Portland housing affordability and interest rates.

 Yes, interest rates for residential mortgages are nudging up.  We're seeing rates on FHA, conventional and  jumbo loans above three percent.  Don't get me wrong, a rate of 3.25% or so, is a GREAT rate.  Just not if all your friends got rates at 2.65%.  Most home owners either got a good rate when they bought, or refinanced during these several years of low rates, leaving rate increases to effect folks currently or planning on buying.  Here's a chart showing how rising interest rates can effect monthly payments, or buying power. 

As interest rates go up, buyers can afford less of a house payment.  This shrinks the number of buyers who can afford any particular house, thus decreasing competition on any given listing.  For the past few months, sellers have seen less competition on their listings. 

Due to be updated any day now, the quarterly affordability index was already on the move in June.  Affordability is calculated according to a formula from the National Association of REALTORS®. The formula assumes that the buyer has a 20% down payment and a 30 year fixed rate determined by Freddie Mac. In the month of June 2021, a family earning the median income ($96,909 in 2021, per HUD) can afford 103% of a monthly mortgage payment on a median priced home ($521,000 in June).  

You can see back in the Great Recession, 2007, affordability was quite low, with households not able to afford even 85% of the monthly mortgage. Then, coming out of the recession, in 2011-2012, affordability peaked.  

We do expect to see some wage growth, which may increase affordability.  Though wage growth will need to outpace the rise in interest rates and prices, to have any effect on affordability.  Stay tuned as I'll post the updated affordability index when it is released. 

If you have questions about the real estate market, especially your particular situation, call, text or email.  leslievjones@gmail.com 503-312-8038  

Some cool tools

There are a variety of ways to look at real estate values, and changing real estate markets. 

The general public uses Zillow a lot for this purpose.  Zillow is about big data, and uses a variety of data feeds to arrive at a value.  I track what Zillow says as compared to actual sale prices of transactions in which I am involved.  Sometimes Zillow is spot on, and some times Zillow is in left field. 

Realtors have a similar tool which provides an automated home valuation.  The system, allows us to customize the valuation by adding information specific to the subject property. We also use our Multiple Listing Service and a variety of programs to arrive at home values.

As many real estate websites do, mine has a pricing calculator .  Click the "sell" tab and enter your address.  It will give you both the Zillow and SmartZip value estimations. 

In a quickly changing market, pricing is tricky.  No doubt.

The FHFA (Federal Housing Finance Agency) tool helps get at value a different way.  It looks at the Metropolitan Statistical Area (MSA's),  the quarter in which the property was purchased and quarter in which one is looking for a value.  It projects what a given house purchased at a point in time would be worth if it appreciated at the average appreciation rate of all homes in the area.  This isn't the end all, be all of pricing.  But I do find it to be a good data point in a pricing strategy.  

Play around with the FHFA Home Pricing Calculator.   What do you think? Does it seem to reflect reality?

The Federal Housing Finance Agency website has a variety of other tools and data.  I also like the Four Quarter Appreciation Map. Holy Cow, look at Austin, TX with 35.1% appreciation over the previous 4 quarters,  and Boise, ID at 41.1%.  Makes the Portland metro area's 18.3% four quarter appreciation look downright reasonable!

If you want a more accurate value estimation, give me a call, text or email. I'd be glad to come by and work up a market analysis. leslievjones@gmail.com  503-312-8038   

Street of (differing) Dreams

I had the occasion to visit the 2021 NW Natural Gas Street of Dreams a few weeks ago(the 2020 Street of Dreams was cancelled due to COVID).  I don't always go, but our company was a sponsor and we held an agent appreciation event there.  This year's show was in Happy Valley. It featured three homes at the main site, a container home and sleeping pod, and more affordable homes at a second site.

The Street of Dreams showcases trends in floor plans, features and interior design in the housing industry. The houses are usually quite large; largest this year was 7338 sq ft. Zion  (Heritage Crest 3).  I was drawn to the 3834 sq ft Ohana (Heritage Crest 2).  Both were built by Red Hills Construction.  Hygge, Heritage Crest 1, was built by Anlon Custom Homes.

