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David Weekley Homeowners Kimber & Robert Ballam and a David Weekley Homes Builder

And the way you sell. When it comes to selling homes, your name matters. That’s why we stake our reputation on helping you enhance yours. Selling a new David Weekley home to your Clients means more than simply giving a family a place to live. It means providing a rewarding home building journey and creating an inspiring space where their dreams can come true. That’s how reputations are built – one exceptional experience at a time – and it’s why we make our Team a seamless extension of yours. That’s The Weekley Way.

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Turning Houses into Homes®

Table of Contents Features 10 June is Homeownership Month The National Association of Realtors®

fizkes ©/Adobe Stock

12 2021 State of Hispanic Homeownership Report The National Association of Realtors®

2021 State of Hispanic Homeownership Report

18 U.S. States with the Fastest-Growing Economies David Heacock, Filterbuy 20 7 Real Estate Ideas That Deserve to Die Meg White 22 Rising Rates Are Battering Mortgage Lenders Orla McCaffery, The Wall Street Journal 26 6 Ways to Promote Homeownership Catherine Mesick

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7 Real Estate Ideas That Deserve to Die

The Best Realtors® Take the Most Continuing Education Classes Steve Perry – President’s Message

Departments 8

Happenings

In the News

28 Housing Watch

On the Cover: Cover Photo: John ©/Adobe Stock

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This Magazine is Self-Supporting

Rising Rates Are Battering Mortgage Lenders

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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President Steve Perry Presidio Real Estate

Morelza Boratzuk RealtyPath Hannah Cutler Coldwell Banker

First Vice President Rob Ockey Century 21 Everest

Laura Fidler Summit Sotheby’s

Second Vice President Dawn Stevens Presidio Real Estate

Amy Gibbons Keller Williams Jennifer Gilchrist Utah Key Real Estate

Treasurer Claire Larson Woodside Homes

Tony Ketterling Equity Real Estate

Past President Matt Ulrich Ulrich Realtors®

John Lucky Berkshire Hathaway Jodie Osofsky Signature Real Estate Utah

CEO Curtis Bullock

Janice Smith Coldwell Banker

Directors

Carlye Webb Summit Sotheby’s

Jenni Barber Berkshire Hathaway

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

Managing Editor Dave Anderton

President Dan Miller Art Director Jackie Medina

In fact, the best real estate agents typically earn the most CE credits every year. Some of our members take up to 80 CE credits annually. The Salt Lake Board of Realtors® offers 40 live classes that cover a range of topics, from forms and legal issues to social media best practices and the psychology of sales. All live classes offered by the Salt Lake Board of Realtors® are free of charge to members. Popular live classes include the Mandatory Residential Course (required for every license renewal), Code of Ethics (required by the NAR every three years), Legal Court Decisions Every Utah Realtor® Should Know, 10 Things I Learned from Manning the Legal Hotline, Advanced Real Estate Forms, and The Awesome Responsibility of Being a Broker.

Designations are specialized credentials for Realtors®. Designations offer extensive benefits that are continually improved upon and expanded. For this reason, maintaining a designation requires annual dues and continued membership in NAR. According to one survey, Realtors® with a designation earn almost twice as much annually than those without a designation.

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. 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®. ®

Under Utah law, real estate agents are required to complete 18 hours of continuing education courses every two years to keep their licenses active. However, if Realtors® are looking to grow their business and better serve their clients, 18 hours of CE courses is not enough.

The National Association of Realtors® and its affiliated Institutes, Societies, and Councils provide a wide range of programs and services that help members increase their skills, proficiency, and knowledge. Designations and certifications acknowledging experience and expertise in various real estate sectors are awarded by NAR and each affiliated group upon completion of required courses.

Publisher Mills Publishing, Inc. www.millspub.com

Graphic Design Ken Magleby Patrick Witmer

The Best Realtors® Take the Most Continuing Education Classes

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 ®

Designations offer specialized training in areas such as buyer representative, land consulting, commercial investment, international real estate, property management, appraisals, green features, legal and regulatory standards, seller representative, industrial and office specialization, and senior representative. Like designations, certifications are also specialized credentials for Realtors®. Maintaining a certification requires only an application fee and continued membership in NAR, but no annual dues. Certifications include an array of topics, including: digital marketing, luxury homes, military relocation, pricing strategies, investing, negotiation, second-home properties, short sales and foreclosures, and smart homes. Start becoming the specialist and professional your clients deserve.

