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Turning Houses into Homes®

State Associations Renew Effort to Block Eviction Ban p. 18

Table of Contents Features 10 Realtor® Day at the Parade 12 Tackling Buyer Remorse Graham Wood and Wendy Cole 18 State Associations Renew Effort to Block Eviction Ban

The National Association of Realtors® 20 If You Build It… Daniel Bortz 22 The New Housing Crisis: Are FirstTime Buyers Being Priced Out of Homeownership? Clare Trapasso

26 Real Estate Industry’s Most

Impactful Emerging Technologies

The National Association of Realtors®

Columns 7 What it Means to be a Director Matt Ulrich – President’s Message

Departments 8 Happenings 8 In the News 28 Housing Watch

On the Cover: Cover Photo: denisismagilov©/ Adobe Stock Photo left: Image licensed by Ingram Image

This Magazine is Self-Supporting Salt Lake Realtor® Magazine is self-supporting. The advertisers in this magazine pay for all production and distribution costs. Help support this magazine by advertising. For advertising rates, please contact Mills Publishing at 801.467.9419. The paper used in Salt Lake Realtor® Magazine comes from trees in managed timberlands. These trees are planted and grown specifically to make paper and do not come from parks or wilderness areas. In addition, a portion of this magazine is printed from recycled paper.

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The Salt Lake REALTOR® (ISSN 2153 2141) is published monthly by Mills Publishing, located at 772 E. 3300 South, Suite 200 Salt Lake City, Utah 84106. Periodicals Postage Paid at Salt Lake City, UT. POSTMASTER: Send address changes to: The Salt Lake REALTOR,® 772 E. 3300 South, Suite 200 Salt Lake City, Utah 84106-4618.

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Hannah Cutler Coldwell Banker Residential

President Matt Ulrich Ulrich Realtors®, Inc.

What it Means to be a Director

Laura Fidler Summit Sotheby’s

First Vice President Steve Perry Wise Choice Real Estate

Amy Gibbons KW South Valley Jennifer Gilchrist Utah Key Real Estate

Second Vice President Rob Ockey Century 21 Everest

Tony Ketterling Equity Real Estate

Treasurer Carlye Webb Summit Sotheby’s

Claire Larson Woodside Homes John Lucky Coldwell Banker Residential

Past President Alicia Holdaway Summit Sotheby’s

Sophie Reece Berkshire Hathaway

CEO Curtis Bullock

Janice Smith Coldwell Banker Residential

Directors

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Morelza Boratzuk Realtypath LLC

Advertising information may be obtained by calling (801) 467-9419 or by visiting www.millspub.com

Managing Editor Dave Anderton Publisher Mills Publishing, Inc. www.millspub.com President Dan Miller Art Director Jackie Medina Graphic Design Ken Magleby Patrick Witmer

Sales Staff Paula Bell Paul Nicholas

Office Administrator Cynthia Bell Snow

Salt Lake Board: (801) 542-8840 e-mail: dave@saltlakeboard.com Web Site: www.slrealtors.com The Salt Lake Board of REALTORS® is pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the nation. We encourage and support the affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin.

Nominations are now being accepted for one open position on the Board of Directors. The minimum eligibility requirements for a Realtor® to be elected and/or appointed to the Board of Directors includes: 1. Be a Realtor® for at least five (5) years; 2. Be a member in good standing of the Salt Lake Board for at least three (3) years, 3. Actively participate on a committee of the Salt Lake Board of Realtors®, Utah Association of Realtors®, National Association of Realtors® or UtahRealEstate.com for at least two (2) years. You can nominate yourself or someone you know online at: slrealtors.com/ director-nominations. The deadline to apply is Aug. 27. After submitting applications, candidates are interviewed by the Nominating Committee, which is comprised of a broad and diverse group of individuals who determine if the candidate is both eligible and qualified to run. If they are approved by the Nominating Committee, candidates may then campaign to earn votes from the general membership. Voting is done online at UtahRealEstate.com. The 16-member Board of Directors establishes policy for the association. Thirteen of the Board’s 16 directors are elected by the general membership. Three directors are appointed by the Board’s three largest brokerage firms. Each year there is at least one open position to be filled on the Board of Directors. Our local real estate association, along with the Utah Association of Realtors® and the National Association of Realtors®, plays a crucial role in working with local elected officials to ensure the real estate profession is not riddled by regulations that drive up housing costs and make the practice of real estate burdensome. In addition, directors participate in media opportunities, act as liaisons to committees, attend monthly meetings, and receive annual training. If you want to make a difference and offer your service and experience to the betterment of the profession, apply today!