As you might imagine all the homes had very generous outdoor "rooms" and spaces for outdoor entertaining (a nod to COVID?).  I'm always on the look out for the quirky feature.  This year's: jets to dry the shower after use.  I suppose this makes cleaning easier.  Back in the 1976 (before my time in real estate) they featured...built-in microwaves.  Cutting edge.

I was especially interested in the container home and sleeping pods. The Home Builders Foundation partnered with MODS PDX and Base Design Architecture on this project, showcasing affordable and energy efficient design options for addressing houselessness.  These particular units will be donated to one of the Home Builders Foundations' affiliate affordable housing partners. It would sure be great to see these designs in housing solutions around the metro area.

The Street of Dreams predecessor was the Parade of Homes, which started in 1937 and featured homes on N Michigan in Portland's Piedmont neighborhood.

Photo courtesy of the Portland Historical Society

Coincidentally, one of these homes is currently on the market with a colleague.  6106 N Michigan is a 2613 sq ft, 5 bedroom, 2 bath home , listed for $750,000. The house features original period details, hardwood floors, coved ceilings, gas fireplace insert, leaded glass windows. Kitchen w/butcher block counters & nook. Like the current Street of Dreams houses, this house also has a covered outdoor "room".

Today is the last day of the 2021 NW Natural Gas Street of Dreams. Online tickets may be in short supply.  Keep an eye out for the container home and sleeping pods to make an appearance. If y0u're waning more information on 6106 N Michigan, contact me, or the listing agent, Jamie Orr at jamieorr@remax.net.

What Seasonal Slowing Looks Like

 The Portland real estate market has been crazy for the past year. After the initial COVID shutdown, it roared back with a vengeance. There was no normal, seasonal slow down in the summer, and we sped through civil unrest, wildfires and smoke, the winter holidays, an unconventional  election, assault on the capitol, snow, ice and widespread power outages.

Our active real estate market has had many components; high demand, low supply and low interest rates.  This resulted in very short market times, multiple offers well over list price (when the list price was priced to recent comparable sales), as-is sales, cash sales, buyers paying the difference between the high sale price and an appraisal at market value, sellers getting up to 60 days possession of their house after closing (at no cost), buyers releasing earnest money to sellers in advance of closing and so on. 

We still have much of that going on.  But we are seeing a sliver of what I think is seasonal slowing.  This is not a "crash". It's an easing in the rate of price increases. It's fewer multiple offers, and not as high over list price. We see some properties stay on the market for a few weeks.  Some buyers are getting the opportunity for inspections.  Heck, some are even getting concessions from sellers in inspection negotiations.  

Real estate agents are breathing a sigh of relief as the pressure cooker we've been in lets off a bit of steam.  Unless of course,  there is a seller expecting the conditions of a few months ago, which may or may not occur for their particular property.  

With a slight shift, comes the education piece (like this 😊). Buyers who tired of getting beat up and out, may want to come back in the market about now.  Sellers afraid to sell their home as they might not be able to find a new home, might be able to get an offer accepted contingent on the sale of their current home.  And sellers expecting the highest and craziest competition for their listing, may need to revisit those expectations.

Our multiple listing service releases monthly statistics around the 10th of the month. So in July, we'll see the June numbers.  In advance of that, I look at the number of properties coming on the market as compared to the number going under contract (absorption). I look at the market time for properties currently on the market as compared to the market time for those under contract, or recently sold.  These are a few of the ways we can get sense of what is happening in the short term.

We are, after all, cramming two summers into one.  Some have backlogs of unused vacation from 2020, and face a "use it or lose it" policy. Many are taking this opportunity to see family they've missed in the past year +.  Family reunions, weddings and other get togethers are back on the table. No wonder things aren't as frenzied.

If you've got questions about your particular neighborhood, house or situation, get in touch. I love talking about real estate.

Remember that home inspection?

Many of you, who own your own homes, most likely had a home inspection done at the time of your purchase. Quite possibly, information from the inspection was used to negotiate seller repairs or seller credits.  And then, you filed it away somewhere, or not. 

