NAR Lawsuit Update

On Tuesday, October 31, a jury found that the National Association of REALTORS® (NAR) and brokerage co-defendants were liable in the case of Burnett v. NAR et al.

Though the lawsuit is far from over, NYSAR believes it is important to stay updated on the latest information from our national association. The most common question the NYSAR Legal Hotline is receiving is, “what immediate impact does this ruling have?” NAR guidance is that there is no immediate change to the current commission structure.

Below is a statement from NAR President Tracy Kasper as well as guidance provided by NAR.

This matter is not close to being final. NAR plans to appeal the liability finding because the association stands by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition. NAR remains optimistic that they will ultimately prevail. In the interim, they will ask the court to reduce the damages awarded by the jury.

In court, NAR presented evidence that consumers are better off and business competition is able to thrive because of their rules and how well local MLS broker marketplaces function. In fact, the NAR cooperative compensation rule for local MLS broker marketplaces ensures efficient, transparent and equitable marketplaces where sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. NAR also presented that REALTORS® are everyday working Americans who are experts at helping consumers navigate the complexities of home purchases and advocates for fair housing and wealth building for all.

NAR was formed 100 years ago because there was a need for a higher level of ethical practice. NAR’s mission is to advocate for homeownership and always put client interests first. Tracy would like to recognize NAR’s legal team and outside counsel, who have worked tirelessly on the case. NAR anticipates that it will likely be several years before a conclusion is reached.

Tracy is also grateful to NAR staff and the association’s 1.5 million members, who work to serve their clients every day. “We have an important shared purpose for consumers, and we could not achieve that without all that each of us do,” she said. “We will continue to keep you informed of any notable litigation milestones, and in the meantime, I encourage you to continue to refer to the Competition.Realtor website, which provides a comprehensive overview of and many resources for how REALTORS® and local MLS broker marketplaces benefit consumers. The need for each of us and every member to continue to express our value every day in as many ways as we can remains an imperative.”

NYSAR will provide any further updates to its membership via email and on the association website. Also, stay up-to-date with the latest information in the NAR Member Portal.

BURNETT QUESTIONS ANSWERED

What are next steps legally and the timing?
This matter is not close to being final as NAR will appeal the jury’s verdict and remains confident they will ultimately prevail. In the interim, NAR will ask the court to reduce the damages awarded by the jury. Due to the nature of appeals, this case likely will not be concluded for several years.What will be the basis for NAR’s appeal?
NAR cannot speak to the specifics of that until they file their appeal, but they can say that they have a very strong legal basis for appeal.

Is there anything REALTORS®, brokers, state/local associations or MLSs need to do differently because of this verdict?
For many years, NAR has emphasized two important things. One is the use of buyer representation agreements, which maximize transparency by putting all agreements in writing to ensure clarity and understanding, as all members are obligated to do pursuant to the NAR Code of Ethics. These agreements formalize the professional working relationship with clients and detail what services consumers are entitled to and what the buyer agent expects from their client in return. Second, it’s also an imperative for members to continue to express that commissions are negotiable and set between brokers and their clients; explain how local MLS broker marketplaces promote equity, transparency and market-driven pricing for consumers; and persistently communicate the incredible value agents who are REALTORS® provide.

What does the future of buyer representation look like as a result of the verdict?
This verdict does not require a change in the rules, but if class action attorneys had it their way, buyer representation would be very much at risk because many first-time home buyers, among others, couldn’t afford to pay for representation out of pocket. It’s important that members take every opportunity to express how they are experts who guide consumers through the financial, legal and community complexities of buying or selling a home.

Does NAR have the funds to pay the proposed damages or post a bond to file an appeal?
NAR is going to appeal and has the funds to post bond, which allows them to proceed with their appeals and defer potential payment of damages. While appeals will take years, they are confident they will ultimately prevail and are financially prepared for any final judgment.
How does this verdict affect other ongoing litigation, including the other seller lawsuit?
It doesn’t. Cases are tried separately, and NAR remains confident they will ultimately prevail because they have a strong case that they will present on appeal and because their rules are pro-consumer and pro-business competitive.

