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Real Estate Big Data

Why brokers and agents must understand real estate data standards

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real estate data standards

If you have never thought about how important data standards in the real estate industry are, here are some questions for you:

  • Have you ever been able to list and sell a home while typing the listing address (and other information) less than a dozen times?
  • Have you ever made the transition to a new MLS system only to have to set up all of your prospects all over again?
  • Why can’t you have someone build you a mobile app that leverages all the information in the MLS – listings, clients, saved searches, financial worksheets, etc.?
  • If you belong to more than one MLS, why do you have to enter the listing into each system separately?

Most brokers and agents just assume that the situations described above are just “how things are,” and that there’s no way to make things better. They are wrong. Believe it or not, brokers and agents can play a part in making things better. It all comes back to understanding how real estate data standards work.

Real Estate Data Standards

Data standards define a uniform technical method of moving information between computer systems. In the real estate industry, this standard is called RETS (the Real Estate Transaction Standard) and is managed by an organization called RESO (the Real Estate Standards Organization).

RETS has been under development since 1999. It isn’t even close to “done” because for most of those years no one was managing the process, and RETS development was driven almost entirely by the part-time effort of volunteers such as myself.

It is only in recent years that RESO was formed and professional project management was put in place to manage the volunteer effort. This has radically accelerated RETS standards development; if the industry puts more funding into RESO, it may be possible to hire more staff to make the process go even faster.

The Current State of Real Estate Data Standards

Most real estate systems “speak” a version of RETS that is only capable of moving listing information and MLS subscriber information. This makes it impossible to move some of the information types, such as your prospects’ information, described earlier.

Adding to the problem, there are over 850 MLSs in the U.S. and Canada today, and each has its own unique data fields. For example, Hawaiian MLSs have “lanais.” Moreover, each MLS has unique ways of describing fields that are common to all MLSs. For example, one MLS might have “ListingContractDate”, and others might have ListingDate, DateOfListing, ListDate, ListingContractDate, or AgreementDate. Some MLSs will even have entirely different ways to describe the same thing. Imagine one MLS describing tree coverage as light, medium or heavy wooded, and another describing it in terms of % coverage. There are hundreds of similar examples. All of this makes it challenging for someone who wants to write one program or create one website to use data from multiple MLSs.

While many people in the industry are frustrated that RETS isn’t further along, keep in mind that when it comes to web standards, it took the Web standards organization (the W3C) more than 10 years to release a new version of HTML (version 5). RETS has come a long way in that same timeframe. Still, it’s okay to want RETS to move faster and fulfill its promise, solving the kinds of issues described earlier in this article.

Standards Adoption is Key

Thankfully, RESO volunteers are working to solve the problems described above. The new “data dictionary” provides standardized ways to refer to data covering a wide variety of data types: property (including media and listing history), membership, office, contacts, saved searches and open houses. That’s not every type of data one might want to move from system to system, but it’s getting there.

BUT, while the improved standards have been created, they haven’t been adopted by MLSs and other tech companies.

What Can YOU Do About It?

You can make sure your MLSs and other software providers know that you understand about data standards and you want them to make standards adoption – and integrations based on them – a priority. By telling them so, you can get all the benefits of the rapidly evolving standards.

Some MLSs might say, “We’re dependent on our MLS software vendor to do that for us,” and they are telling the truth there. Nonetheless, the vendors won’t move faster until their MLS customers tell them it’s a priority, and your local MLS won’t do that until its subscribers tell it in turn that standards are a priority. So again, it comes back to you.

Also, if you have a bit of technical skill or even just knowledge of the data, you can get involved with RESO to add your efforts to that of other volunteers’. And, if you have some financial resources, you can join RESO as a member (as I have, putting my money where my mouth is).

For more information about real estate data standards, visit reso.org.

