Florida remained the top destination of foreign buyers purchasing U.S. residential real estate in 2017, with 22 percent of all foreign buyers who bought residential property in the United States. Florida Realtors® latest report, the 2017 Profile of International Residential Real Estate Activity in Florida, finds that international sales hit $24.2 billion this year, up from $19.4 billion in 2016.
The economic environment created a mix of opportunities and challenges for Florida’s foreign buyers in 2016 and 2017, according to the report’s analysts. Latin American countries faced political and economic difficulties and weaker currencies in the wake of the collapse in oil prices. Meanwhile, economic growth strengthened in Canada and the Canadian dollar stabilized against the U.S. dollar.
House prices rose in the United States, including in Florida, but the appreciation was modest compared to home price appreciation in Canada. Amid these challenges and opportunities, overall foreign buyer purchases of Florida residential property increased: the share of buyers from Canada rose, the share of buyers from Latin America and Europe declined and the share of buyers from Asia and Africa remained unchanged.
The report is based on an annual study done by the National Association of Realtors® (NAR) in cooperation with Florida Realtors. It presents information relating to residential transactions with international clients of Florida’s Realtors as well as information on U.S. clients seeking to purchase property abroad during the 12-month period of August 2016-July 2017. In this report, the year 2017 refers to the 12-month period August 2016–July 2017, and the year 2016 refers to the period August 2015–July 2016. A total of 6,551 Realtors responded to this year’s survey, conducted Aug. 7-Sept. 9, 2017.
The survey considers only residential purchases in the state.
Report highlights
Foreign purchases in the state increased to $24.2 billion, a $4.8 billion increase from 2016’s $19.4 billion.
Foreign transactions accounted for 21 percent of Florida’s residential dollar volume of sales, a 2 percent increase year-to-year. Nationally, foreign buyers comprised 10 percent of the dollar volume of existing sales.
Foreign buyers purchased 61,300 Florida properties (47,000 in 2016), which made up 15 percent of Florida’s residential market (12 percent in 2016). Nationally, foreign buyer residential purchases accounted for five percent of existing-home sales.
The median purchase price paid by foreign buyers increased to $259,400 ($252,500 in 2016), which was in line with the overall increase in Florida prices.
The median price paid by foreign buyers was 18 percent higher than the median price paid by all Florida buyers.
Nationalities of Florida’s foreign residential buyers
Latin American and Caribbean buyers accounted for the largest portion of Florida foreign buyers (34 percent), though this group made up 39 percent the previous year.
Canadian buyers increased to 22 percent (19 percent in 2016).
Other countries remained consistent year-to-year: The share of European buyers was unchanged at 23 percent; Asian buyers at 10 percent; and African buyers at one percent.
Most foreign buyers were concentrated in five metropolitan areas: Miami-Fort Lauderdale-West Palm Beach (53 percent); Orlando-Kissimmee-Sanford (11 percent); Tampa-St. Petersburg-Clearwater (nine percent); Cape Coral-Fort Myers (six percent); and North Point-Sarasota-Bradenton (five percent).
Transaction details
72 percent of foreign buyers made an all-cash purchase.
68 percent of foreign buyers purchased residential property for vacation, residential rental or for both uses (72 percent in 2016); 49 percent bought a townhouse or condominium (52 percent in 2016).
35 percent (40 percent in 2016) purchased in a central city/urban area; 15 percent purchased in a resort area (14 percent in 2016).
93 percent of foreign buyers visited Florida at least once before purchasing a property (92 percent in 2016).
Florida clients searching properties abroad
17 percent of Florida’s Realtors said they had a client seeking to purchase property abroad, up from 14 percent in 2016.
Top countries of interest from Florida residents looking elsewhere: Colombia, Costa Rica, Spain, Canada and the Dominican Republic.
75 percent were interested in residential property (79 percent in 2016).
75 percent intended to use the property for vacation, residential rental or both uses (84 percent in 2016).
Florida’s Realtors interaction with international clients
While international business rose, fewer Realtors in Florida (44 percent) said they worked with an international client in 2017 (48 percent in 2016).
61 percent of Realtors said they did not have cultural and language problems.
Personal contacts, previous clients and business contacts accounted for 72 percent of referrals or leads.
An agent’s firm, franchise website or social media was the primary source of online leads, followed by other aggregator websites and realtor.com®.
Respondents were evenly split about the outlook in the next 12 months: 43 percent expected the same or an increase in international clients, 42 percent expected a decrease, and 15 percent had no opinion.
56 percent expect foreign retirees to be potential clients.