Is there any scenario where NAR would consider settling?
NAR always has been open to a resolution that maintains a way for buyers and sellers to continue to benefit from the cooperation of real estate professionals and eliminates our members’ risk of liability for the claims alleged. That being said, NAR remains confident they will prevail on their appeal.

Would NAR ever consider changing the cooperative compensation rule?
This rule always has been in place to protect and serve the best interests of consumers, support market-driven pricing and advance business competition. NAR consistently reviews and considers evolving its rules in a way that responds to changes in the industry and what best serves consumers.

Do you expect the plaintiffs to seek an injunction that would require NAR to stop making the rule mandatory or eliminate the rule altogether?
NAR cannot predict what the plaintiffs will do. They would contest any such effort because this rule always has been in place to protect and serve the best interests of consumers, support market-driven pricing and advance business competition.

What’s the status with the Department of Justice and has anything changed with this verdict?
NAR reached an agreement with the DOJ nearly two years ago. NAR has upheld their end of the agreement, and they expect the DOJ to do the same as affirmed by a federal court’s careful ruling. That is a separate matter from the case of Burnett v. NAR et al.

If you have additional questions regarding the NAR lawsuit, please call the NYSAR Legal Hotline at (518) 436-9727, which is available Monday-Friday from 9:00 a.m.-4:00 p.m.

REALTOR® Call for Action – Tell Congress to Extend NFIP past Nov. 17 deadline

Following REALTOR^® advocacy efforts, Congress passed a last-minute spending agreement on September 30 to avert a government shutdown and extend the authority of the National Flood Insurance Program (NFIP). The agreement only funds the government through November 17, where Congress will have to come to another spending agreement. The NFIP has now been extended 25 times since 2017, showing the need for a longer-term solution, which NAR supports. Take Action Now to urge Congress to avoid any lapse in November.

Mortgage rates surge, slowing New York housing market in September

Albany, NY – October 19, 2023 – Mortgage rates reached their highest point in over two decades while inventory continues to dwindle across the Empire State, according to the housing report released today by the New York State Association of REALTORS®.

Inventory of homes for sale dipped 24 percent across the state, from 38,082 homes in September 2022 to just 28,943 units available last month. This marks the 47^th consecutive month in year-over-year comparisons of shrinking inventory.

Interest rates finished September at 7.31 percent on a 30-year fixed-rate mortgage, according to Freddie Mac. This is the highest level since the year 2000. For the month, the average on a 30-year fixed rate mortgage rose from a 7.07 percent average in August to 7.20 percent in September.

Closed sales fell to just 9,564 homes in September 2023. This marks a 22.5 percent decrease from the 12,335 sales in September 2022. Pending sales were also down, falling 8.1 percent from 10,049 homes last year to 9,232 units pending in September 2023. New listings fell as well, from 14,017 listings in September 2022 to 12,592 last month. This represents a 10.2 percent decline in year-over-year comparisons.

The median sales price of homes jumped 6.8 percent in September – from $365,000 in 2022 to $390,000 in 2023.

Additional data is available at http://www.nysar.com/industry-resources/market-data.

Deadling for Leadership Academy 7 applications approaching

Applications for NYSAR’s Leadership Academy 7 are now being accepted! The New York State Association of REALTORS^® Leadership Academy identifies, educates, and inspires future leaders in a professional, supportive environment. Below are the 2024 Leadership Academy dates. Times are still to be determined.

Dates: Locations TBD

Feb 26-28, 2024
April 7-9, 2024
June 9-11, 2024
August 4-6, 2024
September 27-29, 2024

Application Deadline: October 13, 2023

Interviews: October 24 and 25, 2023

Apply for Leadership Academy 7 HERE.

Legislation adds questions to PCDS form

On Friday, September 22, Governor Kathy Hochul signed into law a bill that will help consumers make informed choices when purchasing a home in New York. Chapter 484 of the Laws of 2023, adds seven questions to the Property Condition Disclosure Statement (PCDS) related to the property’s flood status and experience. The legislation removes the option in current law for the buyer of residential real property to receive a $500 credit in lieu of receiving the completed PCDS. The new law will go into effect on March 20, 2024.