Steve Perry President

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

June 2022 | Salt Lake Realtor ® | 7

Happenings

In the News

Active Listings on the Rise Homes for sale (active listings) are soaring across Utah. From May 1 to May 23, there were 3,500 to 5,000 active listings on any given day. A year ago, during the same period, active listings ranged from 2,100 to 2,800. The high mark, May 21, witnessed 5,009 active listings in Utah, 81% higher than a year earlier when there were 2,767 active listings. Listings tend to rise during spring months. Higher home prices and rising interest rates are also contributing to the higher number of listings, as fewer buyers qualify for mortgages.

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2021 Was a Record-Breaking Year in Real Estate Last year, home buyers spent nearly $3 trillion on real estate—the highest ever. That exceeds previous highs by more than $600 million that were set in 2020 and 2005, CoreLogic reported. Home prices are the main culprit behind that surge. By the end of 2021, home prices were 50% above their highest peak before the market downfall in 2006, CoreLogic reported.

Jason ©/Adobe Stock

Median Home Price Climbs to $630,000 The median price of a single-family home sold in April increased to $630,000 in Salt Lake County, a 22% increase over $515,000 a year earlier. Home sales (all housing types) in the county fell 16% in April. It was the 11th consecutive month of falling home sales year over year. New listings in April increased to 1,844, up 3% from 1,787 new listings in April 2021. Under contract listings (pending sales) fell to 2,041 in April, down 13% from 2,340 under contract listings a year ago. 8 | Salt Lake Realtor ® | June 2022

Home sales also contributed to the recordbreaking year; 2021 marked the largest number of transactions in more than 15 years, the report noted. Researchers also cite the difference in types of homes purchased as another factor. Sales of higher-priced and spacious homes with larger square footage have boomed since 2020. In the 2000s, however, home sales favored smaller units in lower-priced areas.

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June is Homeownership Month By The National Association of Realtors® The National Association of Realtors® is working closely with the Biden administration, Congress, and our industry partners on solutions to increase homeownership opportunities in America. Our work over the past year with the Biden administration on comprehensive policy proposals is building consensus that decisive action is needed. The White House included a historic funding request for affordable housing in its fiscal year 2023 budget, released in March. This shows how seriously the White House views the supply crisis – further highlighted by the release of the President’s Housing Supply Action Plan in May. NAR’s Vice President of Policy Advocacy Bryan Greene joined Gene Sperling, American Rescue Plan Coordinator and Senior Advisor to the President, and Erika Poethig, Special Assistant to the President for Housing and Urban Policy, for an April event with Third Way on increasing housing availability, affordability, and accessibility for all. 10 | Salt Lake Realtor ® | June 2022

NAR held a Policy Forum on May 20 focused on reforms that can open the door to more homeowners. The event, co-hosted with the Urban Institute, included a discussion with James Wylie from the Federal Housing Finance Agency (FHFA) on expanding access to underserved markets through sustainable and equitable access to credit. President Biden issued a Proclamation to mark National Homeownership Month 2022, saying in part: “… we recognize the importance of housing for all Americans. Whether owning, renting, or aspiring to do either, we renew our commitment to lowering costs and expanding access to safe, affordable homes that all Americans need and deserve. Together, we can ensure that every American has a safe place to call home.” In early May, thousands of Realtors® descended on Washington, D.C., and hand-delivered to Congress a comprehensive list of actions they can take to improve access to homeownership, including cosponsoring the following legislation:

• Housing Supply and Affordability Act (S. 902, H.R. 2126): Creates a Local Housing Policy Grant program for cities, states, tribes, and regional associations to enact pro-housing policies at the local level. • Neighborhood Homes Investment Act (NHIA) (S. 98, H.R. 2143): Offers tax credits to attract private investment for building and rehabilitating owner-occupied homes, creating a pathway to neighborhood stability through sustainable homeownership. The NHIA would expand homeownership opportunities and provide a powerful incentive to build and rehabilitate 500,000 homes for low- and moderate-income homeowners over the next decade. The NHIA is intended to fill the gap in areas where it is often more expensive to develop or rehabilitate than appraisal values will support. • GREATER Revitalization of Shopping Centers Act (H.R. 5041): Creates a grant within the Section 108 Loan Guarantee Program to incentivize public and private investment in abandoned and underutilized shopping malls. The Section 108 Program provides communities with a source of low-cost, long-term financing for economic and community development projects, which has proven effective in drawing additional investments into projects. This legislation

BUILD, BUY, REFI

would provide an additional grant of up to $5 million to communities with qualifying shopping centers to repurpose them for a range of uses, including the development of affordable housing. • Revitalizing Downtowns Act (S. 2511, H.R. 4759): Creates a Qualified Office Conversion Tax Credit to convert unused office buildings into residential, commercial, and mixed-use properties. • Housing Fairness Act (S. 769, H.R. 68): Reauthorizes and increases funding for HUD fair housing testing and enforcement programs. With our industry partners, NAR is pursuing bold goals to substantially narrow racial and ethnic homeownership gaps. NAR is a founding member of the Black Homeownership Collaborative and supports the 3by30 initiative, with the goal of adding three million net new Black homeowners by 2030. The initiative’s seven-point plan includes policy solutions such as down payment assistance, alternative credit, and special purpose credit programs. NAR advocates with our partners for greater affordable housing options – such as when NAR CEO Bob Goldberg stood with other housing leaders on the steps of the U.S Capitol last fall in support of affordable housing.

