Buyers continued to come out and make accepted offers on single-family homes and condominiums in the final month of the year as the number of homes put under agreement and prices increased in December. As a whole, 2017 saw both homes put under agreement and average median prices increase compared to 2016.
December Pending Sales:
Pending sales have been up 11 of the last 12 months
Pending sales have been up 10 of the last 12 months
The third Wednesday in January marks the end of formal sessions for the first year of the two-year legislative cycle. The end of the two years usually coincides with a windfall of activity on Beacon Hill. However, this past year went against that trend and ended with a flurry of activity to close out just the first year.
The biggest story of 2017 did not emerge until the end of the year when Senator Stan Rosenberg elected to temporarily step down as President of the Senate. Rosenberg has stepped down while an investigation is conducted into whether he violated any Senate rules in connection with allegations that his husband claimed to hold sway over the Senate and sexually assaulted men with business on Beacon Hill. The Senate elected Senator Harriette Chandler to serve as Acting Senate President during the course of the investigation. At this point Senators Linda Dorcena Forry of Dorchester, Eileen Donoghue of Lowell, Karen Spilka of Ashland, and Sal DiDomenico of Everett have expressed interest in becoming the next leader of the Senate, though it may be weeks or months before the investigation is complete.
Governor Baker’s Housing Choice Initiative
On December 11, 2017, the Baker-Polito administration announced a comprehensive new initiative to increase housing production across the Commonwealth. The administration’s Housing Choice Initiative creates a new system of incentives and rewards for municipalities that deliver sustainable housing growth, creates a new technical assistance toolbox to empower cities and towns to plan for new housing production, and proposes legislative changes. The legislation, An Act to Promote Housing Choices, promises to deliver effective zoning at the local level. The legislation would reduce the vote threshold for a number of key Realtor® zoning priorities, including accessory dwelling units, multifamily zoning, and cluster development, which are all key components of MAR’s H.O.M.E. Bill. This change would make it much easier to pass these pro-housing zoning changes at the local level.
The administration hopes these changes will encourage and empower municipalities to plan and build the additional housing that the Commonwealth needs to continue to thrive. MAR looks forward to working with Governor Baker, the legislature, and other housing production proponents to meet a goal of producing 135,000 new housing units by 2025.
Speaker DeLeo Fundraiser
On November 30, 2017, about a dozen Massachusetts Realtors® took advantage of the opportunity to attend a fundraiser supporting Speaker of the House, Robert DeLeo. The Speaker took time to talk with each Realtor® and showed a profound understanding of several key Realtor® issues, including taxes, housing production, and zoning.
On December 19, 2017, the Joint Committee on Housing held a hearing on legislation seeking to amend Chapter 40B of the Massachusetts General Laws, the state’s Affordable Housing zoning law. Chapter 40B enables local Zoning Boards of Appeals to approve affordable housing developments under flexible rules if at least 20 to 25% of the units have long-term affordability restrictions. Also known as the Comprehensive Permit Law, Chapter 40B was enacted in 1969 to help address the shortage of affordable housing statewide by reducing unnecessary barriers created by local approval processes, local zoning, and other restrictions. Many of the bills heard on December 19, sought to weaken the law by changing the definition of “affordable” or amending the law to make developments more difficult to build. MAR has historically opposed, and continues to oppose, changes to Chapter 40B that would weaken the law’s effect.
Energy Scoring Hearing
On November 6, 2017, MAR General Counsel Mike McDonagh and MAR Past President Laurie Cadigan testified before the Joint Committee on Telecommunication, Utilities, and Energy. They provided testimony in opposition to a bill that would require homeowners to conduct a MassSave Home Energy Audit and receive a home energy score prior to listing a home for sale. The testimony focused on the disruption such a policy would bring to the housing market, as well as the infringement on private property rights it would have. This bill is very similar to a proposal that Realtors® defeated last session. MAR will continue to work with the committee to encourage homeowners to make energy efficient upgrades to their homes.
Federal Tax Reform
The last big news for Realtors® to close out the year was the passage of federal tax reform. While NAR remains concerned that the overall structure of the final bill diminishes the tax benefits of homeownership and will cause adverse impacts in some markets, the advocacy of Realtors® helped NAR gain some important improvements throughout the legislative process. NAR’s efforts helped save the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will see a significant deduction on that business income. Be sure to visit NAR’s website for more information: http://narfocus.com/billdatabase/clientfiles/172/19/3062.pdf.
What to expect in 2018
After what some are calling a slow legislative year in 2017, the House and Senate have many issues that they can direct their attention to in 2018. Housing continues to be an issue that tops the list in both chambers of the legislature and the Governor’s office. MAR will be working to help pass meaningful and effective housing production legislation, while opposing any legislation that impedes new construction.
