An unexpected settlement, an unexpected resignation and the unexpected closing of 1,000 stores. From the wild and wooly world of real estate, here are the Hits and Misses for the week of March 11-15.
Miss: NAR’s White Flag. The National Association of Realtors surprised many people earlier today by agreeing to a $418 million settlement that resolves the charges brought in the Sitzer/Burnett case. The settlement requires NAR to jettison its rules requiring that most residential listings include an upfront offer that informs the buyers’ agents how much they will get paid. NAR is not required to admit wrongdoing in the settlement, which comes one month after the organization vowed to appeal the Sitzer/Burnett verdict. While some observers are crowing that this will lead to lower home prices, there is a better-than-average chance that NAR’s detractors who pushed for this resolution will unleash the proverbial “be careful what you wish for” situation once the dust settles.
Miss: Disappearing Fudge. Another big surprise this week was the announcement that Housing and Urban Development Secretary Marcia Fudge was resigning. Her abrupt exit comes as the Biden re-election campaign belatedly acknowledged the many problems impacting the housing market. During her time at HUD, Fudge offered no new or innovative ideas to address these problems – nor did she even bother to acknowledge that the problems grew deeper over the past three years. It is unlikely that a successor will be named during this election year, and hopefully in 2025 we can have a HUD leader who can reanimate this sleepy department with vigorous and imaginative ideas instead of the same-old formula of grants and pilot programs that never seem to fix what is wrong.
Miss: Disappearing Dollar Stores. The biggest surprise on the commercial real estate side of the industry involved Dollar Tree Inc.’s announcement to close 1,000 stores operating under the Dollar Store and Family Dollar brands. The news of the closure came during the company’s quarterly earnings report, when Chairman and CEO Rick Dreiling declared, “We finished the year strong, with fourth quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments.” That might come as a surprise to the low-income households that rely on their soon-to-disappear stores, which are among the few retail outlets that have not seen crazy price spikes that became a hallmark of the Bidenomics era.
Miss: Not-So-Funny Wacky Weed. New York City is often called the “City That Never Sleeps,” but according to the New York Post that moniker is because apartment-dwelling residents are being aggravated from the stench created by their pot-smoking neighbors. Many of the city’s apartment buildings have notoriously thin walls, which explains why the marijuana scent gets shared between units. One tenant in a fourth-floor walk-up complained, “The smell is so strong it wakes me up or makes it hard to relax and go to bed.” Gee, didn’t anyone think this could be a possible downside back in 2021 when the city agreed to recreational cannabis legalization?
Miss: The Smaller Apple. For some New Yorkers, obnoxious pot-smoking neighbors were among the many things they are not missing as they exit for life elsewhere. The U.S. Census Bureau found New York City’s population lost nearly 78,000 residents in 2023, while nearly 550,000 residents – more than 6% of its population – moved out between April 2020 to July 2023. Incredibly, city officials are trying to cook those numbers by pointing to the large influx of illegal immigrants that moved in. A spokesperson for the Department of City Planning said his office was going to be “working with the Census Bureau to adjust the estimate” regarding outbound migration.
Hit: The New Homeowners. Some much-needed good news came via the National Association of Hispanic Real Estate Professionals (NAHREP), which reported the Hispanic homeownership rate reached 49.5% in 2023, with a net gain of 377,000 owner-households – the largest single-year increase since 2005 and the largest homeownership rate upswing for any racial or ethnic demographic group compared to the year prior. NAHREP noted Hispanic homebuyers during 2023 were at a median age of 30.7, making them the youngest racial or ethnic demographic – more than 10 years younger than non-Hispanics. This data was the saving grace in a week where the news was often anything but happy.