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2021 State of Hispanic Homeownership Report

The Urban Institute predicts that Latinos will account for 70 percent of homeownership growth over the next 20 years. By the National Association of Hispanic Real Estate Professionals STEADY HOMEOWNERSHIP RATE INCREASE In 2021, the Hispanic homeownership rate increased to 48.4 percent, up from 47.5 in 2019, an increase consistent with the trendline over the last seven years. Latinos added a total of 657,000 owner households between 2019 and 2021. Since 2014, the first year of positive homeownership growth following the Great Recession, Latinos have added a net total of 1.9 million owner households.1 LATINOS ACCOUNTED FOR A LOWER SHARE OF GROWTH In a sharp reversal of trends, the non-Hispanic White population accounted for over half (55.1 percent) of homeownership growth and 41.5 percent of 1 2

household formation growth since 2017. While Latinos accounted for the lion’s share of homeownership and household formation growth in the earlier part of the decade, Latinos accounted for just 20.6 percent of homeownership growth and 29.2 percent of household formation growth respectively during that same period.2 Speculatively, the unexpected boom in nonHispanic White household formations since 2017 (2.7 million) resulted primarily from Millennials who formed households at a slower rate when compared to previous generations and who relied on generational wealth. These individuals were able to take advantage of record-low interest rates and enter the homeownership market. However, given demographic tailwinds in favor of Latinos, this trend is not predicted to continue.

U.S. Census Bureau. (2022, February 2). Current Population Survey/Housing Vacancy Survey. U.S. Census Bureau. (2022, February 2). Current Population Survey/Housing Vacancy Survey.

12 | Salt Lake Realtor ® | June 2022

HOSTILE MARKET FOR FIRST-TIME HOMEBUYERS USING LOW DOWN PAYMENT PRODUCTS While Latinos are twice as likely to use Federal Housing Administration (FHA) to finance their homes than their non-Hispanic White counterparts, 85 percent of survey participants in NAHREP’s 2021 Top Real Estate Practitioners Study indicated that their FHA borrowers faced competitive disadvantages, 44 percent worked with their clients to switch them to conventional financing, and 17 percent reported that their FHA borrowers gave up on their home searches completely and continued renting. Accordingly, mortgage data indicates that Latinos experienced a 19.1 percent home purchase denial rate for conventional loans and were 81 percent more likely to be denied than their non-Latino counterparts.3 LATINOS DISPROPORTIONATELY IMPACTED BY LOW HOUSING INVENTORY Latinos are concentrated in areas experiencing the most severe housing inventory and affordability challenges in the country. Arizona (28.6 percent) and Florida (25.6 percent) experienced the highest home price appreciation in 2021, pricing out many would-be first-time homebuyers.4 These two states are home to 12.7 percent of the Latino population.5 In the 10 most populous Latino markets, housing underproduction significantly worsened from 2012 to 2019, with Texas and Florida, two states that house more than a quarter (27.6 percent) of the Latino population, exhibiting the steepest increases.6 Additionally, like much of the country, Latino

would-be homebuyers are losing a significant proportion of housing stock to institutional investors. In Q3 of 2021, at least 23 percent of properties were purchased by investors in each of the top 20 most populous Latino markets. Among these, several markets experienced investors purchase shares as high as 38 to 39 percent.7 LOWER-COST MARKETS OFFER GREATER OPPORTUNITIES FOR GROWTH The San Bernardino-Riverside-Ontario metro area in California, locally known as the Inland Empire, produced the most new Latino homeowners between 2019 and 2021, adding a total of 88,051 new Latino owner households.8 Looking ahead, 40.8 percent of Latino adults aged 45 and younger who don’t currently have a mortgage, are mortgage ready.9 A list produced in conjunction with Freddie Mac ranked all metros by the number of mortgage-ready Latinos and compared the percentage of those who can afford the medianpriced home to the amount of housing stock available. Findings showed the McAllen, El Paso, and Brownsville, Texas markets offer the greatest opportunities for Latino homeownership growth. Additional opportunity markets that topped the list were Las Cruces, NM in the Southwest, Memphis, TN in the South, and Cleveland, OH in the Midwest.10 AS THE COUNTRY AGES, DEPENDENCY ON LATINOS GROWS With a median age of 30, Latinos are 14 years younger than the non-Hispanic White population and continue

