A landmark settlement is shaking up the real estate industry.Last week, the National Association of Realtors settled multiple lawsuits, agreeing to do away with decadeslong policies that set agent commissions.NAR agreed to pay $418 million in damages, effectively ending the standard 6% commission.”They were focused on sellers and buyers not understanding who’s being compensated in a transaction,” Mike Ruzicka, the president of the Greater Milwaukee Association of Realtors, explained.He said practices in other states vary greatly from real estate transactions in Wisconsin.”The state takes a great deal of effort in making sure consumers know what’s going on in a transaction,” Ruzicka said.There are two main new provisions of the settlement.The NAR can no longer require a broker listing a home on the MLS to offer any upfront compensation to the buyer’s agent.Also, agents must enter into a written agreement, including a negotiated commission and fees, with the homebuyer.We asked a Marquette University Law professor who specializes in property if this means lower home prices.”In the short term, no. What drives the real estate market currently is lack of supply,” Kali Murray said.”It’s not going to impact home prices at all. Prices are determined by buyer and seller, when they agree on the price,” Ruzicka added.Both experts say whether you’re looking to buy or sell, you need to pick the right person to help.”I would talk to more than one buyer agent,” Murray said.”Contact an expert that knows what they’re talking about when you want to sell or buy a house,” Ruzicka said.
A landmark settlement is shaking up the real estate industry.
Last week, the National Association of Realtors settled multiple lawsuits, agreeing to do away with decadeslong policies that set agent commissions.
NAR agreed to pay $418 million in damages, effectively ending the standard 6% commission.
“They were focused on sellers and buyers not understanding who’s being compensated in a transaction,” Mike Ruzicka, the president of the Greater Milwaukee Association of Realtors, explained.
He said practices in other states vary greatly from real estate transactions in Wisconsin.
“The state takes a great deal of effort in making sure consumers know what’s going on in a transaction,” Ruzicka said.
There are two main new provisions of the settlement.
The NAR can no longer require a broker listing a home on the MLS to offer any upfront compensation to the buyer’s agent.
Also, agents must enter into a written agreement, including a negotiated commission and fees, with the homebuyer.
We asked a Marquette University Law professor who specializes in property if this means lower home prices.
“In the short term, no. What drives the real estate market currently is lack of supply,” Kali Murray said.
“It’s not going to impact home prices at all. Prices are determined by buyer and seller, when they agree on the price,” Ruzicka added.
Both experts say whether you’re looking to buy or sell, you need to pick the right person to help.
“I would talk to more than one buyer agent,” Murray said.
“Contact an expert that knows what they’re talking about when you want to sell or buy a house,” Ruzicka said.
The US housing market gained a huge $2 trillion over the last year, amid a historic shortage of homes for sale.
The average home rose more than $20,000 and is now valued at $495,183 as of December 2023, up from $474,740 a year earlier.
According to Redfin analysis of more than 90 million homes across the country, the total value of US residential real estate increased 5.3 percent from a year earlier to $47.5 trillion in December.
While soaring mortgage rates mean housing demand is sluggish, home values continue to rise, pricing many Americans out of the market.
In the last two years, the housing market has gained $5.6 trillion, Redfin found.
However a disparity remains across the US. While affordable East Coast and Midwest metros saw the biggest rise in home values in the last year, so-called pandemic ‘boomtowns’ have seen the largest decline.
The average home rose more than $20,000 and is now valued at $495,183 as of December 2023. The biggest rises were on the east coast of America
Scroll down for the full list of metros with the biggest price rises.
According to Redfin, there are three major reasons why home values are continuing to rise.
Many homeowners are locked into ultra-low mortgage rates from previous years, meaning they are hesitant to put their houses on the market.
With supply tighter than demand, buyers are competing for a limited pool of homes. That is propping up values for both properties that are already for sale, and those that could hit the market in the future.
The total value of US homes was nearing a trough at the end of 2022, which is part of the reason year-over-year growth at the end of 2023 was so large, it added.
It is typical for home values to cool in the winter, but they experienced an abnormally large slowdown in 2022 as the shock of surging mortgage rates sent a freeze through the housing market.
While America grapples with a housing shortage, it is also continuing to build homes, which contributed to the gain in total home values last year, Redfin said.
Home values in Newark, New Jersey, saw the biggest gain in value in the year to December 2023 – increasing by 12.8 percent to $359.6 billion.