Tuesday, February 27, 2018
Home Sellers Can Take Steps Now for a Great Spring Landscape
Thinking of selling a home in the spring? Then now is a good time to get in the yard and prepare the landscaping. Many home sellers focus on indoor projects and forget that the first thing potential buyers see is the home’s curb appeal – the landscaping and yard.
Fall is the best time to lay the groundwork for a springtime yard that will attract buyers, according to the Outdoor Power Equipment Institute. Attractive landscaping can help improve curb appeal, adding as much as 17 percent to the sale price of a home, studies show. To help homeowners prepare their yards, the Institute shares several tips:
Nurture healthy turf. Fall is the time to aerate the soil by punching holes in it so oxygen, water and nutrients can reach the grass roots. Continue mowing your lawn as needed throughout the fall.
Trim it short. For the last two cuttings of the year, lower your mower blade to its lowest setting so your grass gets a tighter cut. This will enable more sun to reach the crown of the grass – and you’ll see fewer brown leaves in your lawn. Be careful to leave one third of the grass blade in place.
Rake or collect the leaves. It may be tempting to wait until all the leaves fall off the trees before clearing them up, but don’t delay. Leaves on the ground block the grass from sunlight – suffocating your grass – and can also breed fungus. Remove the leaves, compost or mulch them, or dispose of them.
Load up on grass nutrients. Use a mulching mower to shred and return cut grass back to the lawn. You can also finely mulch your leaves and distribute them on your lawn. Shredded leaves can help control weeds and load your lawn with nutrients for a long winter.
Fix the bald spots. Fall is a good time to fix those bald spots in your lawn. Get a lawn repair mixture at your area garden shop and follow the directions.
Taking these steps can help boost your curb appeal with a healthy lawn in the spring.
Fall is the best time to lay the groundwork for a springtime yard that will attract buyers, according to the Outdoor Power Equipment Institute. Attractive landscaping can help improve curb appeal, adding as much as 17 percent to the sale price of a home, studies show. To help homeowners prepare their yards, the Institute shares several tips:
Nurture healthy turf. Fall is the time to aerate the soil by punching holes in it so oxygen, water and nutrients can reach the grass roots. Continue mowing your lawn as needed throughout the fall.
Trim it short. For the last two cuttings of the year, lower your mower blade to its lowest setting so your grass gets a tighter cut. This will enable more sun to reach the crown of the grass – and you’ll see fewer brown leaves in your lawn. Be careful to leave one third of the grass blade in place.
Rake or collect the leaves. It may be tempting to wait until all the leaves fall off the trees before clearing them up, but don’t delay. Leaves on the ground block the grass from sunlight – suffocating your grass – and can also breed fungus. Remove the leaves, compost or mulch them, or dispose of them.
Load up on grass nutrients. Use a mulching mower to shred and return cut grass back to the lawn. You can also finely mulch your leaves and distribute them on your lawn. Shredded leaves can help control weeds and load your lawn with nutrients for a long winter.
Fix the bald spots. Fall is a good time to fix those bald spots in your lawn. Get a lawn repair mixture at your area garden shop and follow the directions.
Taking these steps can help boost your curb appeal with a healthy lawn in the spring.
Thursday, February 22, 2018
Home sales, prices rose in all three SoFla counties in January: Florida Realtors
Miami-Dade had the strongest month with a 5.3% rise in resi sales...
New year, new South Florida? Home sales were up in Miami-Dade, Broward and Palm Beach counties at the start of 2018, according to new reports from the Florida Realtors. Median prices were also on the rise.
The higher sales figures follow a slow 2017. Despite an overall increase in residential dollar sales volume in South Florida’s three counties last year, the number of sales fell.
Miami-Dade
Residential sales posted the biggest overall increase in the tri-county region, rising 5.3 percent year-over-year to 1,820 closings in January. Single-family home sales lagged behind condo and townhouse sales, increasing only 2.1 percent to 875. Condo sales rose 8.1 percent to 945.
The median price for a house was $330,000 last month, up 6.5 percent from the previous year, and the median price for a condo was $230,000, an annual increase of about 3.5 percent.
Broward
In Broward, residential sales totaled 2,146 in January, up 3.67 percent year-over-year. The increase is thanks to a big leap in condo sales and a slight drop in single-family home closings. Condo and townhouse sales rose 7.8 percent to 1,167, while three fewer houses sold, a 0.3 percent decline to 979 closings.
The median price of a single family home increased 10.8 percent to $345,000, and the median price of a condo rose 8.8 percent to $156,000.
Palm Beach
The northernmost county experienced a smaller bump in residential sales in January. Closings increased only 1 percent to 2,014 due to a 3.8 percent drop in single-family home sales, which totaled 1,103 last month. Condos and townhouse sales lept 7.6 percent to 911 closings.
