5 to Watch: April 2010

News and trends that we're keeping an eye on this month.

April 1, 2010

1. Nationwide Open House

A major consumer marketing blitz spawned by executives at local and state REALTOR® associations, the first-ever REALTOR® Nationwide Open House Weekend will be held April 10–11.

The goal: to give sellers an opportunity to showcase their home while the federal buyer tax credit is still available. Participating open houses will be marked with colorful balloons, which local associations are providing to members. Associations also will be reaching out to media to communicate the general benefits of owning a home and using a REALTOR®.

Most, but not all, state REALTOR® associations are participating, and event details vary by area. Contact your state association for more information.

2. No Plans to Tweak New GFE

Lenders have had three months to test drive the revised Good Faith Estimate form that the U.S. Department of Housing and Urban Development rolled out on Jan. 1, and despite complaints that the form is ambiguous and confusing, HUD won’t be making any changes in the near future.

Speaking at NAR offices in Washington in early March, FHA Commissioner David Stevens said changing the form at this early stage will only add to the confusion and lenders just need more time to take advantage of HUD’s training.

As long as lenders make a good-faith effort to comply, HUD won’t be enforcing compliance for another two months. The original GFE was in place for more than 30 years, Stevens said. Now it’s time to give this new one a chance.

3. Higher Interest Rates

Look for interest rates to climb beginning in late spring as the Federal Reserve stops buying mortgage-backed securities. The Fed committed about 18 months ago to purchase $1.25 trillion in Fannie Mae and Freddie Mac securities, a move aimed at keeping liquidity flowing so rates would stay low and Fannie and Freddie would continue buying conforming loans.

However, the Fed’s commitment ends March 31—and while the full impact won’t be known for several months, it’s almost certain to cause rates to rise.

NAR Chief Economist Lawrence Yun anticipates an increase of 30 basis points (100 basis points equals a 1 percent change), but he notes that home sales shouldn’t be heavily impacted as long as the economy keeps growing and jobs are created.

Of course, rates could inch up independently of this action, because with economic growth comes increased demand for loans.

4. End of Private Transfer Fees?

Private transfer fees, a type of encumbrance on real estate titles that some developers impose to offset their costs, are increasingly being banned by state governments that don’t see any public benefit.

Florida, Kansas, Missouri, and Oregon are among those that have put a stop to the fees. Texas also has banned them, though just for residential properties, and California has passed a disclosure law so buyers are aware of the fees early in the deal.

Supporters say the fees are a way for strapped developers to generate revenue and keep home prices affordable. But critics say that unlike encumbrances that pay for utilities, recreational amenities, or conservation easements, private transfer fees don’t offer any public good.

NAR in February rolled out assistance, including free legal help, to state REALTOR® associations interested in working with their state legislatures to address the fees. For more information and a video on this issue, visit REALTOR.org/realtormag and search for "private transfer fees."

5. The iPad’s Big Debut

Apple’s high-profile unveiling of its new tablet-style PC, the iPad, back in January prompted technology and business pundits to wonder if the product would live up to its buzz. After all, it doesn’t seem to offer any new technology but rather brings established features to a new platform. And since it appears that the iPad can run only one application at a time, it doesn’t lend itself to multitasking.

Still, many real estate pros are excited about the planned April release, as the iPad presents some intriguing possibilities for showing listing information and property photos on the go, as well as managing transactional documents and using digital signatures. But what the product can really do for real estate won’t be entirely clear until it’s in the hands of users.

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.