That inspection had all sorts of valuable information; how many amps are in your electric panel, how old is that hot water heater?  There are also home maintenance tips, suggestions of conditions to keep your eye on, and often repair/scope of work suggestions.

I know, I know.  Life gets so busy when you buy a house.  Once the dust settles from your move, digging up that inspection just isn't a priority.

Until...you're getting ready to sell, and your real estate agent asks if you tended to those inspection items.  You might even have gotten a seller credit for a repair you planned to handle once you owned the house.  And quite possibly,  didn't use that money for the intended repair.  You are not alone

Don is currently doing some repair work to the south side of our house. That side is exposed to lots of sun and rain, with not much eave over hang for protection.  Caulking around the window trim perhaps wasn't kept up as well as it might have been 😬. We're lucky to have avoided moisture intrusion into the walls, due to decent flashing, making this job a bit easier. 

Home repair issues rarely fix themselves, or improve with age.  As the saying goes, prevention is the best medicine. 

For many of us, our home is our biggest financial asset, plus...it's home.  Give it a bit of love. Dig out that old inspection, or, if I assisted you in your purchase, get in touch.  I probably have it in my file somewhere.   If you need referrals for tradespeople, I'm glad to send a few along.  Contractors are busy these days and construction materials are crazy expensive, so stand forewarned. 

What is it about "soft-close drawers"?

 I've noticed of late, there is one feature almost every buyer looks for, or tests in a house.  The kitchen drawers.  Soft-close drawers.  I'm not saying they don't care about other features.  But this one feature is consistently looked at; no matter the price or age of the house, no matter the demographics of the buyers.

Is it a proxy for other features of the house? If they have soft-close drawers does it also mean the house has heated bathroom floor, air conditioning, or a high efficiency furnace?  

Or are folks truly focused on just the soft-close drawer; the ease and lack of sound they offer?  Are they really that great? I don't have soft-close drawers, so perhaps have not yet been indoctrinated.

From a more utilitarian view, there are other things I see in a house, that often reveal more about the house.  If the house is a recent fix and flip, but is lacking the required smoke and carbon monoxide detectors, or seismic straps on the hot water heater, I can't help but wonder what else was neglected.  Similarly, during a home inspection, a horribly dirty furnace filter can indicate an overall lack of attention to maintenance. 

In valuing a house, I'll admit I don't factor soft-close drawers into pricing.  But I do think their presence makes buyers more apt to offer higher on a house. Who knew?

Is there a feature or a component of a house that provides deeper insight for you?

And in case you are thinking about adding soft-close drawers?  Here's a video from the folks at Rockler. 

Update on Portland's Residential Infill Plan - RIP

                                    Residential Infill Map

 The Residential Infill Plan has been several years in they making.  The overall plan was adopted by City Council in 2020, with refinements and rule making ongoing.  A few elements of the plan were put in place in 2020, with the remainder of the plan taking effect on August 1, 2021.

Depending on the type of project one is working on, some are rushing to submit for permits before August 1st for approval under the current rules.  Some are holding off until after August 1, to take advantage of benefits of RIP.

The overall plan is quite complicated (as planning in Portland tends to be).  The plan has some re-zoning, some new overlay zones, limitations on building size and more options for increased density.  The plan, as you might imagine, has been quite controversial.  From what I can tell, it limits large houses, allows for higher density, especially for affordable housing, and has a focus on neighborhood livability.  

The size limitation is certainly one of the more controversial elements.  The plan uses different floor area ratios or limitations (FAR), depending on the type of housing being built.  For example, in a R5 (one unit per 5000 sq ft) zone, a single family home would have a FAR of 0.5. Meaning the above ground floor area of a single family home would be restricted to 2500 sq ft.  Keep in mind, this is not the foot print of the house, but the total sq ft above ground.  In the same zone, if one were building a duplex, the FAR would be 0.6, allowing for a total of  3000 sq ft in the two dwellings.  And for a triplex, the FAR will be 0.7, or a total 3500 sq ft in the three dwellings.  And, a single family home would not be allowed on a double lot.