But home prices continued their steady rise. The median price for a single-family home in Palm Beach County was $325,000 in January, a 4.8 percent increase. The median price for a condo/townhouse was $170,000, up a whopping 13.3 percent.
Tags: home prices, home sales, Residential Real Estate
New year, new South Florida? Home sales were up in Miami-Dade, Broward and Palm Beach counties at the start of 2018, according to new reports from the Florida Realtors. Median prices were also on the rise.
The higher sales figures follow a slow 2017. Despite an overall increase in residential dollar sales volume in South Florida’s three counties last year, the number of sales fell.
Miami-Dade
Residential sales posted the biggest overall increase in the tri-county region, rising 5.3 percent year-over-year to 1,820 closings in January. Single-family home sales lagged behind condo and townhouse sales, increasing only 2.1 percent to 875. Condo sales rose 8.1 percent to 945.
The median price for a house was $330,000 last month, up 6.5 percent from the previous year, and the median price for a condo was $230,000, an annual increase of about 3.5 percent.
Broward
In Broward, residential sales totaled 2,146 in January, up 3.67 percent year-over-year. The increase is thanks to a big leap in condo sales and a slight drop in single-family home closings. Condo and townhouse sales rose 7.8 percent to 1,167, while three fewer houses sold, a 0.3 percent decline to 979 closings.
The median price of a single family home increased 10.8 percent to $345,000, and the median price of a condo rose 8.8 percent to $156,000.
Palm Beach
The northernmost county experienced a smaller bump in residential sales in January. Closings increased only 1 percent to 2,014 due to a 3.8 percent drop in single-family home sales, which totaled 1,103 last month. Condos and townhouse sales lept 7.6 percent to 911 closings.
But home prices continued their steady rise. The median price for a single-family home in Palm Beach County was $325,000 in January, a 4.8 percent increase. The median price for a condo/townhouse was $170,000, up a whopping 13.3 percent.
Tags: home prices, home sales, Residential Real Estate
Saturday, February 10, 2018
First phase of Jungle Island’s multimillion-dollar renovation to open this year
Jungle Island is getting back on track with its multimillion-dollar renovation after Hurricane Irma forced its closure in September.
The first phase, expected to cost $16 million, is underway and the park is projected to reopen in late spring with new attractions. ESJ Capital Partners paid $60 million for the property in April with major redevelopment plans.
Irma caused substantial damage to the 18.5-acre property, including knocking down a zipline tower under construction, according to the Miami Herald.
New attractions include an indoor trampoline park near the entrance, an outdoor skydiving wind tunnel, a beach restaurant, and a new children’s playground with interconnected tree houses.
In July, Jungle Island’s owners pulled their request for a 39-year lease extension and a deal allowing for the development of a $50 million hotel next to the Watson Island theme park after facing stiff opposition from nearby residents. [Miami Herald] – Amanda Rabines
The first phase, expected to cost $16 million, is underway and the park is projected to reopen in late spring with new attractions. ESJ Capital Partners paid $60 million for the property in April with major redevelopment plans.
Irma caused substantial damage to the 18.5-acre property, including knocking down a zipline tower under construction, according to the Miami Herald.
New attractions include an indoor trampoline park near the entrance, an outdoor skydiving wind tunnel, a beach restaurant, and a new children’s playground with interconnected tree houses.
In July, Jungle Island’s owners pulled their request for a 39-year lease extension and a deal allowing for the development of a $50 million hotel next to the Watson Island theme park after facing stiff opposition from nearby residents. [Miami Herald] – Amanda Rabines
Tuesday, January 2, 2018
How to achieve a price reduction in new luxury developments.
How to achieve a price reduction in new luxury developments? Obtaining it depends on the location of the property, the market cycle and other factors!
Regardless of the market, buyers or investors interested in buying a property in a new building always request some type of concession to close the deal. And almost always, a price cut is your main request, experts say.
About 99% of concession talks are based on prices. While developers may offer increased agent commissions or a package of furniture, buyers often do not care about those incentives too much. The number of developers willing to negotiate depends on many factors specific to each project, such as the city where it is located and how the project is doing in the market, how the developer financed the construction, and whether it is necessary to pay the lenders in a timely manner. specific and the supply or inventory of similar projects with units of similar price in the area.
Market factors drive price reduction trends. When you see concessions in a period of five to 10 years and track what developers are willing to compromise to close a deal, some specific trends of the city emerge based on the fluctuations of the local luxury market.
What is the right time to buy in a new development?
Each new development, regardless of the market, has a strategy to launch its sales and release inventory, whose details are dictated by who is developing the project, where it is located, how big it is, the price of the units, the target market and other factors.
