Housing Ecosystem Hit by Historic Government Shutdown

At the time of this writing, the longest government shutdown in U.S. history ended after 35 days, lasting from Dec. 22, 2018 to Jan. 25, 2019. While the shutdown has ended, there’s always the potential for another as political unrest remains.

Regardless of what the future holds, many government agencies have been affected, causing federal employees to either be furloughed or work without pay. In addition, national parks were forced to close, and affordable housing funding has come to a halt, among other effects that will continue to be felt during the course of the year.

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The Future of Real Estate Investment: Opportunity Zones

According to the 2017 Distressed Communities Index by the Economic Innovation Group, one in six Americans, approximately 17 percent of the population, live in economically-distressed communities, and the average state has 15.2 percent of its population living in these struggling areas.

The new Opportunity Zone (OZ) tax incentive was created as part of the 2017 Tax Cuts and Jobs Act to encourage investment in low- to moderate-income communities across the country through tax benefits, such as deferring tax on capital gains by making an investment in any of the designated zones. So far, 8,761 communities covering all 50 states, including the five U.S. territories, have been designated as opportunity zones, and they will keep this status for 10 years.
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How the Passing of Bill SB 826 Stands to Disrupt California Real Estate Businesses

In September, California Governor Jerry Brown signed the SB 826 bill into law, a landmark legislation requiring female representation on corporate boards. Specifically, the bill requires that at least one woman be on the board of publicly-held companies in California by year-end 2019. Despite concerns over its potential efficacy, the bill is an important step in diversity and inclusion, as well as for the advancement of women.

In an official letter, Governor Brown stated, “There have been numerous objections to this bill and serious legal concerns have been raised. I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation.” He continued, “Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America.”

How does this concern real estate? Publicly-held real estate companies in California are most likely to be affected by this new legislation, requiring female representation on their boards. This might be a productive start for increasing the share of women in areas where they’re greatly underrepresented, such as commercial real estate.

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Artificial Intelligence in Real Estate: How to Leverage the Disruption

Discussions about how artificial intelligence (AI) will alter the workforce as we know it is a hot topic among thought leaders, including those in the housing and real estate ecosystem. While some fear that improvements in machine learning and cognitive intelligence will present a threat to jobs—which is certainly an important concern—others see AI as a helpful tool for real estate professionals.

When hearing the term “AI,” people often think of chatbots and Siri or Alexa; however, experts see AI as having greater potential as a common helper in the real estate industry—being able to communicate with buyers in an intelligent manner and identify important signals for property regulations, such as RegTech.
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How Agents Can Better Serve Single-Women Homebuyers

Married couples might comprise the greatest share of homebuyers, but single women follow close behind, especially retired women over the age of 55, according to the Wall Street Journal. Gone are the days when women had to wait until marriage to buy a home; now, women are feeling more confident in creating their own sanctuary and means of wealth-building through homeownership.

If agents hope to maintain their success in the industry, they must prepare for a growing market of single-women homebuyers—a trend that will only increase as more women earn degrees, attain higher-paying jobs and seek properties to buy. Whether your client is a six-figure earning professional, a single mother or a divorcee looking to start a new chapter in her life, or all of the above, here are some important factors to consider when helping your clients, courtesy of the 2018 NAWRB Women in the Housing Ecosystem Report.

Couples, married or unmarried, normally have more buying power than single homebuyers because they have two sources to pull from that could go toward mortgage payments. According to 2016 NAR data, married couples have the highest income of around $99,200, compared to single buyers; however, dependence on a primary income is not deterring single women from buying homes.

Home-Buying Process for Single Women

  • Single women are independent; thus, all home-buying decisions—including where to live, how much of a mortgage payment they can afford, how to decorate their house, etc.—will be made by them.
  • Single women are interested in buying a home as a means of wealth-building. They’re taking the necessary steps to ensure their financial security in the future, whether or not they have a partner.
  • As a single woman, size may not be as important as location and affordability. Some women are interested in owning a home to get a pet, so a sizable backyard is a must.
  • Stringent lending standards make it more difficult for singles applying for loans with one income.

Home-Buying Process for Single Mothers

  • With a limited income, saving money will be difficult because of child-related expenses. Single mothers are also looking for a property they can afford in the long term.
  • Single mothers will want a safe, supportive community with a low crime rate and reputable education system. Having nearby infrastructure and basic amenities like shopping centers, hospitals and parks will be preferred.
  • Working mothers, like other single women, have limited time on their hands; however, single mothers are crunched even more for time, as being a mother is another job in and of itself.
  • Smart home technology, such as security alarms, intercom systems, carbon monoxide detectors and nightlights, could be especially important and appealing to single mothers.

A home is a woman’s sanctuary, a place to call her own, and an invaluable asset that cements one’s professional progress and economic foundation. It would be beneficial for agents to keep this in mind as they assist the needs of women buyers. Your clients will return the favor by referring your services to like-minded friends interested in taking the leap into independent living and property investment. 

Increasing Gender Diversity Without Quotas

Diversity and inclusion (D&I) continues to be a priority in the corporate world, especially in the housing ecosystem. To increase opportunities for women, some have advocated legislative action. One example is California’s potential SB 826 bill, a law that would require the state’s largest public companies to have at least one woman on their board by the end of 2019. While such policy action may be perceived as long overdue, enforcing quotas is not an all-encompassing solution to the lack of diversity in companies’ executive positions.

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Building an Authentic Client Base On and Offline

Women using a smartphone in the display and technology advances in stores. Take your screen to put on advertising.

When the Pew Research Center began measuring social media usage in 2005, 5 percent of U.S. adults used at least one social media platform. Today, 69 percent of the public utilizes some form of social media.
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Blockchain Won’t Make Real Estate Agents Obsolete

Blockchain is an emerging technology that’s impacting the way industries conduct business, especially real estate. Not much is known about blockchain among the general public besides its association with bitcoin. While real estate professionals should pay attention to this new trend—as it will significantly change transactions and data-sharing—it will not make their careers obsolete. Agents have the invaluable ability to build relationships and empathy, which are pivotal to success in the industry. Blockchain is merely a helpful addition to their toolbox.

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Affordable Housing and HELOC Deductibility Under New Tax Laws

The new tax bill passed by Congress in December 2017, celebrated as the Trump Administration’s first major legislative victory, will have inadvertent consequences for potential homebuyers looking to buy homes in high-end markets, and for those with a home equity line of credit (HELOC). A decrease in home prices and caps on tax deductions, among other effects, will lower affordability in some high-tax states.

The GOP tax bill, which includes a $1.5 trillion tax cut, lowers tax rates for individuals and corporations, and introduces limitations on mortgage and tax deductions.
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Women of Color: A Powerful Demographic for the Future

Portrait of group of businesswomen standing together in office

The statistics are captivating: American Express OPEN’s 7th Annual State of Women-Owned Businesses Report reveals that businesses owned by women of color have grown 467 percent since 1997. Numbering 5.4 million, minority women-owned businesses comprise 46 percent of all women-owned firms, have over 2 million employees and generate $361 billion in annual revenue.

In the recovering American economy, why aren’t women of color being touted as a powerful demographic?
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