For neighborhood livability and cosmetic considerations, the city will look for front doors to be positioned closer to the ground and will allow larger/deeper eaves extending into the set-backs.  Most parking requirements are also being eliminated.

If a project contains three or more units, one will be required to be "visitable" by folks with mobility challenges.  Think of it as ADA lite.  One unit will be required to have a zero step entry, and to have a restroom and living space on the ground floor.  This isn't full on ADA, but an effort to make more of our housing welcoming to those with mobility challenges.

With increased density, there is a concern about our tree canopy.  That is, will there be enough room on lots, to accommodate a vital tree canopy into the future?

As with many plans and initiatives in Portland, some think the City is over reaching, and others believe they haven't gone far enough.  With the RIP, some think the allowance of developing additional dwellings on residential lots is giving "the developers" a gift.  Builders and developers I have spoken with see the 2500 above ground square footage limitation as a real hinderance to their business model.  

What do you think?

Can you just sell it yourself?

 

As usually happens in a strong sellers' market, many sellers choose to avoid paying a commission, and sell their property themselves.  I get it.  Real estate fees can feel hefty, and while they are paid on the gross sales price, a seller is paying it from their equity; usually less than the sales price.

In some cases, sellers can successfully sell their property without incurring risky liability.  The fallacy though, is that getting one willing and able buyer is the main job of a realtor, and that a busy market makes that easier. 

Yes, in this market, getting a willing and able buyer is pretty easy.  Knowing how to use timing, property condition and access to maximize not only offers, but quality offers, is a different story.  How long do you leave a property on the market to get "good" offers? Is there a preferable time the week to put a home on the market? If its so easy to get a buyer, do you really have to allow lots of showings at what might be inconvenient times?  How do you evaluate multiple offers (hint, the highest offer may not be the best offer)? Can you steer clear of fair housing issues while representing yourself? How and what information do you disclose to a buyer, and when?

These questions are just about marketing and getting offers.  Never mind the prep work that can go into getting a listing ready; home energy score, staging, cleaning, professional photographs, video walk through, floor plans.  And what about accepting an offer and putting one in a back up position?  Or, working the timing of a sale for a seller; do they need o stay in the property a bit after closing to facilitate their next move?  Where are they moving and when? Do they need the funds from this sale to finance their move?  If their new property falls through, are they still willing to sell at the negotiated terms?

As managing broker, I review all the transactions in our office and trouble shoot with agents in challenging transactions.  This gives me an intimate look into problem transactions.  A few days ago our agent was representing the buyer in a transaction with a for sale by owner.  Everything seemed in order, until the sellers found out the purchase of their next home fell through. They no longer wanted to close the transaction they were in.  In representing themselves, they had made no provisions to terminate their sale should their purchase fall through.  The buyer had spent inspection and appraisal money, and given notice in their rental from which they were moving.  That's a mess.  An avoidable mess.  Both parties are currently being represented by attorneys. 

I haven't even touched on selling tenant occupied properties, condominiums with HOA issues, buried oil tanks and so on.  But you get the point.  There are cases in which an astute seller can sell their own property, no doubt. Sometimes, the non-arms length transactions fall in this category; selling a rental to the occupying tenant, selling to a relative or neighbor.  

Yes, this is a strong sellers' market and fast moving. Sometimes those dynamics actually make transactions more difficult. If you have questions about selling, or buying in this climate, get in touch. I'm glad to walk you through some scenarios.

Sometimes it's the little things

While having a distanced beverage with a friend from work, he remarked that he'd been thinking of selling his house and buying another.  But, that during his COVID isolation, he'd gotten around to lots of little house projects.  Once he painted that small patch on the wall left from the new thermostat, he loved his house again.  Mind you, when thinking of moving, it wasn't because of the patch, though certainly it bothered him.  He couldn't enunciate exactly why he wanted to move.  But once it was fixed/painted, he felt much better about his surroundings. 

Clutter kind of works that way for me.  I don't know it is bothering me until I get rid of it.  Ahh.  Its like a breath of fresh air. Same with yard work.  I'm not much of a gardener these days, but oh, how much better I feel when the yard is tidy.