Matt Ulrich President

The Salt Lake REALTOR® is the monthly magazine of the Salt Lake Board of REALTORS®. Opinions expressed by writers and persons quoted in articles are their own and do not necessarily reflect positions of the Salt Lake Board of REALTORS®. Permission will be granted in most cases, upon written request, to reprint or reproduce articles and photographs in this issue, provided proper credit is given to The Salt Lake REALTOR®, as well as to any writers and photographers whose names appear with the articles and photographs. While unsolicited original manuscripts and photographs related to the real estate profession are welcome, no payment is made for their use in the publication. Views and opinions expressed in the editorial and advertising content of the The Salt Lake REALTOR® are not necessarily endorsed by the Salt Lake Board of REALTORS®. However, advertisers do make publication of this magazine possible, so consideration of products and services listed is greatly appreciated.

OFFICIAL PUBLICATION OF THE SALT LAKE BOARD OF REALTORS ® REALTOR® is a registered mark which identifies a professional in real estate who subscribes to a strict Code of Ethics as a member of the NATIONAL ASSOCIATION OF REALTORS®. October 2005

August 2021 | Salt Lake Realtor ® | 7

Happenings

In the News

Top 10 Wasatch Front Cities in SingleFamily Sales Where are home buyers purchasing homes? More buyers are looking outside of Salt Lake County, which posted the highest median home price of the five-county Wasatch Front area in this year’s second quarter. Herriman was the only city in Salt Lake County to make the Wasatch Front Top 10 list in highest singlefamily home sales. Eagle Mountain took the top spot with 294 sales.

More Utahns and Californians Search UtahRealEstate.com

Utahns and Californians were the top visitors to the multiple listing service UtahRealEstate.com from June 2020 to June 2021. Rounding out the top five states were Colorado, Virginia, and Idaho. Demand for homes in Utah is fierce. The median price of a single-family home in Salt Lake County climbed to $551,000 in June, up 31% from a year ago. UtahRealEstate.com is where real estate listings originate, and it is the official property information platform for real estate professionals in the state of Utah. The Salt Lake Board of Realtors® is the largest shareholder of UtahRealEstate.com.

8 | Salt Lake Realtor ® | August 2021

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NAR Donates $1.25 Million to Relief Foundation In 2001, immediately after the Realtors® Relief Foundation was founded, the National Association of Realtors® made a $1 million donation to kick off a fundraising drive which ultimately generated $8.5 million for the families of the victims of the September 11, 2001, terrorist attacks. Today, the association is reaffirming its commitment from two decades ago by working with its subsidiary organizations to make an unprecedented $1,250,000 collective donation to the Foundation’s 20th Anniversary Campaign, Hope Rising. Amid the ongoing Atlantic hurricane season and persistent wildfires in the American West, the Realtors® Relief Foundation expects to be called on for assistance often in the coming months. The Foundation’s 20th Anniversary Campaign is designed to ensure it can respond quickly and effectively whenever these situations inevitably arise in the future. “The Realtors® Relief Foundation is truly something everyone in the Realtor® community can point to and be proud of,” said NAR CEO Bob Goldberg. “Our members work every day to help their clients find a home, but in some of the darkest times Realtors® are also there to help families stay in their homes, through all of the incredible work done by the RRF. With the support of Second Century Ventures, SentriLock LLC, Realtors® Information Network, Center for Realtor® Development, and Realtors Property Resource®, it is my honor to carry this legacy forward to help Realtors® bring hope home when it is needed most.” The collective donation announced today is the largest such commitment in the Foundation’s history and has allowed the 20th Anniversary Campaign to raise more than $5.8 million of its $8.5 million goal.

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Realtor® Day at the Parade Hundreds of members of the Salt Lake Board of Realtors® gathered at the Realtor® Campus in Sandy for the annual Realtor® Day at the Parade of Homes, sponsored by the Salt Lake Home Builders Association. Members purchased discounted Parade tickets, enjoyed lunch, and were able to tour Parade homes. More than $52,000 was raised through the sale of discounted Parade tickets. This year is the 75th anniversary of the Salt Lake Parade of Homes. The Salt Lake Board of Realtors® is a major sponsor of the Salt Lake Parade of Homes.