3 Calculations made using Home Mortgage Disclosure Act (HMDA) data for home purchases in 2020 in HMDAVision®️. 4 Boesel, M. (2022, January 4). CoreLogic. Annual U.S. Home Price Hits New Record in November. Retrieved from https://www.corelogic. com/intelligence/buy-stories/annual-u-s-home-price-hits-new-record-in-november/. 5 U.S. Census Bureau (2021, September 16). Decennial Census P.L. 94-171 Redistricting Data. P.L. 94-171. 6 Up for Growth. (2022) Housing Underproduction in the U.S. [Forthcoming Research]. 7 CoreLogic. (2021, September). CoreLogic Home Equity Report for 2021Q2. 8 Calculations made using U.S. Census Bureau, Current Population Survey, 2021 Annual Social and Economic Supplement (CPS ASEC) in CensusVision®. 9 Freddie Mac calculations using anonymized credit bureau data. Based on monthly snapshots from September 2021. 10 Freddie Mac calculations based on data from Redfin.com for December 2021 to investigate housing stock, anonymized credit bureau data for September 2021, Freddie Mac Home Value Explorer data for 2021. More information on methodology can be found at http://www. freddiemac.com/research/insight/20211021_future_borrowers.page?. June 2022 | Salt Lake Realtor ® | 13

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to be in their prime homebuying years. Nearly 2 in 3 Latinos are aged 40 or younger.11 Between 2010 and 2020, Latinos accounted for over half (51 percent) of the nation’s population growth12 and were responsible for the overwhelming majority (80.8 percent) of labor force growth.13 Projections show these trends will continue, with Latinos predicted to account for 78 percent of net new workers between 2020 and 2030.14 Furthermore, predictions indicate that between 2020 and 2040 Latinos will account for 53.1 percent of household formations, while projections show the number of nonHispanic White households will decline.15 CONCLUSION In 2021, the Hispanic homeownership rate continued its upward trajectory, consistent with the trendline of the last seven years. This positive growth comes despite a hostile 2021 real estate market, particularly for lowwealth, first-time homebuyers who rely on low down payment loan products. While the proportional share of new Latino homeowners decreased from its peak of 68.0 percent in 2015 to only 18.1 percent in 2021,16 the pendulum shift occurred while housing inventory dipped to historic levels. Additionally, rising price points pushed homeownership out of reach for many firsttime homebuyers, particularly in the heavily Latinopopulated markets of California, Florida, and New York.

Notably, many of the largest homeownership gains occurred in more affordable and less Latino-populated markets in the Midwest and the South. The widening housing inventory shortage, compounding underproduction of housing, and the rise in institutional investors sweeping up single-family homes have exacerbated the affordability crisis. NAHREP’s survey of real estate practitioners reaffirms these problems, indicating a strong seller bias in favor of institutional investors, conventional borrowers, and individuals able to make large down payments or all-cash purchases. Latino youth, high workforce participation, and unwavering commitment to homeownership attainment reassure that future growth in the homebuyer market remains largely dependent on the Latino population. Congruently, the Urban Institute predicts that Latinos will account for 70 percent of homeownership growth over the next 20 years. However, NAHREP warns that this prediction is not guaranteed. Inventory challenges must be solved, and the U.S. housing and home lending industries must create an environment that is more conducive to firsttime homebuyers, especially for communities of color. Failure to address the housing supply crisis could result in a steep decline in the overall homeownership rate and have a devastating impact on the nation’s GDP and economic well-being.

11 Calculations made using U.S. Census Bureau, Current Population Survey, 2021 Annual Social and Economic Supplement (CPS ASEC) in CensusVision®. 12 U.S. Census Bureau (2021, September 16). Decennial Census P.L. 94-171 Redistricting Data. P.L. 94-171. 13 Bureau of Labor Statistics. (2021). Employment status of the civilian noninstitutional population by race, Hispanic or Latino ethnicity, sex, and age, seasonally adjusted. Retrieved from https://www.bls.gov/web/empsit/cpseea04.htm. 14 Dubina, K. (2021, September 15). U.S. Department of Labor. Hispanics in the Labor Force: 5 Facts. Retrieved from https://blog.dol. gov/2021/09/15/hispanics-in-the-labor-force-5-facts. 15 Goodman, L., and Zhu, J. (2021, January). Urban Institute. The Future of Headship and Homeownership. Retrieved from https://www. urban.org/research/publication/future-headship-and-homeownership. 16 U.S. Census Bureau. (2022, February 2). Current Population Survey/Housing Vacancy Survey. 14 | Salt Lake Realtor ® | June 2022