For example, the sales team for a development of more than 500 units in downtown Miami could open a multimillion-dollar off-site sales office, with a full model unit, months before construction begins. The strategy could be to launch offering 15% of the inventory on building plans and increase prices at each subsequent launch until it is completed and all units are sold in two or three years. On the other hand, the sales team of a luxury boutique project could postpone the launch of sales until the building is finished so that potential buyers can enter the kitchens and bathrooms, see the spaces of recreation and experience the view. They can choose to launch some units at a time, in three or five stages, to maintain consumer interest. Regardless of these differences, developers and agents always publish the inventory of a new building in stages, each including some units of choice, for the same reason: Every time you have a lot of something, it is difficult to create urgency. Each phase should have something to drive traffic and be a small representation of the building itself.
In Miami, where there are many new luxury developments competing for the attention of buyers at this time, price cuts in the range of 3% to 8% are typical.
This represents a significant change from about five years ago, when new developments were moving at a feverish pace, and there was not enough inventory to meet the buyer's demand. That was a time when the developers did not negotiate at all. The current market is very different because of high inventory levels and the competitive landscape.
However, the new buildings designed by renowned architects that are being built in the most coveted locations, still stand firm in price and achieve sales speed. In nearby Sunny Isles Beach, where there is an oversupply of luxury inventory that is sold too slowly to the liking of many developers, substantial discounts on prices are common.
While the market is much better than it was in 2009, when there were massive defaults, inventory is sold so slowly that discounts of 15% to 20% are typical, and discounts of more than 30% are not out of the question. Two or three years ago, a 5% discount was more common, but that was when the sales momentum was better. "Some projects are practically selling all their inventory with discounts, because they have to pay their lender.
Meanwhile, in Boca Raton, Florida, north of Miami, e, in Boca Raton, Florida, north of Miami, the situation is more optimistic. An oceanfront building with high-end amenities, located in a country club community, is unique to the area, they have not had to negotiate much about the price. That includes purchases in which they have sold several condominiums to a buyer to create a giant-sized unit. In this case, the only people who got a "discount" were the buyers who entered first.
When a price concession is not possible, developers often offer other concessions to improve the deal and make the sale more attractive from a financial point of view, specifically in markets where buyers have a surplus of options. A developer who can not offer a price cut could offer to pay the stamp duty surcharge. Agents are also not immune to the temptation of an incentive aimed at attracting buyers, some developers in will increase the agent's typical commission from 3% to 4% to encourage them to bring more customers.
(Ref: https://www.mansionglobal.com/es/articles/80952-como-lograr-una-rebaja-de-precio-en-desarrollos-nuevos-de-lujo)
Regardless of the market, buyers or investors interested in buying a property in a new building always request some type of concession to close the deal. And almost always, a price cut is your main request, experts say.
About 99% of concession talks are based on prices. While developers may offer increased agent commissions or a package of furniture, buyers often do not care about those incentives too much. The number of developers willing to negotiate depends on many factors specific to each project, such as the city where it is located and how the project is doing in the market, how the developer financed the construction, and whether it is necessary to pay the lenders in a timely manner. specific and the supply or inventory of similar projects with units of similar price in the area.
Market factors drive price reduction trends. When you see concessions in a period of five to 10 years and track what developers are willing to compromise to close a deal, some specific trends of the city emerge based on the fluctuations of the local luxury market.
What is the right time to buy in a new development?
Each new development, regardless of the market, has a strategy to launch its sales and release inventory, whose details are dictated by who is developing the project, where it is located, how big it is, the price of the units, the target market and other factors.
For example, the sales team for a development of more than 500 units in downtown Miami could open a multimillion-dollar off-site sales office, with a full model unit, months before construction begins. The strategy could be to launch offering 15% of the inventory on building plans and increase prices at each subsequent launch until it is completed and all units are sold in two or three years. On the other hand, the sales team of a luxury boutique project could postpone the launch of sales until the building is finished so that potential buyers can enter the kitchens and bathrooms, see the spaces of recreation and experience the view. They can choose to launch some units at a time, in three or five stages, to maintain consumer interest. Regardless of these differences, developers and agents always publish the inventory of a new building in stages, each including some units of choice, for the same reason: Every time you have a lot of something, it is difficult to create urgency. Each phase should have something to drive traffic and be a small representation of the building itself.
In Miami, where there are many new luxury developments competing for the attention of buyers at this time, price cuts in the range of 3% to 8% are typical.
This represents a significant change from about five years ago, when new developments were moving at a feverish pace, and there was not enough inventory to meet the buyer's demand. That was a time when the developers did not negotiate at all. The current market is very different because of high inventory levels and the competitive landscape.