I think we just get used to the slow dilapidation of things around us.  I don't notice the issue because it got that way slowly.  The plate in by our shower control came un-secured, so it doesn't line up with the control.  This drives me crazy.  But not crazy enough to deal with it.

Often, when clients get their house all spiffed up to sell, they remark on how nice it feels, and that they should have done the work long ago.  And often, during a home inspection , sellers bristle to a repair request with; "its been that way a long time" as if a buyer should be okay just because they (the sellers) have put up with the issue for a long time.  

It is interesting, that we don't necessarily notice the weight we carry with some of these seemingly minor things.  Only realizing, once they are tended to, their effect on us.  Have you tended to a nagging chore around the house?  Is there one that still bugs you?  

I love a good puzzle?

In the early days of "stay home, stay safe" my daughter and I did a fair number of puzzles.   I have always loved puzzles; jigsaw puzzles, crossword puzzles, sudoku and real estate puzzles.  I think that's why I like working in real estate so much as there are lots of real estate puzzles.

Here are a few examples of real estate puzzles.

When you need to sell your house, to buy your next house; Navigating this depends on the tolerances of the client; can they stand the stress of two transactions at once?  Would they be better off selling, renting for a bit and taking time to find their new home?  Does the idea of moving twice drive them mad?  Solving this puzzle is about tolerances and the market.  

When you have a certain amount of resources (time and money) to fix up the house for sale; what projects need to be done from a repair point of view, what projects bring the most return,  what projects will appeal the most to potential buyers?  

We want a rental unit how do we best do that; build an ADU, add an addition to our existing house, keep our existing house as a rental and buy a new home, buy a rental.

Real estate puzzles are made up of many pieces:  the dwelling, neighborhood, condition, size, resources of buyer/seller, household and life pressures (new baby, aging parent, job relocation).  Also in play are market conditions, interest rates, economy, school districts, local property and income taxes, local regulations regarding tenants, energy efficiency zoning and use etc.  

Don and I have been grappling with a real estate puzzle for a few years (puzzles aren't always solved quickly). That puzzle is how to downsize to a dwelling capable of one story living, energy efficient (we're nerds that way), with room for his tools and building materials.  We have a variety of resources, though not unlimited, one of which is Don's ability to build or fix most anything.  

There are plenty more real estate puzzles, some solvable and some not.  I'm always glad to discuss your particular puzzle. We may conclude it's not solvable at the time, may identify some things to work on to help solve it, or might even solve it neatly and quickly. What kind of real estate puzzle have you been working on?

NAR's Race and Home Buying in America report

 

The National Association of Realtors recently released their study on race and home buying.  The study looks at trends over the past ten years.  The majority of year specific data is from 2019, though there is some COVID data also.

Real estate has long been known a major wealth creator for American households. In addition to wealth, research shows: "Owning a home is associated with better educational performance in children, higher participation in civic and volunteering activity, better health care outcomes and lower crime rates in the communities."

We also know full well that BIPOC households have been systematically denied access to homeownership since the concept of homeownership was invented.  This plays out in the disparity of household wealth between Black and white households. 

In 2019, the average net worth of white households was $188,200, as compared to the $24,100 net worth of Black households. At the same time, the white homeownership rate is 70% as compared to 41% for Blacks.  

In Oregon, the white homeownership rate is 65% (lower than much of Amercia) and the Black homeownership rate is 36%.  When looking at affordability in Oregon, 46% of white households can afford to buy the average house.  Only 22% of Black households can afford that same house.

As you might imagine, in Oregon, Black home buyers finance their real estate purchases at higher rates (93%) than what home buyers.  Our current market is flush with cash offers, making homeownership an increased challenge for those financing their purchase. 

But get this, in Idaho, North Dakota and South Dakota, there is NO data showing Black home buyers in 2019. whoa.

Check out the study linked above.   I was surprised, in a good way,  that single Black women bought homes at a higher rate, 31%,  than did single white women, 17% ( I know those numbers can tell a variety of stories, and are affected by a variety of factors). Do you see anything that challenges your assumptions? 