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U.S. States with the Fastest-Growing Economies Nevada, Idaho, Utah, and Montana have seen rapid growth in both population and employment recently. By David Heacock Filterbuy

Since the beginning of the COVID-19 pandemic, experts have struggled to understand exactly what is happening with the U.S. economy. In the spring of 2020, many observers feared massive job loss and economic hardship, but robust federal stimulus helped stem the worst effects. Through much of 2021, the labor market experienced an unprecedented combination of relatively high unemployment, high numbers of job vacancies, and record numbers of job switches. Better-than-expected economic performance throughout the pandemic has given more households the means to spend on big purchases like houses or durable goods—leading to massive price increases in many categories. Looming over it all was the pandemic itself, as waves of COVID-19 could suddenly depress demand in categories like hospitality and travel or snarl the supply chains that the economy relies on. Today, the economy does show some worrying signs. Since the start of the year, the U.S. stock market has suffered staggering losses. Inflation has dominated headlines for almost a year, with the Consumer Price Index rising at its fastest rate in decades. The U.S. 18 | Salt Lake Realtor ® | June 2022

Federal Reserve has embarked on a series of interest rate hikes to cool demand in the economy, which should reduce inflation but could also send the economy into a recession. Global events like the Russian invasion of Ukraine and a recent wave of COVID cases in China could continue to disrupt global supply chains and make it harder to find certain goods. Amid all this news, consumer confidence in the economy has fallen in recent months and remains below pre-pandemic levels. But by many other key indicators, the overall economic picture is strong. Real GDP grew by 5.7% over 2021, powered by strong consumer demand and a rebound effect for many industries after a difficult 2020. The unemployment rate has fallen to 3.6%, just above the pre-pandemic level of 3.5%, and the tight labor market has helped push workers’ wages higher. Thanks to increased savings and strong investment returns during much of the pandemic, more entrepreneurs have had the resources to start new businesses. In some ways, these factors suggest that the onset of the COVID-19 pandemic was a significant but

temporary disruption to a strong run of economic growth. Business applications are up 60% over their numbers in early 2017, while total GDP has risen by 27.3% over the same span, and per capita income is up by more than a quarter, from $50,765 to $63,759. All of these positive signs for economic growth have happened despite relatively flat growth in the overall population and number of Americans who are employed, which suggests that businesses and their employees are becoming more productive over time. While population growth has slowed at the national level, states with increases in population and employment growth are seeing an extra boost to their economies. A greater number of residents and workers means more entrepreneurs are available to start businesses and more workers are around to help companies grow. The region that has seen this effect most directly is the Mountain West, where states such as Nevada, Idaho, Utah, and Montana have seen rapid growth in both population and employment recently. These locations join prospering Sun Belt states like Texas, Florida, and North Carolina in enjoying growth across several economic indicators. The states with the

fastest-growing economies all have more people, more workers, and more business creation contributing to greater incomes and GDP. Researchers at Filterbuy combined these factors to determine the states with the fastest-growing economies between 2020 and 2021. The data used in this analysis is from the U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, and U.S. Census Bureau. Researchers calculated a composite score based on the following factors, all weighted equally: GDP growth, new business growth, employment growth, per capita income growth, population growth.

Top 10 States with the Fastest-Growing Economies 1. 2. 3. 4. 5.

Nevada Montana Idaho Florida North Carolina

6. South Dakota 7. Texas 8. Tennessee 9. Utah 10. Indiana June 2022 | Salt Lake Realtor ® | 19

7 Real Estate Ideas That Deserve to Die Just because everyone believes something is true doesn’t make it so. By Meg White Conventional wisdom dies hard. Popular perceptions may drive the decisions you make about your real estate career, from how you market your business to what your office should look like. But longstanding beliefs—these days amplified by social media bubbles and spin—can be flat wrong. Through research, crowdsourcing, and interviews with industry experts known for their skeptical eye, we uncovered some of 20 | Salt Lake Realtor ® | June 2022

the most questionable dogmas, along with reasons they should be dismissed. Reconsidering these ideas may embolden you to challenge other dubious notions you encounter as you serve clients and manage your career.

1. DIY tendencies will lead to more FSBOs. Today’s do-it-yourself culture—driven largely by the explosion of information available on the internet—is

not causing more people to try to sell their homes on their own, despite fears to the contrary. If you examine the news reports about the supposed rise in FSBO sales, the “evidence” for the trend usually comes from people running websites with names like Owners.com and FSBOhomes.com. In fact, National Association of REALTORS® Chief Economist Lawrence Yun said the reality is quite the opposite. In recent years, the national FSBO rate as a percentage of all sales has held steady at 8 percent: “Despite the prevalence of online viewing, FSBOs are at near historic lows,” Yun said.

