This January, 35-year real estate industry veteran Bill Brown will step into the role of 2017 president of the National Association of REALTORS® (NAR). A second-generation REALTOR® from Alamo, Calif., Brown is the founder of the Oakland-based commercial real estate firm Investment Properties, a division of the family real estate business founded by his father, William H. Brown, in 1964. In this exclusive interview, Brown shares a bit about his past, his take on the current state of real estate, and his outlook for the year ahead.
Maria Patterson: You grew up in a family real estate business. Did you always know that you would follow in your family’s path?
Bill Brown: Absolutely! My father worked very hard and as a result, his business flourished. It just made a lot of sense to continue the family legacy and hopefully, to innovate the business. After college, I was eager to join my father’s company. Not only was it the smart and logical thing to do, but also, I was genuinely excited to be part of the industry. Fast forward to today, my brother is in the business and we’re business partners in our investments.
MP: What were some of the most important lessons you learned about the business from your father?
BB: My father taught me the importance of developing long-term relationships by having high ethical standards and a good work ethic. He taught my brother and me to counsel a client to walk away from a deal if it wasn’t right, and to think about doing deals with that client not just for today, but for the next 20 years. If you make your clients happy, they’ll always be faithful to you.
MP: Why have you chosen to focus on the commercial investment side of the real estate business?
BB: I was attracted to the apartment business early in my career. I have always been a numbers kind-of guy, and that side of business really appealed to me—I’m good at it. Being able to work with residential buyers and sellers is a real talent. I was reminded of this when my wife and I decided to buy a new home this year. I have tremendous respect for residential practitioners.
MP: What are some of the biggest challenges REALTORS® are currently facing?
BB: Residentially, limited inventory and the challenge of obtaining financing. On the investment side, issues like rent control, and inclusionary zoning on the local level. NAR members also must be aware that the legislative threats to our industry are no longer solely focused on Washington, D.C. States and local municipalities are introducing short-term solutions which are punitive long term. We must stay diligent on all three levels of government. Their decisions will affect your business.
MP: What are your thoughts upon assuming the role of NAR president for 2017?
BB: I am excited and ready to go. I feel confident in my ability because I am surrounded and supported by an incredible Enlarged Leadership Team. Each and every one of the talented men and women on the 2017 team brings a unique quality and talent to the group. There is a revolution brewing on almost every level of organized real estate. Be it legislative, MLS, or market-driven, our members are going to challenge us to make a difference within our industry. The Leadership Team and I are up for this challenge!
MP: In your opinion, what have been some of the most significant changes to the real estate business over the course of your career?
BB: Technology, specifically consumers’ access to the internet, has launched real estate into a new era. Technology is in a constant state of evolution and it will continue to transform our industry. As REALTORS®, we must continue to adapt our business practices to serve tech-savvy buyers and sellers.
Another substantial difference I have seen over the course of my career deals with agent liability. More than ever before, agents are held responsible in terms of liability to a buyer. Disclosure agreements were not around when I first entered the business.
MP: In your opinion, what is the current state of the overall national real estate market? What are your predictions for housing in 2017?
BB: While there have been some ups and downs this year, home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a strong spring showing. However, many markets throughout the U.S. are dealing with affordability and low inventory issues despite steadily improving local job markets and mortgage rates teetering close to all-time lows. With homebuilding activity failing to keep up with demand, and not enough current homeowners choosing to put their home on the market, prices continued their ascent—and in many markets, at a rate well above income growth. For 2017, we can anticipate continued solid existing-homes sales and modest price growth of about 3 percent for median existing sales.
MP: What represents the greatest opportunity for real estate practitioners right now?
BB: On the residential side, even though inventory is low in some states, interest rates are still at historically low levels so it’s a great time to buy a house. Commercially, it’s also a great time to take advantage of low interest rates and above-normal rent growth in a lot of the commercial sectors.
MP: What will be the most pressing priorities during your term in office and why?
BB: I have identified four goals for 2017 that strongly support NAR’s mission and will help ensure that REALTORS® drive the revolution within our industry:
- The No. 1 goal for 2017 is improving homeownership. If we can improve the homeownership rate, which has fallen from almost 70 percent to 63 percent, we can open the door to the American Dream for more people, strengthen communities, and create more opportunities for our members.
- 2, we must protect the current tax status of residential real estate by continuing to allow homeowners to deduct mortgage interest and property taxes for both primary and secondary residences. Additionally, investors have to retain the ability to do 1031 tax deferred exchanges. There’s a good chance elimination of both residential and commercial provisions will be on the congressional agenda next year. REALTORS® must work together to safeguard these provisions. Our tax code must continue to reflect the values that make our nation so exceptional.
- 3, we must keep a federal role in the secondary mortgage market. Any attempt to eliminate it must be fought. Without a federal role in the GSEs and FHA-insured loans, there would be almost no capital available for mortgage lending.
- 4, REALTORS® must begin to think about their financial future. Twenty percent of our members don’t own their own home and only 32 percent own investment properties. We want to see all REALTORS® become financially solvent and independent. The National Association of REALTORS® recently launched a new course, Real Estate Investing: Build Wealth Representing Investors and Becoming One Yourself. This course is going to be a great tool to help REALTORS® help themselves.
MP: What are the biggest concerns of real estate consumers right now and how can real estate practitioners best address these concerns?
BB: Cost/affordability and the ability to secure a loan are major concerns for a lot of consumers. Also, in many markets throughout the U.S., inventory is low and scarcity of property has created fierce competition. In my market in Northern California, this is a huge problem.
MP: What are some of the most important programs NAR currently has/will be rolling out that will benefit REALTORS® and help them be more successful?
Coming soon is the roll-out of Project Upstream. Thanks to technology innovation from Realtors Property Resource® (RPR®), in 2015 NAR was selected as the partner for Project Upstream, a back-end data technology that creates a single data entry point and storage platform for real estate-related data that complies with industry standards, and ensures the quality and accessibility of data across the industry. Project Upstream is partnering with NAR for financial backing and Realtors Property Resource (RPR) for technology and data capabilities.
The benefits of Upstream—efficiency, control, risk management, and customer experience—all represent a major step forward in the real estate data space. With this initiative, NAR is positioned to lead the next phase of technology innovation in the real estate industry.
For more information, please visit www.realtor.org.
Maria Patterson is RISMedia’s executive editor. Email her your story ideas at email@example.com.
For the latest real estate news and trends, bookmark RISMedia.com.