If you put your finger on the pulse of the housing market right now, you’d see some much needed health improvements – inventory levels are finally loosening up for the first time in years, and the rate of price increases abated in the fourth quarter.

The median price of an existing home in Q4 rose 4.0 percent to $257,600 compared to the fourth quarter of last year, according to the National Association of Realtors (NAR).

Dr. Lawrence Yun, NAR Chief Economist, said in a statement that despite hurdles last year, “the close of the fourth quarter was promising.”

“Home prices continued to rise in the vast majority of markets,” said Dr. Yun, “but with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace.”

Existing home sales fell 1.8 percent in the fourth quarter compared to the previous quarter, and 7.4 percent over the year.

Why?

Dr. Yun said the West Coast needs more homes built. “The West region, where home prices have nearly doubled in six years, is undergoing the biggest shift with the slowest price gain and large buyer pullback.”

Comparing Q4 of 2017 and 2018 shows some relief when it comes to tight inventory levels which has edged hopeful homebuyers out of the market, increasing 6.2 percent over the year.

Housing affordability is the key ingredient to a healthy real estate sector going forward, which Dr. Yun says will require more homebuilding of moderately priced homes (a drumbeat the economist has been steadily beating for years).

“Housing starts fell far short of historically normal levels, with only 9.6 million new housing units added in the past decade; compared to 15 to 16 million that would have been needed to meet our growing population and 20 million new job additions,” said Dr. Yun.

“Local zoning law changes, expanding construction worker training programs at trade schools and promoting the use of tax breaks for developers in the designated Opportunity Zones will all play an important role in assuring an adequate future supply of housing,” Dr. Yun opined. 

When it comes to leadership, not only is your “presence” important, but being present in the moment – with your team, with your partners, or with your organization – may mean the difference between effectiveness and mediocrity.

Mindfully present leaders are connected to more satisfied, more civil, and better performing employees.

Present is being in the moment, versus simply existing at the time. Are you spending more time with your head, or more time in experiencing?

We often recognize presence in other people with particular adjectives: like “real,” “authentic,” “deep,” or “meaningful.” Presence is an active effort to be in the here and now, and being present can help you to get more feedback and information to take the best decisions.

Naturally, being a better decision maker means becoming a better leader.

Focus here on the leadership behaviors of Doug Conant, a former CEO of Campbell Soup Company. His emphasis is on “touchpoints,” which represent opportunities to interact, influence, and lead people in pursuit of a common goal.

Those touchpoints are a reframing of regular interactions that we may seem as unimportant – the opportunities that exist to create a connection with the people you are leading. Touchpoints are made out of a leader, another party, and an issue.

His approach to leadership engages your head, heart and hands. Leaders identify the nature of the touchpoint (head), put the goals of the group ahead of their own (heart), and interact with confidence, tenacity, and effectiveness (hands).

This approach mirrors the experience of counseling and mentoring – where you have to be present in terms of mind, body, and emotions.

Basically effective leadership is “all in.”

As a CEO, Conant was well known for the time he invested in getting to know people and possessing a genuine interest in their lives. Over 30,000 handwritten letters of gratitude and encouragement are his paper trail as a leader. And judging by his excellent book (check it out here, friends), it really spoke to his legacy and effectiveness as a leader.

Other famous leaders who embody this approach may come from places many people wouldn’t expect. As the Governor of The Lonestar State (Texas, y’all!), George W. Bush was well known for roaming the basement of the capital and chatting with everyone, from housekeeping to executives, remembering names and personal details of all he met. This kind of genuine, passionate engagement of people was well received by those who worked with him and it made him beloved by those who worked under him.

Short and sweet, be “all-in” with your people. Just showing up to the office won’t cut it. Learn how to focus your mind, engage your heart, and put the hands to work – excellence begets excellence, and we need leaders who are earnestly interested in the lives of their teams, organizations, and partners.

NAR Midyear forecast

Last week at NAR’s annual REALTORS Legislative Meetings and Trade Expo (NAR Midyear) in Washington, key economic leaders took to the stage to forecast home sales for the coming year.

What to expect

NAR’s Chief Economist, Lawrence Yun, presented a midyear economic forecast. When it comes to existing homes, according to Yun’s report, the first quarter sales hit 5.62 million, the highest since 2006 and a 3.5 percent increase from last year. He said that these figures “exceeded expectations” and attributed the sales increase to “record highs” in the stock market, “16 million new jobs created since 2010… and rising consumer confidence.”

However, Yun also noted that the number of new homeowners remains somewhat suppressed.

That suppression is largely due to lack of listings in the low- and middle-market range. Pricing growth in many metropolitan areas has caused overall existing-home prices to rise by 5 percent, making many existing homes unaffordable to first time buyers and young families. “Prices are still rising too fast in many areas and are outpacing incomes,” Yun explained.

Low ownership rate

Unfortunately, new home construction may not make up for the difference. Yun explained that the “building industry’s ability to produce more single-family homes” was being thwarted by “limited lots, labor shortages, tight construction lending and higher lumber costs.” Yun predicts that 1.5 million new homes will need building, an increase in housing construction of 8.4 percent.

Yun believes that sales will increase when “there’s a meaningful bump in new and existing inventory.”

Yun was also joined onstage by Jonathan Spader of the Joint Center for Housing Studies at Harvard University. Spader added to Yun’s analysis of the low homeownership rate, adding that older adults are foreclosing, while younger homebuyers are delaying their purchase in hopes of an economic upturn. Nonetheless, he anticipates reaching over 60 percent homeownership by 2025, with increasing diverse family structures, races, and ethnicities represented amongst homeowners.

#NARCrystalBall