Through research, crowdsourcing, and interviews with industry experts known for their skeptical eye, we uncovered some of the most questionable dogmas, along with reasons they should be dismissed.

2. New windows make a home energyefficient. While a boon to curb appeal, new windows are unlikely to be critically important to a home’s efficiency. The Federal Trade Commission has warned or filed charges against more than a dozen window manufacturers to ensure their marketing is truthful. Some companies were promising up to 50 percent return on investment thanks to energy savings; Laura Stukel estimates that number to be closer to 3 percent. “A window is basically a hole, and a hole is never efficient. You can have a slightly better hole, but it will never be a major factor,” said Stukel, green, an agent with LW Reedy Real Estate in Elmhurst, Ill. She tells owners who want to cut energy bills to start with insulation—likely a third of the cost of new windows— or just get a smart thermostat.

3. Members of generational groups are all the same. Not all millennials want microapartments. Not all baby boomers fear technology. Not all seniors want to age in place. Not all members of Generation X are stuck in homes they bought during the boom. Researchers group generations together to better understand trends, but agents and brokers serve clients best when they park stereotypes at the door. “We get it: Millennials are everywhere. Connected boomers act and think just like millennials,” said Nobu Hata, NAR’s director of member engagement.

4. There’s no need to spend money on marketing when homes are selling quickly. During hectic times, it can be easy to overlook the reality that business won’t always be so brisk. Busy markets represent the best moment to invest in your business profile, according to Hata. “Now is the time to spend the money and build a portfolio of work. You need to have the right tools in place to be able to attract business when the market tanks,” he said.

of CLIMB Real Estate in San Francisco. “What owners and brokers need to do is really understand agents’ needs.” That’s why CLIMB’s in-house designer is constantly reexamining how salespeople use the company’s varied spaces and testing out new configurations for meetings and collaboration. CLIMB’s main, 2,500-square-foot office serves as a test lab and hub for smaller offices and co-working spaces. An important aspect of the brokerage’s physical presence is ensuring the CLIMB brand is present where consumers gather. The company’s 500-square-foot “condo store” on a bustling street entices shoppers to visit new multifamily buildings all over the Bay Area using virtual and augmented reality. A custom Airstream trailer offers a unique presence at community events and open houses.

6. Traditional zoning is always the answer. The idea of separating residential, commercial, and industrial space into separate pockets of land no longer fits with the way many people want to live, work, and play today. And some of the reasons behind this type of zoning aren’t applicable anymore (workplaces and factories are no longer the major contributors to pollution they once were, for one). Form-based codes offer one regulatory alternative where a community plan sets the development agenda and where mixeduse is the norm. Learn more at formbasedcodes.org.

7. Successful malls must rely on big department stores.

5. Brick-and-mortar real estate offices are a burden.

As longtime mall anchors J.C. Penney, Sears, and Macy’s falter, shopping mall owners are looking to grocery stores, restaurants, fitness centers, and even health care clinics as chief drivers of foot traffic. Experiential entertainment—encompassing everything from improv theaters to bowling alleys to karaoke bars—are also promising tenants for retail centers because they can fill large spaces with activities conducive to in-person engagement, a difficult element to reproduce online.

Brokers surveying thousands of square feet of empty cubes may be tempted to close their physical offices as a cost-saving move. “Moving away completely from brick-and-mortar is a mistake,” said Chris Lim, president

Rising Rates Are Battering Mortgage Lenders Nonbank lenders are laying off staff, selling servicing rights and otherwise trying survive. rights, this story is only Due to to limited

By Orla McCaffrey The Wall Street Journal

available in the print issue of the Salt Lake Realtor® magazine. A copy of this Some lenders are considering selling themselves, Mortgage lenders are scrambling to survive a sharp convinced it is theStreet only way to make it through, drop-off in the number of homeowners refinancing on the article is available Wall according to industry executives and advisers. their loans, with demand drying up as interest rates rise. website may apply. “Many lenders are losing money and have the prospect Mortgage giants Journal including Wells Fargo & Co. and but Rocket charges Cos. have trimmed staff this spring. Online lender Better. com has laid off or offered buyouts to about half of its workforce since last December. While home prices continue to rise and Americans are still buying houses, the drop-off in refinancing activity is a giant blow because refinancings made up the bulk of U.S. mortgage originations throughout the pandemic.

22 | Salt Lake Realtor ® | June 2022

of losing money for the foreseeable future,” said Steve Stein, a former executive at Stearns Lending, a mortgage company based in Lewisville, Texas. “Partnering up could be a good strategic alternative.”

Last month, Mr. Stein and former Stearns Chief Executive David Schneider launched an advisory firm to guide what they believe will be a wave of lenders looking to stay afloat.