The new law, Chapter 484 of the Laws of 2023, does not change the role or responsibility of the real estate licensees regarding the PCDS. NYSAR will provide further guidance for its members prior to the law taking effect.

Surging mortgage rates, low inventory continue to slow New York housing market

Albany, NY – September 21, 2023 – Inventory of homes available across New York State shrunk once again as mortgage rates surged to a two-decade high in August, according to the housing report released today by the New York State Association of REALTORS®.

Inventory of homes for sale across the Empire State fell for the 46^th consecutive month in year-over-year comparisons. In August 2023, there were 27,686 homes available in New York, compared to 37,865 units available last August. This represents a 26.9 percent decline.

Interest rates hit their highest point last month in over 20 years, according to Freddie Mac. The monthly average on a 30-year fixed rate mortgage rose from 6.84 percent in July, to 7.07 percent in August. This represents the highest monthly average since December 2001, when the monthly average was also 7.07 percent.

Closed sales across New York fell from 13,922 homes in August 2022 to just 11,310 last month, marking an 18.8 percent decline. New listings were also down, falling 10.3 percent from 14,863 units last August to 13,331 homes in August 2023. Pending sales dropped 11.4 percent in August as well – from 12,218 last year to just 10,826 sales in 2023.

The median sales price of homes inched higher from $392,620 last August to $411,500 in August 2023 representing a 4.8 percent increase in year-over-year comparisons.

Additional data is available at http://www.nysar.com/industry-resources/market-data.

NYSAR Meeting Planner is now NYSAR Connect

NYSAR Connect, formerly NYSAR Meeting Planner, is the central location for meeting dates and times, supporting documents, and Zoom meeting links. NYSAR Connect allows you to plan your schedule, view Zoom links, meeting agendas and more. Desktop users click here!

NYSAR Connect is also available as a NEW app in the Apple Play Store and Google Store to manage the meetings at your fingertips!! Just download it and go!

If you have an iPhone, please search “NYSAR Connect” in the App Store or download the NYSAR Connect app by clicking here.

Android users can search “NYSAR Connect” in the Google Play Store or download the NYSAR Connect app by clicking here.

(Login credentials are the same as your login information for NYSAR.com.)

New York home inventory, sales drop amidst escalating mortgage rates

Albany, NY – August 22, 2023 – Mortgage rates continued to climb in August, nearing seven percent, while the inventory of homes across New York State continued to drop to near record lows, according to the housing report released today by the New York State Association of REALTORS®.

Interest rates continued their upward trajectory in August, according to Freddie Mac. The monthly average on a 30-year fixed rate mortgage jumped up from 6.71 percent in June 2023 to an average of 6.84 percent last month. A year ago, at this time, the average monthly rate was 5.41 percent.

Inventory of homes for sale across the Empire State fell from 38,969 homes in July 2022 to just 27,911 units last month, representing a 28.4 percent decline. This marks 45 consecutive months that the number of homes available has fallen in year-over-year comparisons.

Closed sales fell 24.9 percent – from 12,487 in July 2022 to just 9,381 homes in July 2023. Pending sales were also down, falling to 10,326 units. This marks a 10.8 percent drop from the 11,572 pending sales in July 2022 in year-over-year comparisons. New listings also declined, dipping 18.6 percent from 16,366 listings in July 2022 to only 13,320 homes on the market last month.

Median sales prices remained comparable to 2022, falling two percent from $408,000 last July to $400,000 in July 2023.

Data and analysis compiled for the New York State Association of REALTORS^® by Showing Time Inc.

New York housing market remains cool as low inventory and higher borrowing costs persist

Albany, NY – July 20, 2023 – Despite the heat of the summer months, the New York housing market remains cooler than usual for this time of year due to a combination of continued low inventory and higher borrowing costs, according to the housing report released today by the New York State Association of REALTORS®.