What does it take to get an offer accepted ?!

Unless you are a buyer, in the thick of house hunting, or a seller entertaining multiple offers on your house, you probably don't know to what lengths buyers are going to get their offers accepted.

The short supply of houses has buyers going to extremes:

-Many buyers are offering 20% or more over the list price.

-Earnest money, while usually 1% of the purchase price (or more) is often 5%, or more, of the purchase price.

-Earnest money is released to the seller and non-refundable to the buyer, so even if a buyer doesn't like what came up on inspection, or if the appraisal comes in low, the seller keeps the earnest money. 

-Most often, buyers' offers are subject to buyers' approval of professional inspections within 10 business days.  These inspections might include a scope of the sewer line, testing the air inside the home for radon and searching for underground oil tanks and/or testing soil around buried oil tanks.   In the interest of getting their offer accepted, many buyers are waiving some or all of these inspections. 

-Financed transactions are subject to the independent appraisal value being equal to or greater than the agreed upon purchase price.  Some buyers are offering to increase their down payment to make up any gap between the high sales price and a lower appraisal.

-As our sale agreement reads, buyers have the right revoke their offer (with full refund of their earnest money) within 5 business days of receiving the seller's property disclosures.  Buyers are waiving this ability in an effort to make their offer look more solid.

In addition, buyers will take certain major systems in as-is condition, so the seller need not worry about it coming up in inspection. Buyers also often give sellers up to 60 days to remain in the home after closing, paying no "rent" to the buyers.  And, some buyers let sellers leave whatever garbage, debris and personal property the sellers no longer want.

And then we see some very creative efforts; give the sellers a week at the buyers vacation home (Oregon Coast, Hawaii, etc). Buyers pay for a home warranty to cover the property during the sale/escrow period, buyers have goodies (wine, pizza or flowers to name a few) delivered to the sellers at the time they know sellers are reviewing offers. This last one has, at times,  back fired, with the sellers feeling stalked or pressured. 

Crafting an offer that a buyer is comfortable and able to fulfill can be a bit like threading a needle; how much could they increase their downpayment to make up for a ow appraisal?  What inspections are they truly okay with forgoing?   And what other enticements might work?  

In general, from a seller side, the seller isn't always basing their decision on top sales price.  What a seller usually wants is a good price, from the buyer who really will perform on this property, with a minimum of hassle or drama. An intricately written sale agreement, weaving the buyers' abilities and sensibilities, can be off putting.  Most sellers will favor a cash offer (no appraisal) waiving all inspections and to the timeline of the seller's choice (quick close? long close? post-closing possession?).

All of this is happening, mind you, under quick timelines.  Most houses hitting the market these days will have a deadline for offer submittal. Even getting in to see a popular house can be challenging as our online scheduling platform can quickly run out of available appointments. It is rare for a buyer to get a second look, before putting together one of these aggressive offers. 

First time and lower income buyers are at a real disadvantage.  Many of the above mentioned concessions rely on the buyer having a financial cushion to absorb the liabilities that might arise.  Buyers with low down payments don't have the extra cash to bridge a low appraisal, pay for an unseen property condition issue, or lost earnest money. 

Real estate is often a stark lesson in the "haves" and "have nots".  

"Good Schools"

 

As you might imagine, when working with buyers, especially those new to our city, "good schools" are often on their list.  Realtors have long avoided steering buyers toward or away from specific schools.  We do though, try to know a bit about the schools in the communities in which we work.  That's part of our service, right?

There are websites and services that rank schools, usually on test scores; some adding in student/teacher ratios.  Directing buyer clients to these sites helps us avoid the appearance of steering or modern day redlining.  And folks have long accepted test scores as a proxy for "good schools".  Are these really good schools? Test scores usually show us who goes to the school, rather than anything about the actual school.

"Good schools" can mean different things to different people, so let's not assume we share a common interpretation of what makes a good school.  Strong community? Programs from which my child will benefit or that will engage them in learning? A facility accommodating a special needs student? High achieving students as a peer group or role models? Athletic programs of interest, or a specific coach or trainer?  The list goes on. 