Next come two other East Coast metros, New Haven, Connecticut, and Camden, New Jersey. Homes in New Haven gained 11.9 percent in value to $86.5 billion, while properties in Camden went up by 10.8 percent to $153 billion.
Home values in Newark, New Jersey , saw the biggest gain in value in the year to December 2023 – increasing by 12.8 percent to $359.6 billion
Fixed 30-year mortgage rates are now hovering around 6.9 percent, according to Government-backed lender Freddie Mac
Charleston, South Carolina, ranked fourth – with values increasing by 10.8 percent to $188.5 billion.
Next are three Midwestern metros, Elgin, Illinois, Grand Rapids, Michigan and Milwaukee, Wisconsin.
Places like Newark and Camden are likely seeing home values jump in part because they are attracting demand from people who are priced out of New York and can now work remotely, Redfin said.
Midwestern metros like Milwaukee and Grand Rapids are experiencing home value gains for a similar reason.
They are affordable, and when mortgage rates and home prices are elevated, demand for affordable homes goes up.
‘America’s homeowners are sitting pretty. They’re holding a massive amount of housing wealth, despite lackluster demand from buyers, because home values skyrocketed during the pandemic and now a supply shortage is preventing those values from falling,’ said Redfin economics research lead Chen Zhao.
‘Prospective buyers aren’t as lucky. The combination of elevated mortgage rates, high home prices and a limited pool of homes for sale means homeownership is about as unaffordable as ever.’
But not every homeowner has seen their property increase in value.
‘Home values skyrocketed during the pandemic and now a supply shortage is preventing those values from falling,’ said Redfin economics research lead Chen Zhao
Four metros saw declines in overall home value, according to Redfin.
Pandemic ‘boomtown’ Boise, in Idaho, saw prices decline 3.8 percent to a total of $123.9 billion and New York saw prices fall 1 percent to $2.4 trillion.
New Orleans prices went down 0.8 percent to $124 billion and homes in Stockton, California, lost 0.7 percent in value – falling to a total of $109.2 billion in value.
The metros with the smallest increases were Philadelphia, at 0.3 percent, Honolulu, at 0.8 percent, Austin, Texas, at 1 percent, Denver at 1.3 percent and Riverside, California at 1.6 percent.
Most of these metros have something in common, said Redfin, which is that they have become unaffordable for many homebuyers. This means that there is a cap on demand, so home values no longer have much, if any, room to rise.
New York, Honolulu, Riverside and Denver all have median home sale prices of at least $550,000 – well above the national median.
And in Boise and Austin, which also have median sale prices above the national level, many people are priced out because an influx of out-of-towners caused home values to skyrocket during the pandemic.
But some experts predict that there will be a shift in the housing market in some parts of the US in 2024, driven by a surge in Baby Boomers downsizing into smaller properties.
Analyst Meredith Whitney, who is known as the ‘Oracle of Wall Street’ after she correctly predicted the 2008 financial crash, said house prices in some states will fall this year.
So-called pandemic ‘boomtown’ Boise, Idaho, saw prices decline 3.8 percent to a total of $123.9 billion in December 2023 – the most of any metro
Analyst Meredith Whitney, who is known as the ‘Oracle of Wall Street’, said house prices in some states will fall this year
This, in turn, will free up inventory and bring costs down for first-time buyers.
Whitney said homes in New York, New Jersey and Ohio will see a fall in prices. By comparison, homes in Texas, Tennessee and Utah will remain strong, she said.
She told DailyMail.com: ‘Around 90 percent of housing stock is owned by over 40s while 74 percent is by those over 50.
‘It makes logical sense that lots of these owners will start to downsize in the next decade. That’s almost 35 million homes – it’s a huge number to go through the system.
‘My advice to homeowners is: if you want to sell, you’re better off doing it sooner than later.’