However, the new buildings designed by renowned architects that are being built in the most coveted locations, still stand firm in price and achieve sales speed. In nearby Sunny Isles Beach, where there is an oversupply of luxury inventory that is sold too slowly to the liking of many developers, substantial discounts on prices are common.
While the market is much better than it was in 2009, when there were massive defaults, inventory is sold so slowly that discounts of 15% to 20% are typical, and discounts of more than 30% are not out of the question. Two or three years ago, a 5% discount was more common, but that was when the sales momentum was better. "Some projects are practically selling all their inventory with discounts, because they have to pay their lender.
Meanwhile, in Boca Raton, Florida, north of Miami, e, in Boca Raton, Florida, north of Miami, the situation is more optimistic. An oceanfront building with high-end amenities, located in a country club community, is unique to the area, they have not had to negotiate much about the price. That includes purchases in which they have sold several condominiums to a buyer to create a giant-sized unit. In this case, the only people who got a "discount" were the buyers who entered first.
When a price concession is not possible, developers often offer other concessions to improve the deal and make the sale more attractive from a financial point of view, specifically in markets where buyers have a surplus of options. A developer who can not offer a price cut could offer to pay the stamp duty surcharge. Agents are also not immune to the temptation of an incentive aimed at attracting buyers, some developers in will increase the agent's typical commission from 3% to 4% to encourage them to bring more customers.
(Ref: https://www.mansionglobal.com/es/articles/80952-como-lograr-una-rebaja-de-precio-en-desarrollos-nuevos-de-lujo)
Saturday, December 16, 2017
Why Real Estate Industries in Miami and UAE are Embracing Bitcoin
The Miami real estate industry is gradually embracing Bitcoin as realtors realize the merits and advantages of utilizing the Bitcoin network to facilitate the transfer of large-scale transactions.
For many years, the Bitcoin community and experts within the cryptocurrency sector have debated the fundamental purpose of Bitcoin; whether it should operate more as a store of value or a digital cash system that is capable of processing small transactions with substantially low fees like Visa.
As of current, Bitcoin qualifies as both a store of value and a digital cash system. The integration of the Bitcoin Core development team’s transaction malleability and scaling solution Segregated Witness (SegWit) has significantly reduced Blockchain congestion within the Bitcoin network, decreasing the size of the Bitcoin mempool-the holding area for unconfirmed transactions-and the average Bitcoin block size. More to that, less than three percent of Bitcoin’s transactions are SegWit-enabled. As the ratio of SegWit-enabled transaction increase to over 50 percent, Bitcoin transactions will become even cheaper.
As a result, more merchants, investors and users have started to consider and adopt Bitcoin as a financial and a settlement network that is capable of processing both small and large transactions. Within the real estate industry, the majority of transactions or payments are in the millions. But, to process multi-million dollar transactions, banks require extremely high fees, sometimes up to thousands of dollars per transaction.
Several studies and research papers have revealed that Australian and US banks charge up to $4,000 for a $100,000 transaction. If the payment goes up to a few million dollars, the transaction fee will increase proportionally, potentially to $10,000.
In Bitcoin, such high fees can be avoided. Although transaction fees depend on the size of the transaction, it is possible to send a million dollar transaction with less than $10 with a SegWit-enabled wallet. More importantly, if the Bitcoin Blockchain network is less congested and the mempool size is small, it is possible for senders to attach even smaller fees to process the payment.
For realtors, the usage of Bitcoin significantly eases the process of facilitating large-scale payments. Not only do multi-million dollar bank wire transfers cost thousands of dollars and take weeks to sometimes months of processing time, they also require long paperwork and inefficient process of identity and financial verification.
Thus, Stephan Burke, member of the Master Brokers Forum, a network of real estate professionals in Miami, and realtor associate with Brown Harris Stevens wrote:
“It would seem that an industry like real estate, which already has a high comfort level with technology and the electronic exchange of large sums of money, will be a natural fit for Bitcoin in the coming years. In my opinion, some kind of serious regulation will be needed before Bitcoin hits Main Street. But I do believe that acceptance will happen sooner rather than later. The world changes extremely fast these days.”
For many years, the Bitcoin community and experts within the cryptocurrency sector have debated the fundamental purpose of Bitcoin; whether it should operate more as a store of value or a digital cash system that is capable of processing small transactions with substantially low fees like Visa.
As of current, Bitcoin qualifies as both a store of value and a digital cash system. The integration of the Bitcoin Core development team’s transaction malleability and scaling solution Segregated Witness (SegWit) has significantly reduced Blockchain congestion within the Bitcoin network, decreasing the size of the Bitcoin mempool-the holding area for unconfirmed transactions-and the average Bitcoin block size. More to that, less than three percent of Bitcoin’s transactions are SegWit-enabled. As the ratio of SegWit-enabled transaction increase to over 50 percent, Bitcoin transactions will become even cheaper.