Matt Cohen has been with Clareity Consulting for over 17 years, consulting for many of the real estate industry’s top Associations, MLSs, franchises, large brokerages and technology companies. Many clients look to Matt for help with system selection and negotiation. Technology providers look to Matt for assistance with product planning, software design, quality assurance, usability, and information security assessments. Matt has spoken at many industry events, has been published as an author in Stefan Swanepoel’s “Trends” report and many other publications, and has been honored by Inman News, being listed as one of the 100 Most Influential Real Estate Leaders.

Real Estate Big Data

Time to fake gasp: Housing starts plummeted in April

(REAL ESTATE NEWS) The global pandemic has hard hit several sectors, and new home construction is one of them (to no one’s surprise).

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housing starts + construction

COVID-19 has hit the housing market, to literally no one’s surprise. Housing starts plummeted 30.2% in April as our globe struggled with how to social distance and survive an economic shut down. Home building activity hit a five-year low, according to the U.S. Commerce Department.

Compared to April 2019, housing starts dipped 29.7% across all four regions, despite many states allowing builder activity to continue as “essential” during stay-at-home orders sidelined many. During the same period, permits for housing fell 21%.

Starts didn’t fall for lack of trying, rather supply chain interruptions that we suspect will continue into the summer during this adjustment phase of reopening the economy.

May will likely continue the trend of restricted building activity. Most economists expect a widespread contraction in the second quarter. Housing alone isn’t braced for impact, rather combining that with a hit to the gross domestic product (GDP) as consumer spending and business investment continue to retract.

One silver lining is that despite this negative news, new home construction didn’t decline nearly as sharply as various other sectors of the American economy, a hopeful sign for the market.

Further, on the “relatively low level of single family starts and completions,” the The Calculated Risk blog calls this period the “wide bottom,” as they forecast “following the recession, and now I expect some further increases in single family starts and completions once the crisis abates.”

So take a big deep breath and fake gasp at the fake shock you’re feeling about housing starts slowing in April. And get ready to do it again in four weeks about May, then again in June. We’re not at the bottom, nor are we nearing it, and the market is changing, but no one is surprised that as the global pandemic hits the global economy, there will be ripples throughout every sector.

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Real Estate Big Data

What the most recent NAR survey says about home buying changes

(REAL ESTATE BIG DATA) Recent NAR survey shows a change in desires in home features and attitude toward buying in the future, once COVID is over.

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home buying

COVID-19 may have halted real estate sales, but once America isn’t sheltering in place any longer, home sales should go on. A May survey from the National Association of Realtors® provides insight into the effect of the coronavirus pandemic on the real estate market.

The Economic Pulse Flash Survey surveyed over 90,000 members with a response rate of almost 2,300. The highlights are encouraging. Over 77% of potential home sellers will list their home once COVID-19 restrictions are released.

Home Buying/Home Selling Should Boom After COVID

Not only are home sellers planning on listing their homes, home buyers are getting ready to buy. Record-low mortgage rates stand posed to get people into new homes that offer stable payments. NAR also found:

  • Home buyers are looking at suburban communities rather than urban neighborhoods because of COVID-19.
  • Home buyers are shifting priorities of home features. The COVID-19 pandemic has made buyers look for homes with space for family and home offices. They also want yard space to exercise and to grow a garden.
  • Home sellers aren’t reducing listing prices to attract buyers in the COVID-19 aftermath.

Home Buying Delayed

NAR also found that most home buyers were simply delaying the process of home buying or relying on virtual communication to continue the process. Interestingly, 18% of Realtors reported that there was no change in the process.

These Realtors continue to meet with clients and show properties in person. But 30%o of residential home sellers were not allowing in-person showings. Another 36% were relying on virtual showings, while most were asking home buyers, appraisers and agents to use sanitation procedures to reduce the spread of the virus. Open houses are on pause.

We don’t know what the new normal will look like in a few months. Real estate might be experiencing a slow period right now. But there does seem to be hope that it will recover.

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Real Estate Big Data

People aren’t paying their mortgages, how can the market adjust?