Photos: Dave Anderton

10 | Salt Lake Realtor ® | August 2021

August 2021 | Salt Lake Realtor ® | 11

Tackling Buyer Remorse Some pandemic purchases have led to misgivings. Here’s how to help. By Graham Wood and Wendy Cole

Krakenimages.com©/ Adobe Stock

Jacinda Bauman’s second thoughts about the 5,000-square-foot home she and her husband, Joe, closed on in March didn’t hit her immediately. After all, their “pandemic purchase”—just seven blocks from their longtime home in Oak Park, Ill.—checked all the boxes for the family of four, including their 13-year-old daughter and 8-yearold son. Joe, a computer programmer for a hedge fund, would no longer be relegated to the corner

12 | Salt Lake Realtor ® | August 2021

of a half-finished basement during his 70-hour workweeks. At their old 1,350-square-foot house, space for Zoom schooling was limited, and the kids’ toys took over the house during the long months when everyone was always home. All four of them shared a bathroom. At the new house, a 1920s brick half-Tudor, there are four full bathrooms.

But a few weeks after their April 1 move-in date, Bauman’s husband returned to his office in downtown Chicago, and the kids’ schools had fully reopened. “I looked around at all this space and thought, ‘What did we do?’ We don’t really live in any more rooms than we used to in the old house,” Bauman said. Recent home buyers, whose lifestyles changed overnight in the pandemic, may have rushed to purchase a property to accommodate a new housing or location preference. Add to that the pressures of an intensely hot seller’s market— which is forcing many to waive contingencies and push their budget to the maximum to have a shot at winning a bidding war—and even the most well-qualified clients can feel pangs of regret after a closing. Now that life in the U.S. is opening up again, some of those buyers could be having doubts. Bauman said her agent, Patty Melgar Hooks of Coldwell Banker Real Estate, has been vital in helping her sort through the moments when she questioned her family’s decision to upsize. “It’s important to really hear the fear and anxieties that clients are telling you and meet them at their need level,” Hooks said. Her 11 years as an emergency

room nurse before she got into real estate have served her especially well in these times, she added. “The hospital was also an environment where people didn’t know what to expect.” The counsel that Melgar Hooks offered Bauman before, during, and after the purchase was, indeed, therapeutic. Bauman and her husband bought the new house for $663,000 in January, shortly before inventory became even scarcer and prices more expensive. Hooks helped Bauman see that waiting until May to list their old house would be advantageous to them as sellers. Gaining a better understanding of the propitious timing for both transactions made Bauman feel better about the two mortgages they carried while getting their old home ready to list, the significant expenses for new furnishings, and the cost of the move itself.

Millennial Regrets The likelihood of regret is highest among younger buyers. A Bankrate survey in April found that nearly two-thirds of millennial homeowners had misgivings about their recent purchase. At least for now, clients who feel they overpaid for a home or who were ill-prepared

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next bid rather than keep haggling. Employing these strategies can help clients stay calm and confident in a fast-moving market. • Don’t speak about the market in vague terms. It’s important not to use oversimplified language like “Yeah, it’s a hot market,” when educating buyers about the current dynamics, Gurske said. Discuss the supply-demand imbalance as specifically as you can, noting what kind of offers are most likely to be competitive.

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for the ongoing maintenance costs don’t need to feel trapped. Prices are expected to keep rising in the near term, said National Association of REALTORS® Chief Economist Lawrence Yun in May. If buyers choose to turn around and sell quickly, they may even see a profit. But even more important is helping clients avoid regret, which starts well before they put a single offer on the table. Katie Falk, a team leader with Keller Williams Realty in Whitefish Bay, Wis., said her buyer consultations become “quasipsychological evaluations” of her clients’ market readiness. She learns about their tolerance for bidding wars and ability to scale up their budget. “Those who can’t tolerate that kind of risk are more prone to buyer’s remorse. My advice to them might be to sit the market out a while longer,” Falk said. In an environment where “the list price is just the starting point for negotiations,” it’s important to have the “kindness” to help clients understand which homes are and aren’t in their reach, said Cassie Kurowicki, a sales associate with EXIT Realty 1st in Chelsea, Mich. One tactic agents are using to win bidding wars is to submit an offer with an escalation clause, which automatically raises the offer against higher bids, usually in increments of at least $1,000. The buyer establishes the cap. You’ll want to check your state and local laws, as some prohibit escalation clauses. Also, consult an attorney about best practices to ensure you’re representing your client’s interests properly. But the realities of a seller’s market can rattle buyers even after an offer is accepted. When buyers feel disadvantaged, “a part of them feels like they’ve got to win back some of what they gave up,” said Adam Gurske, CRS, GRI, a sales associate with Matchmaker Realty in Gainesville, Fla. Many sellers will choose to move on to the

