The National Association of Realtors Legislative Meetings & Trade Expo kicked off May 3rd and continued this week. For the second year in a row, due to the pandemic the annual meetings were held virtually and accessed for free by NAR's more than 1.4 million members in the U.S. and overseas.
"The virtual platform has been a great advantage for members who otherwise would not be able to travel to Washington, D.C., especially for our International Realtor members who are based all over the world," said Joanne Fraser, president of the Silicon Valley Association of Realtors.
NAR President Charlie Oppler began his welcome remarks with a moment of silence for all the families affected by the pandemic. He said this year's theme is "Home Front," as Realtors have been "defenders of the home front," doing things for their communities, protecting rights, expanding access, and building prosperity.
The meetings covered a wide range of topics from federal financing, housing policy, state and local issues, fair housing, and global issues. At the diversity committee meeting, Oppler told members, "Diversity and inclusion now are core values of our association."
Oppler noted the 2020 changes to the Realtor Code of Ethics (Standard of Practice 10-5) signaled "hate speech and harassing speech had to go." This year, Oppler is issuing a challenge to members to complete the Fairhaven simulation, watch NAR's implicit bias training video, and take the At Home With Diversity certification course.
Realtors discussed1031 exchanges and President Joe Biden's proposal to cap profits from land sales that can be tax deferred at $500,000. Another topic focused on the EB-5 Reform and Integrity Act of 2021, which seeks to address fraud and national security vulnerabilities in the EB-5 Regional Center Program. The program was created to attract capital from foreign individuals who meet specific investment and job creation requirements. The bill also calls for a 5-year reauthorization of the program, which is set to expire at the end of June.
At the Commercial Economic Issues and Trends Forum, NAR chief economist Lawrence Yun predicted considerable capital will be pumped into the economy in the second quarter, with consumers eager to tap into a year's worth of savings and unspent stimulus funds.
"Economic expansion and the jobs recovery will lead to rises in occupancy across all commercial real estate property types," Yun said. "However, overall consumer price inflation is expected to increase 3 percent by the end of 2021 and likely will stay stubbornly high through next year, which will increase interest rates to 3.5 percent."
Hotels, restaurants, theaters and other entities across the entertainment and hospitality industries are expected to benefit from this pent-up demand as many cities have already eased or ended pandemic restrictions. Yun expects apartments and rental markets to regain footing as the economy continues to recover. Office vacancies are forecasted to remain elevated at 16.5 percent in 2022. Retail vacancies are projected to settle at 11.5 percent.
"The industrial sector has been the star throughout the pandemic," said Yun. "There's been great demand for industrial space, and reconversion of some disused properties like older shopping malls can help meet this demand."
John D. Worth, executive vice president for research and investor outreach at Nareit, noted commercial valuations are recovering, but improvements are occurring unevenly across various property types. "We're going to go through a period where companies will experiment with how they use office space, but I'm bullish about the outcome of the office space sector after a period of experimentation."
Both Yun and Worth agree office vacancy rates will remain elevated as hybrid work models become the norm in America. "Work from home is the most important question facing the future of commercial real estate coming out of COVID-19," said Worth.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
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