As a result, more merchants, investors and users have started to consider and adopt Bitcoin as a financial and a settlement network that is capable of processing both small and large transactions. Within the real estate industry, the majority of transactions or payments are in the millions. But, to process multi-million dollar transactions, banks require extremely high fees, sometimes up to thousands of dollars per transaction.
Several studies and research papers have revealed that Australian and US banks charge up to $4,000 for a $100,000 transaction. If the payment goes up to a few million dollars, the transaction fee will increase proportionally, potentially to $10,000.
In Bitcoin, such high fees can be avoided. Although transaction fees depend on the size of the transaction, it is possible to send a million dollar transaction with less than $10 with a SegWit-enabled wallet. More importantly, if the Bitcoin Blockchain network is less congested and the mempool size is small, it is possible for senders to attach even smaller fees to process the payment.
For realtors, the usage of Bitcoin significantly eases the process of facilitating large-scale payments. Not only do multi-million dollar bank wire transfers cost thousands of dollars and take weeks to sometimes months of processing time, they also require long paperwork and inefficient process of identity and financial verification.
Thus, Stephan Burke, member of the Master Brokers Forum, a network of real estate professionals in Miami, and realtor associate with Brown Harris Stevens wrote:
“It would seem that an industry like real estate, which already has a high comfort level with technology and the electronic exchange of large sums of money, will be a natural fit for Bitcoin in the coming years. In my opinion, some kind of serious regulation will be needed before Bitcoin hits Main Street. But I do believe that acceptance will happen sooner rather than later. The world changes extremely fast these days.”
Thursday, December 14, 2017
Net neutrality repeal has real estate really worried
The Federal Communications Commission’s (FCC) vote to end Obama-era net neutrality protections could change the way consumers use the internet, and that may have a lasting effect on a real estate industry.
Today’s 3-2 vote under Republican Commissioner Chairman Ajit Pai — which fell along party lines — ends the 2015 Open Internet Order, which regulated the way internet service providers (ISPs) treated content. It required ISPs to treat all content equally and blocked the favoring of providing “fast lanes” for favored sites.
The FCC, in a statement, said they are “returning to the traditional light-touch framework that was in place until 2015.”
As part of the vote, oversight over internet regulations will shift from the FCC to the Federal Trade Commission. While the FCC is split with two Democrats and three Republicans — part of the organization’s bylaws allows for no more than three members of any political party — the FTC is made up of one Republican and one Democrat. Terrell Sweeney, the Democrat serving as a commissioner on the FTC, has already argued that her organization will not be able to save an open Internet.
What’s at stake for small businesses?
In the near term, Russ Cofano, a Washington state-based veteran of the real estate industry for over 25 years — most recently the president of eXp World Holdings, operator of real estate brokerage eXp Realty until this past summer — doesn’t believe much will change, but there’s mid- and long-term repercussions to consider.
“Real estate essentially is a business run by small business operators,” Cofano said. “The majority of real estate brokers are small businesses, individual agents are independent contractors and small businesses.”
He added: “The concern, among folks that are fighting against this repeal is that when you pit big business — that being broadband providers — against small business, big business wins in terms of usability, cost or both.”
At the very least, Cofano explained, repealing net neutrality could make it more expensive for smaller real estate operations to compete, but at the very worst, it could put people at a competitive disadvantage when working with consumers.
While it’s too early to see the shape of things to come, theoretically larger firms could work out deals to ensure speeds aren’t throttled on their sites, versus some of their smaller competitors. Berkshire Hathaway HomeServices, for example, could be at an advantage because it belongs to a multinational conglomerate that owns a small stake — less than one percent — in Verizon.
“It’s conceivable that could happen, but the repeal of the net neutrality rules are eliminating FCC regulation, but not antitrust,” Cofano explained.
“Would it be an antitrust violation to provide preference for big companies versus small companies?” Cofano added. “The answer is: we don’t know yet, but it’s scary. And lots of harm can happen while things go through the court system to determine if they were wrong in the first place.”
Threats to real estate tech
The repeal of net neutrality could also pose a threat to the thriving proptech industry. Roelof Opperman, an associate with Fifth Wall Ventures — a VC firm with companies like Opendoor, WiredScore, States Title and VTS in its portfolio — thinks it will impact startups with a direct-to-consumer business model, especially.
“Half of real estate technology is pure internet software as a service, delivered to consumers,” Opperman explained, using companies like Compass and Zillowas an example.
“Anytime there’s less regulation, and a telecommunications behemoth could throttle [speeds] based on what you’re paying them, that’s an issue,” he added. “It definitely hits innovation on the consumer end.”