14 | Salt Lake Realtor ® | August 2021

• Be extra prepared to handle objections. Buyers may be spooked by unexpected items like a hefty home inspection report, Gurske said. “They start tallying up all the things that are wrong, and they feel like it doesn’t justify the price.” When this happens, he tries to refocus his clients on the terms of their sales contract, informing them that in a seller’s market, “you’re not going to find others who’ll be more willing to negotiate with you.” • Discuss renovation costs up front. Many buyers target fixer-uppers because they’re less expensive. But home improvements costs are soaring, and those will take a chunk out of your client’s budget, said Devin Ratoosh, sfr, a sales associate with Red Oak Realty in Berkeley, Calif. Because buyers are paying 20% to 40% above list price in his market, “an unexpectedly expensive project on top of that can be a problem,” Ratoosh said. • Help clients find other ways to save. Ratoosh saved one buyer $10,000 by suggesting that he reframe his back porch rather than entirely rebuild it. The reframe took care of the pest damage that needed to be fixed. “Little things to help them save can make them more confident in their purchase,” he said. In the end, if your clients’ doubts about their purchase are not centered on finances, they may just need time to adjust to the new home and envision its possibilities for the future. Melgar Hooks helped Bauman see the long-term benefits of buying a larger home. “We’ll have a lot of options here,” Bauman said. “I’ll get to have my art studio, and there’s room to have parties. Looking ahead, we’ll have space for the kids to come back if they need to. We’ll be ready if there’s another pandemic.” Graham Wood is Executive Editor of Digital Media for REALTOR® Magazine. He can be reached at gwood@nar.realtor. Wendy Cole is the former managing editor of REALTOR® Magazine. Reprinted from Realtor® Magazine Online, July-August 2021, with permission of the National Association of Realtors®, Copyright 2021. All rights reserved.

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State Associations Renew Effort to Block Eviction Ban About half of all housing providers are mom-and-pop operators, and without rental income, they cannot pay their own bills or maintain their properties. By The National Association of Realtors® Realtors® are stepping in to stop another extension of the Centers for Disease Control and Prevention’s eviction moratorium, which exposes housing providers to further income loss. The Alabama and Georgia state REALTOR® associations—along with two housing providers and their property management companies— filed an emergency motion Wednesday night in federal court to block enforcement of the extension, which the CDC announced late Tuesday. Though the CDC’s order through Oct. 3 appears to be narrower in scope, affecting only those areas with high COVID-19 transmission, it still covers about 90% of renters in the country and could increase to 100% with higher rates of infection. The Alabama and Georgia associations have been involved in an ongoing legal battle since

18 | Salt Lake Realtor ® | August 2021

last November to strike down the eviction ban and support the rights of property owners. The Supreme Court weighed in on the case this summer, saying the CDC couldn’t extend the moratorium beyond July 31 without Congressional approval of new legislation. Congress tried and failed to pass an extension bill last week, which NAR opposed. The two Realtor® associations are now asking a U.S. District Court judge to uphold the Supreme Court’s interpretation. The Department of Justice argues in court filings that this is a new eviction moratorium, not an extension of an existing one, and is necessary to continue helping struggling renters as spread of the Delta variant explodes in the U.S. But housing providers say the moratorium, which the CDC first put in place last September, has cost

them more than $13 billion per month in unpaid rent and continue to urge for swift deployment of federal rental assistance as the solution.

The Legal Challenge When the Alabama and Georgia associations launched their case last fall with the National Association of Realtors®’ support, Judge Dabney Friedrich of the U.S. District Court for the District of Columbia sided with housing providers. But her decision was stayed, and the moratorium was kept in place while the DOJ appealed. The moratorium lapsed July 31 but was resurrected by the Biden administration. President Joe Biden acknowledged Tuesday that the CDC’s latest extension likely faces tough odds in court but is “worth the effort.” Realtors® want the court to intervene again. “A majority of the Supreme Court made clear that the eviction moratorium exceeds the CDC’s statutory authority and could not be extended beyond July 31,” the plaintiffs said in court documents filed Wednesday. “The Supreme Court’s ruling was hardly ambiguous. Indeed, the White House clearly acknowledged that the

Supreme Court had ruled that the CDC lacked authority to extend the moratorium.”

Allocating Rental Assistance While lawsuits continue, NAR is focusing on swifter disbursement of rental assistance funds, which are now available in every state. The Consumer Financial Protection Bureau debuted a new tool to apply for rental assistance last week. But only about 6.5% of the nearly $50 billion in funding—which NAR was instrumental in securing—has been distributed, according to government data. “About half of all housing providers are momand-pop operators, and without rental income, they cannot pay their own bills or maintain their properties,” NAR President Charlie Oppler said in a statement. “NAR has always advocated that the best solution for all parties is rental assistance paid directly to housing providers to cover the rent and utilities of any vulnerable tenants during the pandemic. No housing provider wants to evict a tenant and considers it only as a last resort.”