(REAL ESTATE BIG DATA) COVID-19 has greatly impacted jobs which leads people to not be able to pay rent or mortgage, so how has the government responded, and what does that mean?

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mortgage market

Many people knew the spread of the coronavirus was going to be a big deal but it’s probably fair to guess that at the same time, it feels like it all elevated pretty quickly in the United States.

February feels like it was a lifetime ago and many may have been going about their day to day. Since early March, it has been a domino effect where people were pushed to work remotely (or let go), small businesses were forced to close their doors (or move to online sales), states put in shelter in place orders and mass events were cancelled. It’s no surprise that if you have to shut your business doors or you lose your job that without income, it’s hard to pay your bills.

The nationwide standard that we see is about 37% of one’s salary going to your housing (rent or mortgage – and of course, this varies across the nation). “The standard measure of housing affordability is 30% of pretax income.

Just last week, 4.4 million more Americans filed for unemployment (bringing the 5-week total to 26 million according to CNBC). Within those millions of people, there are a variety of stories – some have a spouse that is still working, some may have been good about their savings, some may be able to ask for help from friends or family, but many were living paycheck to paycheck and there’s nothing to fall back so this is a big blow.

The data told us last week that about 6% of Americans (3 million) have had to request to put their mortgage payment into forbearance. There are a lot of scary things going on right now, but you can imagine that it is really scary to not be able to pay for your housing. This is also very true for renters across the nation that were given notices from their landlords that they were still expected to pay – and pay on time.

How has the government responded?

The CARES (Coronavirus Aid, Relief, and Economic Security) Act included a $2 trillion COVID-19 economic relief package that passed on March 27, 2020 with bipartisan support. It included many areas:

  • Housing
  • Credit Report & Student Loans
  • Small Business Administration Provisions
  • Infrastructure
  • Tax
  • Unemployment Benefits for Self-Employed
  • Families First Coronavirus Response Act (FFCRA) Amendments

Just like many packages, some are feeling left out or that they don’t meet the requirements for the aid, but in regards to the housing market, this past week was that Fannie Mae and Freddie Mac (GSE’s, Government Sponsored Enterprise) are now allowed to buy mortgage loans that are in forbearance which was not the case before.

Per Market Watch,

…In a forbearance agreement, a borrower may skip or make reduced payments for the duration of the agreement.

Moving forward, Fannie Mae and Freddie Mac will be allowed to purchase loans in forbearance, the Federal Housing Finance Agency said this month.

“We are focused on keeping the mortgage market working for current and future homeowners during these challenging times,” FHFA Director Mark Calabria said in the statement. “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending.”

“Typically, delinquent mortgages and loans in forbearance are ineligible for purchase by the two government-sponsored mortgage enterprises. The move to change the policy was made because some borrowers have sought forbearance shortly after closing, before the lender had the opportunity to sell the loans, the agency said.””

What does this even mean?

This announcement should loosen the market somewhat, although there are certain eligibility criteria and limits, according to FHFA:

  • The mortgage loan must have closed on or after Feb. 1, 2020, and on or before May 31, 2020.
  • The loan must be a mortgage purchase transaction or a no-cash-out refinance.
  • The loan cannot be more than 30 days delinquent.

In addition, eligible loans will be assessed an additional loan-level price adjustment — 5% for first-time homebuyers and 7% for non-first-time buyers.

If you read that for a second, does this only apply to people that literally bought their home right before March shelter in place announcements were made? Many are turning to their personal neighborhood Facebook groups to ask what others might be doing or if anyone has recommendations on what they can do if they have lost their sources of income.

Wherever you may be in shuffling things around to pay for your housing, this previous article, NAR Chief Economist’s COVID-19 worrisome predictions does give you some ideas on home loans and mortgage rates and what is happening in attempts for a housing recovery, as well as resources that are worth repeating: SBA loan programs , Unemployment Assistance, and Mortgage and Personal Finance policy.

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