A byproduct of the new lack of regulations could be that alternative internet networks become much more common, and access to those internet networks could become a new selling point for residential and commercial buildings.
“A lot of buildings are thinking about connectivity in a big way,” Opperman said. “Connectivity is basically the number one thing when people look for when moving into a new building or office.”
He added, “So I think it creates a really big opportunity for non-conventional networks such as dark fibre to brand themselves as ‘hey, we don’t do this.’” Dark fibre is a term referring to the extra cables and bandwidth that are laid down for broadband internet, which building owners may use to set up their own private, ultra-fast networks.
Like Cofano, Opperman admitted that there’s still a lot of unknown.
“We’ve just given all these massive telecommunications companies this power, and we’re not sure how they’re going to wield it,” he said.
Opperman thinks, if ISPs start to throttle speeds, they’ll go after bigger companies like YouTube and Netflix first, but eventually that will trickle down to small companies, which will obviously have an adverse impact in terms of cost and the services they provide to consumers.
“If you had two sites that were exactly the same or slightly differentiated, and one was much slower than the other, then why would you go to the other?” Opperman said.
The vote that ‘stacked the deck’
One of the companies backed by Fifth Wall Ventures is WiredScore, a startup that provides commercial real estate tenants with information about their building’s connectivity. The company’s CEO Arie Barendrecht believes the repeal of net neutrality will impact businesses like his own.
“We are a startup so we understand the hard work that goes into building a business,” he said. “Today’s ruling is a big loss for a lot of small businesses and an impediment to the growing innovation economy. The repeal of net neutrality just stacked the deck against smaller companies in favor of big business.”
John Gilbert, the chief operating officer and executive vice president at Rudin Management Company and also the co-chair of the Real Estate Board of New York’s (REBNY) Tech Committee also believes the repeal will have a negative impact on the growing proptech industry.
“Net neutrality has enhanced the creation of new companies offering digital solutions to real life problems,” he said. “Removing this foundational concept risks creating winners and losers based on a playing field that tilts against creative thought. This is an issue that deserves legislative debate.”
Racquel Russell, senior director, government relations and public affairs at Zillow — one of the nation’s largest online listing services, with $7.5 billion market cap — echoed Gilbert’s sentiments.
“The FCC’s changes to net neutrality create an unlevel playing field for consumers and small-business owners, including many of our real estate partners,” she said. “An open internet empowers consumers with information, helps small businesses grow and spurs innovation.”
The National Association of Realtors (NAR) has also been staunchly opposed to the repeal, on behalf of their 1.3 million members.
“The internet as we know it today is a fair and open platform that puts everyone on a level playing field,” said NAR President Elizabeth Mendenhall in a statement. “FCC’s rollback of the Open Internet Order will mean higher costs and slower service for millions of American consumers and businesses. Realtors have strong concerns about what that might mean for the way consumers search for homes online and real estate is transacted.”
Mendenhall pointed specifically to the small businesses that will be impacted by the repeal.
“The last thing small businesses need today is additional costs and competitive disadvantages that put them on the defensive,” she added. “This isn’t just an issue for Silicon Valley or large telecommunications shops. This is a main street concern that affects businesses and consumers across the country.
(https://www.inman.com/2017/12/14/net-neutrality-repeal-has-real-estate-really-worried/)
Today’s 3-2 vote under Republican Commissioner Chairman Ajit Pai — which fell along party lines — ends the 2015 Open Internet Order, which regulated the way internet service providers (ISPs) treated content. It required ISPs to treat all content equally and blocked the favoring of providing “fast lanes” for favored sites.
The FCC, in a statement, said they are “returning to the traditional light-touch framework that was in place until 2015.”
As part of the vote, oversight over internet regulations will shift from the FCC to the Federal Trade Commission. While the FCC is split with two Democrats and three Republicans — part of the organization’s bylaws allows for no more than three members of any political party — the FTC is made up of one Republican and one Democrat. Terrell Sweeney, the Democrat serving as a commissioner on the FTC, has already argued that her organization will not be able to save an open Internet.
What’s at stake for small businesses?
In the near term, Russ Cofano, a Washington state-based veteran of the real estate industry for over 25 years — most recently the president of eXp World Holdings, operator of real estate brokerage eXp Realty until this past summer — doesn’t believe much will change, but there’s mid- and long-term repercussions to consider.
“Real estate essentially is a business run by small business operators,” Cofano said. “The majority of real estate brokers are small businesses, individual agents are independent contractors and small businesses.”
He added: “The concern, among folks that are fighting against this repeal is that when you pit big business — that being broadband providers — against small business, big business wins in terms of usability, cost or both.”