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If You Build It…

The shortage of housing inventory for sale is persuading some agents and brokers to get into real estate development. By Daniel Bortz In a normal year, Grant Johnson, a real estate agent at RE/MAX Results in Minneapolis–St. Paul, Minn., divides his time equally between selling existing homes and developing land for new- home construction. But the pandemic has flipped Johnson’s business on its head. “Listings have been very difficult to come by,” said Johnson. As a result, he decided to scale up his land development work. “Typically, the builder that I work with and I put together 20 to 30 lots a year,” he said. “This year we’re going to be developing 70 lots.” In addition to procuring the land, Johnson will represent the builder as a listing agent. “Creating our own inventory has helped us survive the pandemic,” he said.

20 | Salt Lake Realtor ® | August 2021

Diversifying business streams amid a period of record-low inventory has been a productive move for Johnson and many real estate agents and brokers this year. National Association of Realtors® Chief Economist Lawrence Yun said, “2021 is likely to have the most acute shortage of homes for sale in history.” The numbers make the urgency clear. Unsold inventory remains scant, hovering at a twomonth supply during the first half of the year. In April, days-on-market was the shortest ever recorded at 17 days, down from 29 in March 2020. The typical listing received more than five offers, April’s Realtors® Confidence Index survey found.

recently began building new homes. “Right before the pandemic I partnered with a local contractor, and we purchased seven lots,” Thompson said. So far she has built and sold eight single-family homes on the land, and she’s planning to start developing multifamily housing. “That’s the next stage of growing the business,” said Thompson, who also flips houses. It’s not only individual agents who are recognizing the value of branching out. Luxury real estate brokerage Harry Norman, Realtors®, in Atlanta launched a new developer services division in April, which provides marketing, sales, leasing, and advisory services to residential builders and developers. “We help developers locate land and assess whether a piece of land would be a good place to build homes,” explains division head Leslie Johnson (no relation to Grant Johnson). “We also help them decide what kind of homes to build, what price point to set, and how to market the homes, and then we serve as the listing agent.” Leslie Johnson said the development operation rolled out at precisely the right time. “It’s hard to believe just how bad the lack of inventory is right now,” he said. Four to six months of (continued on page 30)

In June, NAR published a study titled “Housing Is Critical Infrastructure,” showing that the U.S. has underbuilt its housing needs by at least 5.5 million units over the past 20 years. To fill that gap, the report said, the country needs to build at least 2 million units per year for the next decade, a 60 percent higher production pace than in 2020. Dan Lesniak has witnessed the dearth of home supply in Washington, D.C. Lesniak, founder of the Orange Line Living Team, said homes in his market are getting snatched up in the blink of an eye. “Some of our buyer clients are getting frustrated, because they’re striking out on home after home,” he said. To cope with the shortage of existing homes, Lesniak and his business partner Sunil Saxena, a general contractor, have doubled down on their condominium construction projects during the pandemic. “It’s given us another revenue stream, and it’s given our home buyers access to more properties,” Lesniak said. Brandi Pearl Thompson, a real estate agent at Keller Williams Realty in Chattanooga, Tenn.,

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The New Housing Crisis: Are First-Time Buyers Being Priced Out of Homeownership? The percentage of first-time buyers in the market slipped to just 31% in May and June, the lowest level seen in more than 30 years. By Clare Trapasso Anyone who’s seen desperate buyers sizing up one another in the lines for open houses that sometimes stretch for blocks—or, worse, anxiously stood in one of those queues themselves—knows that today’s housing market has become brutally competitive. Prices for homes for sale have risen to previously unthinkable heights due to a severe housing shortage. Even with the market beginning to settle down, bidding wars are still the norm for the most desirable homes.

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The nation is in the throes of an unprecedented housing crisis unlike what we experienced during the housing bust of the 2000s. And firsttime homebuyers are one of the prime casualties. These traditionally younger, lower-paid buyers are now facing record-high rents while being tasked with coming up with the hefty down payments demanded by todays sellers—at least 20% in many markets for offers to even be considered. They’ve been pitted against deep-

lowest mortgage rates on record as well as some of the other perks of homeownership, such as more space for a home office. In the longer term, paying rent instead of mortgage installments each month could hinder their ability to build the kind of wealth that can provide a cushion against unexpected expenses and be passed on to future generations. But many first-time buyers are simply being priced out. The dearth of homes for sale has pushed median home list prices up 13% annually, to hit a record-high of $385,000 in June, according to the most recent Realtor.com® data. These prices don’t factor in bidding wars and offers over asking, which can push prices much higher in many of the hotter real estate markets. Rental prices also hit record heights, jumping a median 8.1% year over year in June, to $1,575 a month, according to the most recent Realtor. com data. That translates into the average renter paying an additional $118 a month. This boost, along with inflation, makes it even more difficult for buyers to save up for a big down payment. It’s a classic squeeze play. The percentage of first-time buyers in the market slipped to just 31% in May and June, the lowest level seen in more than 30 years, according to the most recent NAR research. In June of last year, this group made up 35% of those purchasing homes.