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Consultants hired by the Wisconsin Supreme Court to examine six proposed maps redrawing state legislative districts said Thursday that maps submitted by the Republican Legislature and a conservative law firm are partisan gerrymanders, but they stopped short of declaring the other four constitutional. Only the court can make the determination of whether any of those four plans from Democratic Gov. Tony Evers, Democratic lawmakers and others are constitutional, wrote Jonathan Cervas, of Carnegie Mellon University in Pittsburgh, and Bernard Grofman, of the University of California, Irvine. Any of those maps could be improved based on criteria the court identified as being important including political neutrality, compactness, contiguity and preserving communities of interest, the consultants wrote.They declined to draw their own maps, but said they could do so quickly if the court instructed them to.The political stakes are huge in the battleground state where Republicans have had a firm grip on the Legislature since 2011 even as Democrats have won statewide elections, including for governor in 2018 and 2022. Four of the past six presidential victors in Wisconsin have been decided by less than a percentage point. Under maps first enacted by Republicans in 2011, and then again in 2022 with few changes, the GOP has increased its hold on the Legislature, largely blocking major policy initiatives of Evers and Democratic lawmakers for the past five years. The victory last year by a liberal candidate for Wisconsin Supreme Court, who called the current Republican maps “rigged,” cleared the path for the court’s ruling in December that the maps are unconstitutional because districts are not contiguous as required by law. The court ordered new maps with contiguous districts, but also said they must not favor one party over another. Republicans have indicated that they plan an appeal to the U.S. Supreme Court, arguing due process violations, but it’s not clear when that would come. The consultants reviewed proposed maps submitted by Evers, fellow Democrats, Republicans, academics and others that would reduce the Republican majorities that sit at 64-35 in the Assembly and 22-10 in the Senate. The consultants on Thursday called the maps from the Legislature and the conservative Wisconsin Institute for Law and Liberty “partisan gerrymanders.” The Legislature’s map was virtually unchanged from what the current boundaries are.”The other four submitted plans are similar on most criteria,” Cervas and Grofman wrote. They said those plans, from a “social science point of view,” are “nearly indistinguishable.”It ultimately will be up to the Wisconsin Supreme Court, with a 4-3 liberal majority, to decide which maps to enact. The state elections commission has said that must be done by March 15 to meet deadlines for candidates running in the fall. Evers on Tuesday vetoed a last-ditch effort by Republicans to enact new lines to avoid the court ordering maps. Republicans largely adopted the Evers maps but moved some lines to reduce the number of GOP incumbents who would have to face one another in the new districts. Evers rejected it, calling it another attempt by Republicans to gerrymander the districts in their favor. Under most of the newly proposed maps, Republicans would retain their majorities in the Legislature, but the margin would be significantly tightened, judging by an analysis by a Marquette University researcher. The Wisconsin Supreme Court has also been asked by Democrats to take up a challenge to the state’s congressional district lines. That lawsuit argues the court’s decision to order new state legislative maps opens the door to challenging the congressional map. Republicans hold five of the state’s eight congressional seats. The moves in Wisconsin come as litigation continues in more than dozen states over U.S. House and state legislative districts that were enacted after the 2020 census .
Consultants hired by the Wisconsin Supreme Court to examine six proposed maps redrawing state legislative districts said Thursday that maps submitted by the Republican Legislature and a conservative law firm are partisan gerrymanders, but they stopped short of declaring the other four constitutional.
Only the court can make the determination of whether any of those four plans from Democratic Gov. Tony Evers, Democratic lawmakers and others are constitutional, wrote Jonathan Cervas, of Carnegie Mellon University in Pittsburgh, and Bernard Grofman, of the University of California, Irvine.
Any of those maps could be improved based on criteria the court identified as being important including political neutrality, compactness, contiguity and preserving communities of interest, the consultants wrote.
They declined to draw their own maps, but said they could do so quickly if the court instructed them to.
The political stakes are huge in the battleground state where Republicans have had a firm grip on the Legislature since 2011 even as Democrats have won statewide elections, including for governor in 2018 and 2022. Four of the past six presidential victors in Wisconsin have been decided by less than a percentage point.
Under maps first enacted by Republicans in 2011, and then again in 2022 with few changes, the GOP has increased its hold on the Legislature, largely blocking major policy initiatives of Evers and Democratic lawmakers for the past five years.
The victory last year by a liberal candidate for Wisconsin Supreme Court, who called the current Republican maps “rigged,” cleared the path for the court’s ruling in December that the maps are unconstitutional because districts are not contiguous as required by law.
The court ordered new maps with contiguous districts, but also said they must not favor one party over another. Republicans have indicated that they plan an appeal to the U.S. Supreme Court, arguing due process violations, but it’s not clear when that would come.