At the very least, Cofano explained, repealing net neutrality could make it more expensive for smaller real estate operations to compete, but at the very worst, it could put people at a competitive disadvantage when working with consumers.
While it’s too early to see the shape of things to come, theoretically larger firms could work out deals to ensure speeds aren’t throttled on their sites, versus some of their smaller competitors. Berkshire Hathaway HomeServices, for example, could be at an advantage because it belongs to a multinational conglomerate that owns a small stake — less than one percent — in Verizon.
“It’s conceivable that could happen, but the repeal of the net neutrality rules are eliminating FCC regulation, but not antitrust,” Cofano explained.
“Would it be an antitrust violation to provide preference for big companies versus small companies?” Cofano added. “The answer is: we don’t know yet, but it’s scary. And lots of harm can happen while things go through the court system to determine if they were wrong in the first place.”
Threats to real estate tech
The repeal of net neutrality could also pose a threat to the thriving proptech industry. Roelof Opperman, an associate with Fifth Wall Ventures — a VC firm with companies like Opendoor, WiredScore, States Title and VTS in its portfolio — thinks it will impact startups with a direct-to-consumer business model, especially.
“Half of real estate technology is pure internet software as a service, delivered to consumers,” Opperman explained, using companies like Compass and Zillowas an example.
“Anytime there’s less regulation, and a telecommunications behemoth could throttle [speeds] based on what you’re paying them, that’s an issue,” he added. “It definitely hits innovation on the consumer end.”
A byproduct of the new lack of regulations could be that alternative internet networks become much more common, and access to those internet networks could become a new selling point for residential and commercial buildings.
“A lot of buildings are thinking about connectivity in a big way,” Opperman said. “Connectivity is basically the number one thing when people look for when moving into a new building or office.”
He added, “So I think it creates a really big opportunity for non-conventional networks such as dark fibre to brand themselves as ‘hey, we don’t do this.’” Dark fibre is a term referring to the extra cables and bandwidth that are laid down for broadband internet, which building owners may use to set up their own private, ultra-fast networks.
Like Cofano, Opperman admitted that there’s still a lot of unknown.
“We’ve just given all these massive telecommunications companies this power, and we’re not sure how they’re going to wield it,” he said.
Opperman thinks, if ISPs start to throttle speeds, they’ll go after bigger companies like YouTube and Netflix first, but eventually that will trickle down to small companies, which will obviously have an adverse impact in terms of cost and the services they provide to consumers.
“If you had two sites that were exactly the same or slightly differentiated, and one was much slower than the other, then why would you go to the other?” Opperman said.
The vote that ‘stacked the deck’
One of the companies backed by Fifth Wall Ventures is WiredScore, a startup that provides commercial real estate tenants with information about their building’s connectivity. The company’s CEO Arie Barendrecht believes the repeal of net neutrality will impact businesses like his own.
“We are a startup so we understand the hard work that goes into building a business,” he said. “Today’s ruling is a big loss for a lot of small businesses and an impediment to the growing innovation economy. The repeal of net neutrality just stacked the deck against smaller companies in favor of big business.”
John Gilbert, the chief operating officer and executive vice president at Rudin Management Company and also the co-chair of the Real Estate Board of New York’s (REBNY) Tech Committee also believes the repeal will have a negative impact on the growing proptech industry.
“Net neutrality has enhanced the creation of new companies offering digital solutions to real life problems,” he said. “Removing this foundational concept risks creating winners and losers based on a playing field that tilts against creative thought. This is an issue that deserves legislative debate.”
Racquel Russell, senior director, government relations and public affairs at Zillow — one of the nation’s largest online listing services, with $7.5 billion market cap — echoed Gilbert’s sentiments.
“The FCC’s changes to net neutrality create an unlevel playing field for consumers and small-business owners, including many of our real estate partners,” she said. “An open internet empowers consumers with information, helps small businesses grow and spurs innovation.”
The National Association of Realtors (NAR) has also been staunchly opposed to the repeal, on behalf of their 1.3 million members.
“The internet as we know it today is a fair and open platform that puts everyone on a level playing field,” said NAR President Elizabeth Mendenhall in a statement. “FCC’s rollback of the Open Internet Order will mean higher costs and slower service for millions of American consumers and businesses. Realtors have strong concerns about what that might mean for the way consumers search for homes online and real estate is transacted.”
Mendenhall pointed specifically to the small businesses that will be impacted by the repeal.
“The last thing small businesses need today is additional costs and competitive disadvantages that put them on the defensive,” she added. “This isn’t just an issue for Silicon Valley or large telecommunications shops. This is a main street concern that affects businesses and consumers across the country.
(https://www.inman.com/2017/12/14/net-neutrality-repeal-has-real-estate-really-worried/)
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