pocketed investors—sometimes offering all-cash deals—along with home sellers using the equity they’ve built to purchase their next homes. And not even rock-bottom mortgage interest rates can make up for modest starter homes selling for what seems like luxury prices. That’s left many would-be first-timers, particularly in more expensive parts of the country, to question whether the dream of homeownership is still realistic—or if the housing market is simply stacked against them. “The American dream [of homeownership] is not dead,” said Jessica Lautz, vice president of research at the National Association of Realtors®. But “it’s hard for first-time homebuyers in the market right now to compete.” Certainly the stakes are high. First-time buyers aren’t just losing out on the

More homes need to go up for sale to help first-time buyers Real estate experts are optimistic that, as more homes go up for sale, first-time buyers will have stronger odds of getting a property of their own. The theory is that, as inventory levels rise again, there will be less bare-knuckle competition—so prices can finally slow down. Recently, more homes have been flowing onto the market, although it’s more of a trickle than a torrent. The number of new listings on Realtor. com increased 9% in the week ending July 24 compared with the previous year. While the total number of listings is still down 31%, the bump was a positive development for buyers. “We may see first-time buyers have better footing,” said Lautz. One of the forces holding aspiring homeowners back is the lack of new home construction.

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“For this housing cycle, many first-time buyers probably missed the boat,” said Ali Wolf, chief economist of building consultancy Zonda. But “housing is a cyclical business. So while it feels like prices will only go up forever, the market will change. It always does.” Typically, new residences appeal to move-up buyers looking for larger, nicer homes that cost more. When they purchase a newly built home, this frees up their smaller, cheaper starter homes for first-time buyers. But with the housing shortage so severe, builders would need to significantly ramp up production to provide measurable relief. Builders began construction on just under a million single-family homes last year, said Robert Dietz, chief economist of the National Association of Home Builders. While that’s the most the nation has seen since 2007, it’s still far short of how many homes would need to go up to alleviate the shortfalls. The situation isn’t expected to improve much in the near term. Builders are contending with a shortage of available land to build on; a labor, materials, and appliances shortage; and sky-high prices for lumber and other necessary ingredients for a home. They also have long memories of the housing bubble. “The last boom and bust, even though it was 15 years ago, put a lot of companies that did a lot of speculative building out of business,” said Realtor.com Chief Economist Danielle Hale. “Now builders are behaving in a more cautious way.”

First-time buyers are competing with big investors First-time buyers are now going head-to-head with Wall Street investment firms in many cases. These big investors are often targeting the same starter homes in the suburbs popular with aspiring homeowners, to turn them into rentals. And in many cases, they’re able to offer all cash for these residences, something most first-time buyers aren’t able to do. “They’re tough to compete with,” Hale said. “They buy listings before they even hit the market. They’re buying in bulk, so they may be able to get deals that first-time buyers can’t get.” But fears that big institutional investors are shutting first-time buyers out of the market may be overblown, said Kelly Mangold, who specializes in real estate economics at RCLCO,

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a consulting firm. While sales of these homes appear to be growing, Mangold points out that only about 2% of single-family rental homes sold in a year are to institutional investors. “It’s [a trend] making headlines and it’s increasing, but it’s not a huge part of the market today,” said Mangold. “It’s concentrated in certain types of markets, like the Sun Belt.”

How first-time buyers can still find success Wolf, the economist with Zonda, recommends first-time buyers temper their expectations and be realistic about what they can afford. If they’re set on homeownership, their first real estate purchase may need to be a lower-priced condo versus a single-family home. Or they may need to make trade-offs, such as purchasing a fixer-upper or a property without all of the latest amenities or reconsider their preferred location. “First-time buyers are always going to make some compromises,” said Lautz. “Buyers are moving to overlooked areas in farther-out suburbs. That does provide the opportunity to compete in this market.” Plenty of real estate experts caution against writing off the opportunities for first-time buyers in today’s market. “They’ve been telling that story forever, and it’s not true,” said Bill McBride, who created the Calculated Risk blog and predicted the last housing bubble. He believes eventually price growth will slow down, so homes aren’t seeing double-digit hikes each month and incomes have a chance to catch up with the market. “Prices can’t get so far up that nobody can afford a house,” he said. “That makes no sense.” He also points out that the incomes of younger buyers often grow over time as they become more established in their careers. That means their budgets and savings are likely to expand in the future, putting them in a better position to become homeowners. “To the first-time buyers who feel like they’re never going to be able to own a home, be patient,” said Wolf. “Keep saving, keep a passive eye on the market, and watch listings. Be in a place where you’re ready to act fast if [the market hits] a soft patch.” Clare Trapasso is the deputy news editor of Realtor.com. She previously wrote for a Financial Times publication, the New York Daily News, and the Associated Press. She also taught journalism courses at several New York City colleges and obtained a real estate license. Contact her at clare.trapasso@realtor.com.

