s websites.

However, the National Association of Realtors has already responded to the disgruntled agents, saying “[It] would be unlawful for NAR to discourage its members from using any product or service provider. Such decisions must be made by the broker or agent independently.” It went on to add in a blog post: “NAR cannot sponsor or encourage a boycott …”  

In response, Zillow itself has always contended that the company is not looking to get rid of realtors. The fact is that the internet is changing the way business is done in many industries, including real estate. In response to the latest uproar over Instant Offers, Zillow Chief Business Officer Greg Schwartz wrote, “Seventy percent of our revenue is from working with more than 80,000 agents, teams and brokers who advertise with Zillow Group. We believe in agents, and we always encourage consumers to work with them.”

How will this get resolved?

Look for a compromise of sorts. A reduced fee for representing clients who accept an offer through the new program may be the answer. Since the realtor will not have to list, advertise, or market the home, or even look for a buyer, it will take up far less of their time and far less effort to service the homeowner. In addition, they may be able to represent the seller if they decide to buy another property.

The bottom line is that technology marches on. If you have to place a wager on Zillow and the internet versus the traditional real estate business, go with the the former. Because in the end, if homeowners like the Instant Offers platform, it will be the realtors that have to adapt to the new environment.