Some lenders are selling assets, such as their rights to collect mortgage payments. Others are trying to drum up business by offering lower rates or cutting their fees. In March, mortgage lenders made $2.36 in profit on every $100 of a loan, the smallest amount since 2019, according to the Urban Institute. In 2020, that figure was as high as $5.99.

Originations at the 50 largest lenders fell 41% in the first quarter from a year earlier, according to industryresearch firm Inside Mortgage Finance. Mortgage volume is expected to fall 37% in 2022, according to the Mortgage Bankers Association, driven by the drop in refinancings.

consequence of the Federal Reserve’s attempts to curb red-hot inflation. The Fed has raised interest rates twice this year to try to cool the economy, and it ended its largest mortgage-bond buying program this spring. That has pushed up borrowing costs for mortgages, drying up the pandemic refinancing boom and even shoving some would-be home buyers out of the market.

April’s seasonally adjusted annual rate of home sales was the lowest since June 2020.

Due to limited rights, this story is only available in the print issue of the Salt It could get worse: The housing market still looks hot by “You saw lenders panic a bit with the decline” in historical standards, and home prices are still rising. But Lake Realtor® magazine. A copy of this originations, said Richard Martin, director of realthe Fed’s moves have raised questions about whether estate lending solutions at Curinos, a financial-serviceson the the U.S.Wall is headedStreet toward a recession, which would article is available research firm. likely slow home sales and make it difficult for some homeownersmay to keep up with their monthly payments. Journal website but charges apply. The mortgage market’s slowdown is another “It’s like the music has stopped,” said Jeff Taylor, a managing partner at Mphasis Digital Risk, a consulting firm that works with mortgage lenders on technology and risk. The average rate on a 30-year fixed-rate mortgage was 5.25% in early May, according to mortgage-finance

June 2022 | Salt Lake Realtor ® | 23

Image licensed by Ingram Image

Due to limited rights, this story is only available in the print issue of the Salt Lake Realtor® magazine. A copy of this article is available on the Wall Street Journal website but charges may apply.

24 | Salt Lake Realtor ® | June 2022

DOUBLE ENTRIES IN JUNE!

6 Ways to Promote Homeownership To get more people into homeownership, we need to overcome the ‘double trouble’ dilemma of low inventory and high prices. By Catherine Mesick You’re probably familiar with the statistic: Homeowners have a median net worth that is nearly 40 times greater than that of their renter counterparts, according to the Federal Reserve’s Survey of Consumer Finances. Owners gained a staggering $3.2 trillion in home equity in 2021. Yet the current low inventory and high prices, as well as the continued burdens of student loan debt and historic racial inequalities, have essentially closed off this great wealth builder for many Americans. “To get more people into homeownership ... we need to overcome the ‘double trouble’ dilemma of low inventory and high prices—and now interest rates,” said NAR President Leslie Rouda Smith in her Presidential Quarterly Update video released in late May. That’s something the National Association of Realtors® is working hard to do. NAR kicks off the month with the launch of a new Homeownership Month landing page that gathers the association’s policy priorities, research, and resources in one place. “Our job is to fight for your clients, consumers, and the entire industry to make sure we have enough housing 26 | Salt Lake Realtor ® | June 2022

supply to make homeownership accessible, available, and affordable,” said NAR Chief Advocacy Officer Shannon McGahn. Here are some of the activities and initiatives that NAR is highlighting as part of Homeownership Month: 1. NAR is working closely with the White House, Congress, and industry partners on solutions to increase housing supply and affordability. The association championed the inclusion of a historic funding request for affordable housing in the Biden administration’s fiscal year 2023 budget and applauded the White House for marking the importance of National Homeownership Month with a new proclamation. NAR is also currently advocating for the following key pieces of legislation: •

Housing Supply and Affordability Act (S. 902, H.R. 2126), which would create a Local Housing Policy Grant program for cities, states, and tribes to enact pro-housing policies at the local level. (continued on page 30)

APRIL

HOUSING WATCH Salt Lake County Ranks as the No. 6 Costliest County for Home Prices