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Real Estate Industry’s Most Impactful Emerging Technologies The most valuable tools used in the past 12 months were eSignature, local MLS apps/technology, social media, lockboxes, and video conferencing. By The National Association of Realtors® Realtors® view drones and cyber security as the most impactful emerging technologies to their business, according to a new report from the National Association of Realtors®. NAR’s 2021 Technology Survey examined NAR members’ current tech usage and attitudes about the future of real estate technology. In addition to drones (37%) and cyber security (34%), Realtors® believe that 5G (31%) and virtual reality (30%) will also have a significant impact on their business in the next 24 months.

including our Strategic Business, Innovation and Technology group, has ensured that Realtors® will continue to have access to the latest technology and remain at the forefront of the innovations driving the market forward.”

“The pandemic has confirmed to all of us in the industry that technology will continue to transform real estate,” said NAR CEO Bob Goldberg. “The great work being done by NAR,

Many brokerages are providing these technologies to their agents. Thirty-seven percent of respondents agreed that their brokerage

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The survey also examined the current use of technology by Realtors®, finding that the most valuable tools used in the past 12 months were eSignature (78%), local MLS apps/technology (54%), social media (53%), lockboxes (48%) and video conferencing (39%).

provides them with all the technology tools they need to be successful, and 27% strongly agreed. The top tools provided by brokerages were eSignature (57%), personal websites (54%), customer relationship management (54%) and transaction management (50%). Roughly one out of three Realtors® – 36% – said that their broker does not charge any technology fees, and 50% said that the price their broker charged was reasonable. NAR’s report found that Realtors® are willing to pay for this technology, even if their brokerages do not. Thirty-six percent of Realtors® spend on average between $50-$250 per month on technology to use in their business. Eighteen percent spend between $251-$500, and nearly one out of four Realtors® – 23% – spend more than $500 monthly on technology. When asked about desired technology tools that are not currently provided by their broker, cyber security topped the list at 19%, followed by lead generation (16%), eNotary (11%), CRM (10%) and personal websites (10%). According to the survey, Realtors® are using social media now more than ever in their businesses. The top social network is Facebook, used by 90% of Realtors®, followed by Instagram (52%), LinkedIn (48%), YouTube (24%) and Twitter (19%). Video has also played an everincreasing role in the marketing of properties on social media. Thirty-seven percent use video in their marketing and 35% do not use video but hope to soon.

“There is no denying that social media has become an integral tool to promote a listing,” Goldberg said. “The pandemic has caused more of our members to use social media and video to creatively market themselves and their properties.” The top reasons Realtors® cited for using social media in their business included that they are expected to have a presence on social media (54%), it helps build and maintain relations with existing clients (49%) and they use it to promote listings (49%). Additionally, 36% of Realtors® use social media to find new prospects and 33% say it helps them network with other real estate pros. Social media also topped the list when it comes to lead generation. The top three tech tools that have given respondents or their agents the highest number of quality leads in the last 12 months were social media (52%), CRM (31%) and their MLS site (28%). These current and future real estate tech topics will be front and center at NAR’s iOi Summit, taking place August 17-18 in Dallas, Texas. Over 500 real estate practitioners, technologists and investors will convene to share insights and unveil cutting-edge real estate products and ideas. “iOi is all about innovation,” Goldberg said. “This event brings together proptech leaders and thinkers whose products, services and solutions will help shape the real estate industry and drive it forward.”

August 2021 | Salt Lake Realtor ® | 27

JUNE HOUSING WATCH As Higher Home Prices Slow Single-Family Home Sales, Condo Sales Skyrocket

“There were 1,455 sales of multifamily homes in Salt Lake County, up 28% compared to 1,140 sales a year earlier.