"Good schools" can also mean; people like me,  high test score schools, schools with lots of resources, schools with families with whom I'd want to associate, schools in "good neighborhoods. And so on.

As fair housing laws were passed, and thank goodness, the importance of fair housing has finally started to be a value, looking for "good schools" became a way to ask for or steer toward "good neighborhoods" without seeming racist or elitist.   Its not that you don't want to live in an integrated neighborhood, you just want the best for your kid, right?

Let's not underestimate the intensity/vehemence of wanting the best for your kid.  As a mother, I was in awe of the strong visceral emotion I came to know as my inner"mother bear".  That feeling propelled me to do, and through things I'd otherwise never imagine. And yes, my kid went to a "good school".  It was a public school, and in a nearby neighborhood (or even considered lesser than where we live). But admission, at the time she got in, was not by lottery, but by interview, work samples (yes, for an incoming kindergartner) and observations in play groups.  And big surprise, the school was not particularly integrated nor inclusive. 

It's kind of the perfect storm; parents propelled to act in the best interest of their kids colliding with often their own values of equity and inclusion. I don't have the answer, and nor do I think the answer is an easy one.  But let's recognize when "good schools" or avoiding "bad schools" isn't about the schools. 

If you've not had a chance to watch it, the Newsday investigation into fair housing and real estate on Long Island is eye opening.  "Good schools" makes. star appearance. 

Realtors, Ethics and Hate Speech

 A quick lesson; real estate agents are licensed by the state.  Our governing agency is the Oregon Real Estate Agency.  Many licensees choose to join our professional association; the National Association of Realtors (NAR).  So, not all licensees are Realtors.  One must be a member of the professional association (at least here in Oregon) to be a member of the multiple listing service, which is the huge database (and more) through which we "list" and access properties available for sale.

The National Association of Realtors has long had a code of ethics by which one must conduct ones business.  The code is changed and updated, carefully, recognizing we do business in varying communities across the country.

NAR recently made two notable changes to the code, one of which is getting a fair amount of attention.  

Previously, the code's applicability was limited to real estate related activities and transactions involving realtors. So, members could engage in behavior prohibited by the code, if it couldn't be tied to real estate related activity or a transaction.  Beginning January 1, 2021, the applicability of the code of ethics reads: "A Realtor shall be subject to disciplinary action under the code of ethics with respect to all of their activities.".

In  addition to the above change, Standard of Practice 10-5 was added: "Realtors must not use harassing speech, hate speech, epithets, or slurs based on race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.".

I really like this.  In expanding the code to apply to all our activities, is the recognition that the housing industry is a far reaching and important part of society.  Realtors can have outsized influence in how people access housing and home ownership.   The housing industry ( real estate agents, lenders, funders, government loan backers such as Fannie Mae, property managers, developers, city planners) has long stood between, and actively kept protected classes from accessing stable housing. We know housing is a foundational piece of household stability and wealth building from which protected classes have been excluded.

Tying that expansion of the code to the prohibition of hate speech is the right move.  Can someone really spew hate speech with their friends on Friday night and then provide equitable service to protected classes the following day?  I don't think so. 

As you might imagine, there are cries of stymied free speech rights, among others things.  Some of this fervor comes from not understanding the difference between hate speech and other speech.  One could say (not that I would), "I don't support Black Lives Matter".  In my mind, this would not be considered hate speech.  But if one let loose with the "n" word, it would classify as hate speech.  

I hope some earnest conversations can be had, helping Realtors parse this difference.

And should you wonder about enforcement, our code is generally complaint based.  And regional associations; the Oregon Realtors and Portland Metro Association of Realtors, are required to act on complaints and enforce the code, otherwise, they risk expulsion from the National Association. 

Do you belong to a professional association?  And if so, are there behavior expectations or some sort of code?  Indeed real estate agents, working with the public and as gatekeepers of the important and universally needed resource of housing, may have a higher bar than your industry.  Still I'm curious.