Home prices continued their steep climb in April as the median sales price of all housing types sold increased to $555,000 in Salt Lake County. Salt Lake County’s median home price ranked as the sixth highest of 29 counties in the state. At $1.38 million, Summit County home prices were the priciest in April. Wasatch County came in second place with a median price of $960,000. Morgan County was No. 3 at $765,000. Grand County was No. 4 at $625,000. Washington County took the fifth spot at $596,000. Salt Lake County homes sales fell 18% in April. It was the 11th consecutive month of falling sales year over year. Falling sales are due to limited inventory, higher home prices, higher mortgage rates, and fewer move-up buyers. Properties in Salt Lake County remained on the market for 12 days in April, down from 14 days a year earlier. Nationally, home sales year-over-year, dropped 5.9% (5.96 million in April 2021), according to the National Association of Realtors®. “Higher home prices and sharply higher mortgage rates have reduced buyer activity,” said Lawrence Yun, NAR’s chief economist. “It looks like more declines are imminent in the upcoming months, and we’ll likely return to the prepandemic home sales activity after the remarkable surge over the past two years.” The U.S. median existing-home price for all housing types in April was $391,200, up 14.8% from April 2021 ($340,700), as prices increased in each region. This marks 122 consecutive months of year-over-year increases, the longestrunning streak on record. First-time buyers across the U.S. were responsible for 28% of sales in April, down from 30% in March and from 31% in April 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 20214 – reported that the annual share of first-time buyers was 34%. All-cash sales accounted for 26% of transactions in April, down from 28% in March and up from the 25% recorded in April 2021. Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, down from 18% in March and equal to 17% in April 2021. Distressed sales – foreclosures and short sales – represented less than 1% of sales in April, equal to the percentage seen in March and down from 2% in April 2021. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.98% in April, up from 4.17% in March. The average commitment rate across all of 2021 was 2.96%.

28 | Salt Lake Realtor ® | June 2022

June 2022 | Salt Lake Realtor ® | 29

Image licensed by Ingram Image

Promoting Homeownership (continued from page 26) • Neighborhood Homes Investment Act (S. 98, H.R. 2143), which would offer tax credits to attract private investment in building and rehabilitating owner-occupied homes. • GREATER Revitalization of Shopping Centers Act (H.R. 5041), which would create a grant within the Section 108 Loan Guarantee Program to incentivize public and private investment in abandoned and underutilized shopping malls. • Revitalizing Downtowns Act (S. 2511, H.R. 4759), which would offer a tax credit to convert unused office buildings into residential, commercial, and mixed-use properties. • Housing Fairness Act (S. 769, H.R. 68), which would reauthorize and increase funding for HUD fair housing testing and enforcement programs. 2. As a founding member of the Black Homeownership Collaborative, NAR is working with coalition partners to add 3 million net new Black homeowners in the U.S. by 2030 through the 3by30 plan. 3. NAR Research has produced a number of landmark reports and analyses on housing supply and affordability that are valuable resources for members, policymakers, and the public: The 2022 Obstacles to Home Buying report explores current obstacles to home buying broken down by race and ethnicity. •

The Double Trouble of the Housing Market report examines the two challenges that are simultaneously impacting the housing market: record home prices and record low inventory.

30 | Salt Lake Realtor ® | June 2022

•

A Snapshot of Race and Home Buying in America looks at homeownership trends, the mortgage market, and affordability by race and homebuyer demographics. Analysis and Case Studies in Office-to-Housing Conversions offers an in-depth study of how vacant office buildings are being converted into housing. State and local Realtor® associations are promoting homeownership in their communities with the support of Realtor® Party grants. For example, the West Georgia Board of Realtors® recently leveraged a Housing Opportunity Grant to offer a homeownership course for first-time buyers, and Michigan Realtors® successfully advocated for the passage of first-time homebuyer savings legislation with the assistance of an Issues Mobilization Grant. In addition, associations can apply for Fair Housing Grants to offer education and activities that further the mission of fair housing throughout the year.

4. Drive With NAR, the popular new Realtor® Magazine podcast, will release a Homeownership Month–themed episode on June 6 that will focus on how to help new homeowners enter the market. 5. That’s Who We R, NAR’s national ad campaign, demonstrates the difference Realtors® make in helping consumers achieve the dream of homeownership. 6. You can show your support for expanding homeownership by downloading NAR’s new Homeownership Month graphics and sharing them on your social channels. A 2022 graphic and general graphic are available.

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$3,907,237 IN AGENT COMMISSIONS SO FAR THIS YEAR*

IT’S LIKE PRINTING MONEY D.R. Horton, America’s largest homebuilder, is now developing 18 communities across northern, central and southern Utah.* Learn more about us at drhorton.com/utah D.R. Horton is an Equal Housing Opportunity Builder. *Amount represents commissions paid by D.R. Horton Utah for the 5-month period ending 5/31/2022. Broker Referral Program rules apply. Broker must accompany client on their first visit to the D.R. Horton sales office and client must not have previously registered on the D.R. Horton website or called the D.R. Horton Buyer Resource Center. Broker must hold a valid Utah real estate license as of the date of registration and buyer close of escrow. In the event more than one broker registers the same client, the broker confirmed by the client at the time of contract shall be conclusively deemed the client’s broker.

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