Higher home prices and a shortage of inventory slowed single-family home sales in the second quarter, while sales of multifamily homes (condominiums, townhouses, and twin homes) climbed sharply. In the second quarter, there were 3,396 single-family homes sold in Salt Lake County, nearly the same number of homes sold in the second quarter of 2020, when Covid-19 stifled sales. However, when compared to the second quarter of 2019, a year unaffected by the pandemic, single-family home sales in this year’s second quarter were down 10%. There were 1,455 sales of multifamily homes in Salt Lake County, up 28% compared to 1,140 sales a year earlier.

In June, overall sales (all housing types) in Salt Lake County, fell to 1,764, down nearly 8% from June 2020. However, sales in the first six months in the county were up 5% compared to the same period in 2020. The median price of a single-family home in the second quarter in Salt Lake County increased to $530,000, up 29% year over year. The median price of a multifamily unit climbed to $368,000, up 27% compared to the second quarter of 2020. “Higher home prices are driving more buyers to condominiums and townhouses,” said Matt Ulrich, president of the Salt Lake Board of Realtors®. “The typical multifamily home was roughly $160,000 less in price than a single-family home in the second quarter.” Where are home buyers purchasing homes? More buyers are looking outside of Salt Lake County, which posted the highest median home price of the five-county Wasatch Front area. The top 10 cities in single-family home sales in the second quarter were: 1. Eagle Mountain 2. Tooele 3. Lehi 4. Clearfield 5. Saratoga Springs 6. Farr West 7. Herriman 8. Roy 9. American Fork 10. Marriott-Slaterville New listings in Salt Lake County in the second quarter fell to 5,610 units, down 7% compared to the same period in 2020.

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August 2021 | Salt Lake Realtor ® | 29

Great Recession of 2008, for example, many real estate pros pivoted to develop expertise in short sales and foreclosures. For many Black brokers and agents, having multiple revenue streams, including from development projects, has long been key to success in real estate. Some say it’s because of subtle but entrenched biases against their businesses and neighborhoods, whether from lending policies, clients, or other practitioners. “On a good day, a Black broker who is largely servicing the Black community is going to have a drastically lower income from sales simply because the homes that they sell are priced lower compared to other areas based on the color of the residents,” said Matt Difanis, a White real estate broker at RE/MAX Realty Associates in Central Illinois, who leads talks on housing discrimination.

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Real Estate Development (continued from page 21)

home supply is generally considered a balanced market. “We have about one month’s supply of homes for sale here [in Atlanta], which is unheard of,” he said. Marianne Bornhoft, a real estate agent at Windermere Manito in Spokane, Wash., and her husband Chris Bornhoft, a developer, have also had good timing. “We recognized that the housing shortage was bad for new multifamily housing in Spokane a couple years ago, so we decided it was a good time to invest in building and managing an apartment building,” Marianne said. They purchased a vacant lot and built a 12-unit rental building; the apartments rent for between $1,500 and $1,650 per month. “People who are renting from us are people who sold their homes but can’t find a place to buy,” Marianne said. “They’re displaced sellers, which is not uncommon in today’s market.” But as first-time multifamily developers, the Bornhofts have experienced growing pains. “We initially expected the project to take about a year,” said Marianne, “but it took over 600 days to complete.” The delay, in part, came because they were forced to hire a second contractor, after the first one dropped out midway through construction. “We’ve had some challenges, but we got through them,” Marianne said. “It’s been a real labor of love.” Of course, the ability to adapt business activities in the face of market realities is important for anyone to prosper in real estate. During the

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Still, Difanis points to a silver lining. “This discrimination has led to the remarkable adaptability of Black real estate agents and brokers,” he said. Bonita Harrison, broker-owner of KBM Realty, a real estate investment firm in Chicago, has offered a diverse range of services since she opened her company in 2006. A longtime rehabber, she said the pandemic accelerated the demand for development projects. “With interest rates dropping as low as they did, we’ve received exponential interest from buyers for our properties,” said Harrison, who flips singlefamily and multifamily homes on Chicago’s South Side. In Harrison’s world, discrimination isn’t a thing of the past. “Because I’m a Black female developer, I’ve received racist and sexist comments from other industry professionals. I had one HVAC inspector work on a property I was rehabbing, and he was very demeaning toward me. He didn’t believe I was the developer of the property. I’ve also had buyers question whether the quality for my work is the same as that of my White counterparts.” Despite such challenges, Harrison said her business is flourishing. “In this low-inventory market, we’re getting multiple contracts on homes even before I’m finished remodeling them.” As Yun, NAR’s chief economist, sees the situation: “Because of the housing shortage, any inventory that can come to the market, whether it be newly built homes or refurbishing uninhabitable homes, is a potential money maker.” Daniel Bortz is a freelance writer who specializes in writing about personal finance but also covers real estate, home improvement, travel, careers, small business, and even weddings.

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