Inventory of homes for sale across the state fell from 42,286 homes in June 2022 to just 31,605 units last month, representing a 25.3 percent decline. This marks 44 consecutive months that the number of homes available has fallen in year-over-year comparisons.

Interest rates again rose slightly in June, according to Freddie Mac. The monthly average on a 30-year fixed rate mortgage bumped up from a monthly average of 6.43 percent in May 2023 to a 6.71 percent monthly average last month.

Closed sales dropped 22.2 percent in June – from 13,095 sales in June 2022 to 10,186 units in June 2023. Pending sales were also on the decline, falling 6.2 percent in year-over-year comparisons from 12,967 in June 2022 to 12,166 last month. New listings of homes also fell, dropping to just 15,019 listings in June 2023, representing a 25.8 percent decline from the 20,238 listings in June 2022.

Median sales prices remained comparable to 2022, escalating just 0.2 percent from $425,000 in last June to $426,001 in June 2023.

Data and analysis compiled for the New York State Association of REALTORS^® by Showing Time Inc.

Governor Hochul signs Executive Order on Housing

After not being able to come to an agreement with the state legislature last month, Gov. Kathy Hochul took action yesterday, issuing Executive Order No. 30, aimed at addressing the housing crisis in New York State. The actions that promote housing growth include:

Declaring an Executive Order establishing priority in certain discretionary funding programs for localities across the state that comply with a new “Pro-Housing Community” certification process;
Creating a program to advance residential projects halted by the expiration of 421-a that include affordable housing; limited to the Gowanus rezoning area in Brooklyn;
Requiring all state entities to identify the potential for state-owned lands to support housing;
Recent and forthcoming regulatory initiatives to identify opportunities for greater efficiencies to promote housing growth;
Launching of the beta version of a new, interactive portal to collect and share community-level housing and zoning data and information.

Effective June 14, 2023 an amended PCDS must be used by all licensees

The PCDS has been amended to include language disclosing the presence of “indoor mold”. Some language was included in the “Environmental” section to include “indoor mold” and a new question 19-a was added to ask about “indoor mold” (see question below).

19-a. HAS THE PROPERTY BEEN TESTED FOR INDOOR MOLD? YES NO UNKN (IF YES, ATTACH A COPY OF THE REPORT)

According to the memo that accompanied the legislation, “Indoor mold has been referred to as “killer mold”, this is because the health risks associated with certain types of mold are tremendous. Inhalation of a wide variety of fungi can lead to or exacerbate existing allergies. Mold has also been found to cause toxic effects or infections. The public needs to be aware that indoor mold is a threat and what to do to clean up indoor mold if found on their property. The history of mold must be disclosed in order to prevent further mold growth. Health risks are increased in property where indoor mold is hidden or not identified as dangerous.”

The new PCDS form was published by the DOS and can be downloaded HERE.

Sales prices drop but inventory shortage remains across New York

Albany, NY – June 22, 2023 – Home prices inched lower across New York State in May while inventory continues to decline in year-over-year comparisons, according to the housing report released today by the New York State Association of REALTORS®.

Inventory of homes in the Empire State fell 16.4 percent in May from 38,939 units available in May 2022 to just 32,535 homes on the market last month. This marks 43 consecutive months that the number of homes available has fallen in year-over-year comparisons.

Closed sales fell from 11,075 homes last May to only 8,819 sales in May 2023, marking a 20.4 percent decline. Pending sales dipped 4.1 percent from 13,017 homes in May 2022 to 12,483 units last month. New listings of homes fell 18.4 percent in year-over-year comparisons, from 19,040 homes last May to just 15,540 listings in May 2023.

Good news for home buyers as the median sales price of homes fell slightly from $410,000 in May 2023 to $400,000 last month, representing a 2.4 percent decrease.

Interest rates rose slightly in May, starting May at 6.39 percent on a 30-year fixed-rate mortgage, but ended the month at 6.57 percent. According to Freddie Mac, the monthly average on a 30-year fixed-rate mortgage in May settled in at 6.43 percent – slightly up from the 6.34 percent average in April.

Additional data is available at http://www.nysar.com/industry-resources/market-data.