The consultants reviewed proposed maps submitted by Evers, fellow Democrats, Republicans, academics and others that would reduce the Republican majorities that sit at 64-35 in the Assembly and 22-10 in the Senate.
The consultants on Thursday called the maps from the Legislature and the conservative Wisconsin Institute for Law and Liberty “partisan gerrymanders.” The Legislature’s map was virtually unchanged from what the current boundaries are.
“The other four submitted plans are similar on most criteria,” Cervas and Grofman wrote.
They said those plans, from a “social science point of view,” are “nearly indistinguishable.”
It ultimately will be up to the Wisconsin Supreme Court, with a 4-3 liberal majority, to decide which maps to enact. The state elections commission has said that must be done by March 15 to meet deadlines for candidates running in the fall.
Evers on Tuesday vetoed a last-ditch effort by Republicans to enact new lines to avoid the court ordering maps. Republicans largely adopted the Evers maps but moved some lines to reduce the number of GOP incumbents who would have to face one another in the new districts.
Evers rejected it, calling it another attempt by Republicans to gerrymander the districts in their favor.
Under most of the newly proposed maps, Republicans would retain their majorities in the Legislature, but the margin would be significantly tightened, judging by an analysis by a Marquette University researcher.
The Wisconsin Supreme Court has also been asked by Democrats to take up a challenge to the state’s congressional district lines. That lawsuit argues the court’s decision to order new state legislative maps opens the door to challenging the congressional map. Republicans hold five of the state’s eight congressional seats.
The moves in Wisconsin come as litigation continues in more than dozen states over U.S. House and state legislative districts that were enacted after the 2020 census .
Two redistricting consultants hired by the Wisconsin Supreme Court’s liberal majority will be paid up to $100,000 each to evaluate new legislative maps ahead of the November elections.
Contracts for University of California, Irvine Political Scientist Bernard Grofman and Carnegie Mellon University Political Scientist Jonathan Cervas were posted by the court Thursday. The consultants will each be paid rates of $450 per hour. The $100,000 cap on expenses can be exceeded with approval from the director of state courts.
Those costs will be paid by parties to Wisconsin’s redistricting lawsuit “as determined by the court in a future order.” With state lawmakers and Gov. Tony Evers involved in the case, the fees could fall to state taxpayers.
Taxpayers are already funding attorneys representing both Republican and Democratic state senators named in the redistricting lawsuit, where fees could total around $2 million.
Both Grofman and Cervas have served as consultants in redistricting cases before.
Grofman worked for Wisconsin Republicans during two previous rounds of redistricting, in 2011 and 2001. More recently, he was hired by the Supreme Court of Virginia in 2021 to help with redrawing legislative districts after a bipartisan commission failed to agree on how lines should be drawn.
Cervas was hired by a New York State judge as a special master last year to draw new legislative districts following a lawsuit by Republican state lawmakers there.
As consultants for Wisconsin’s highest court, the two will submit a report by Feb. 1 evaluating legislative maps submitted by parties in the state’s ongoing redistricting lawsuit per a court order. If Grofman and Cervas find those maps don’t meet requirements set out in the Wisconsin Constitution, federal law and partisan impact guidelines issued by the court’s liberal majority, the consultants will be tasked with drawing their own remedial map.
On Dec. 22, the state Supreme Court’s four liberal justices ruled Republican-drawn legislative maps violate the Constitution’s contiguity requirement, because multiple voting districts contain separate, detached pieces located within other nearby districts. The court’s three conservatives dissented, accusing their colleagues of pre-judging the case with political ends in mind.
The current legislative maps, which were originally drawn by Republican lawmakers in 2011 and signed by former Gov. Scott Walker, bolstered GOP majorities in the state Assembly and state Senate. They were tweaked slightly under a “least changes” approach adopted by the Supreme Court’s former conservative majority during redistricting litigation in 2021, giving Republicans an even bigger advantage.
Currently, Republicans have a 64-35 majority in the Assembly and a 22-11 supermajority in the Senate.
Republican lawmakers have asked the court to stay its order and reconsider their ruling, which is unlikely.
Assembly Speaker Robin Vos, R-Rochester, hinted at a federal appeal, stating that the U.S. Supreme Court will “have the last word.”
The Wisconsin Supreme Court’s conservatives have also criticized the hiring of Grofman and Cervas to critique proposed remedial maps or draw them themselves. They claim the liberal justices’ decision to contract with the consultants raises legal questions.