Another priority issue for Realtors® is a potential change to the Massachusetts tax code. The legislature plans to hold a hearing this month on policies to respond to changes to the tax code at the federal level. One important change at the federal level capped state and local tax (SALT) deductions at $10,000, increasing the liability on higher earners and property owners in Massachusetts and other states with relatively high taxes and property values. We will continue to update MAR members as the Joint Committee on Revenue begins its work.
Closed sales for single-family homes rose half a percent in November, while prices rose more than four percent. Year-over-year condominium sales saw a hike of over 10 percent, with prices rising almost eight percent. Inventory dropped to a record low for the month of November.
For years, the National Association of Realtors® (NAR) and a broad coalition of technology and real estate industry partners have urged the FCC to uphold the former rules under which Internet Service Providers (ISPs) operate and can do business. “Net neutrality” is the previous consensus position, meaning that internet service providers can’t speed up, slow down or block any websites or applications.
That consensus shifted sharply on December 14th, as the FCC released a plan to repeal provisions ensuring net neutrality and allow ISPs to begin deciding what type of content and sites their customers may access on their service.
Currently, the internet is fairly egalitarian; if you have a connection, a computer or mobile device, and a browser, you can go to whatever website you like. The agreement you’ve entered into with your ISP states that they can’t dictate where you decide to look for news, what recipe websites you’re allowed to access, or, more relevant to Realtors®, where you might look to find your next home. Right now you’re allowed to begin your search wherever you like, and follow it wherever it takes you. You’re just as likely to land on the website of a small local Realtor® office as on a major listing aggregation site like Realtor.com, Zillow or RedFin. You let your wish list, location and other criteria guide your search, and your browser takes you wherever they lead, regardless of the size of the company who’s got the listing.
The loss of net neutrality has the potential to change that experience in profound ways.
Have you ever watched a sports talk show and said to yourself, “These guys are idiots, I could do a way better job than they could!” Now, you may or may not be right about your sports-talk potential, but the way the internet is currently regulated, you have many opportunities to prove it. You could start a blog, a podcast, write analysis for a small sports site, post your thoughts on Twitter or Facebook, or get yourself a nice webcam and post them on YouTube, seated behind a desk wearing a tie, just like the pros.
If you’re good enough and your content is relevant, you can succeed. Countless people in myriad professions and specialties do it every day, and they do it on the strength of a neutral platform, where their thoughts and ideas are just as accessible (just click a link!) as those produced by major media companies with huge advertising budgets and institutional power.
If you think of the internet as if it were cable TV (something you’re likely to get from the exact same company, by the way) right now, you get every channel imaginable for the same rate. You decide what you see. But what if your internet options looked like this?
This is the future. And in that future, large companies who have the ability to pay will dominate the landscape online, as they do in most other media. Small and large players in the real estate industry could be affected if internet service providers such as Comcast and Verizon create fast and slow lanes of web traffic based on financial arrangements they’ve made with content providers. The mom-and-pop Realtor® office that has the perfect home listed for you (or your next client) might not be able to pay enough for you to see it. Your office’s ISP may decide the MLS vendor you use is not paying enough, and slow their traffic to a crawl. Or it may decide to make your competitor’s advertisements and website load much faster than yours, based on what they’re willing to pay. Under the new rules, there’s nothing stopping them.
Ninety-three percent of NAR members use the internet to conduct and promote business. NAR President Elizabeth Mendenhall said in a statement:
“Technology is an increasingly important part of the way our membership delivers its services, whether through streaming video, drone technology, or other applications. We remain concerned that a rollback of net-neutrality rules could lead to blocking, throttling, or discriminating against Internet traffic, or even ‘paid prioritization’ arrangements that put small mom-and-pop businesses at a disadvantage in the marketplace. We will continue working with the FCC to share these concerns and ensure a fair and open internet where everyone can succeed.”
It’s a new day on the internet. There is still time to ensure these changes are implemented fairly and responsibly. But a major barrier to those goals has fallen, and time will tell what the consequences are.
Single-family pending home sales rose over 12 percent this month from November of last year, with prices rising over four percent. Pending condominium sales were also up, rising more than two percent over last year, while prices increased slightly. Realtors® confidence in the market was up almost 20 percent in November, while confidence in prices raised only slightly over last year.
November Pending Sales:
Pending sales up for 11 out of the last 12 months
Pending sales up for nine out of the last 12 months
Governor Charlie Baker announced a plan Monday to add more housing to the anemic Massachusetts market. The plan includes $10 million dollars in grants and incentives to municipalities that add housing quickly. He’ll also ask the legislature to make it easier for communities to change zoning rules that make it difficult to build certain types of housing.
“More housing is the best way to solve our ongoing inventory crisis,” said 2017 Massachusetts Association of Realtors® President Paul Yorkis, president of Patriot Real Estate in Medway. “We are glad that the Governor is making housing production a priority and we look forward to working with his administration to tackle this important issue.”