The change to Article 10 of the REALTORS® Code of Ethics passed in a roll-call vote by a greater than 9-to-1 margin. It had been previously approved by the Professional Standards Committee and the Board of Directors at the 2010 Midyear Meetings in Washington D.C. Here is the amended language of Article 10 (additions are underlined):

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

A related recommendation amending Standard of Practice 10-3 was approved as well:

REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

The amendment was discussed prior to the vote. A few of the questions raised were:

1. Is “sexual orientation,” without qualifiers or any further explanation, the right phrasing?
2. Is NAR denying private property rights (ostensibly, the right of property owners to refuse to do business with people of a certain sexual orientation due to their moral beliefs)?
3. Should NAR precede the federal government in adding sexual orientation as a protected class?

In response to the third question, a delegate from Minneapolis pointed out that the purpose of the Code of Ethics was to hold REALTORS® to a higher standard. Another delegate who approved of the amendment said the Code of Ethics was a living document.

Delegates approved the Code change by voice vote, but one delegate called for a vote by ballot. In ballot voting weighted by size of local association, the amendment passed by more than 93 percent.

- Brian Summerfield, REALTOR® Magazine

Anyone trying to rent or sell a property on the Gulf Coast should keep these issues in mind.

• Don’t panic. The next few months could be difficult, but this too shall pass.
• Be forthright. Address the issues on your Web site and on the Web site for your client’s property. Say something like, “We know you’re concerned about the oil spill; we are too.” Add links to reliable news stories and blogs.
• Take pictures. Date-stamped photos of clean water may reassure would-be buyers and renters.
• Focus on non-beach attractions. Golf courses, shopping, and theaters are important and unaffected assets.
• Be prepared to negotiate. Bad news brings out bargain hunters.
• Document losses. Help sellers by providing a broker’s price opinion to serve as a baseline should property values decline, and pursue compensation from the government or BP.

Some recovery in the labor market and record low mortgage rates could help offset some of the pressures on the housing market, according to a new study released by the Joint Center for Housing Studies at Harvard University.

“Right now, economists expect the unemployment rate to stay high, but if employment growth surprises on the upside or downside, housing numbers could too,” Eric Belsky, executive director of the center, said in a statement.

Home owners’ level of debt relative to equity stood at a record 163 percent at the beginning of the year, and housing costs have become a severe burden for more borrowers, the center adds.

With the real estate market improving, three-quarters of REALTORS® are very certain they will remain active in the market for two more years, according to the 2010 National Association of REALTORS® Member Profile. Only 8 percent were uncertain about their future.

The study’s results are representative of the nation’s 1.1 million REALTORS®, who account for 60 percent of the 1.85 million active real estate licensees in the U.S. The typical NAR member has 10 years of experience, and many have increased their training, Web presence and use of social media over the past year. More than half use social networking sites, up from 35 percent in 2009.

Analysis of data from the Association of Real Estate License Law Officials shows the number of active real estate licensees in the U.S. fell 7.5 percent last year from 2.0 million in 2008. The number of licensees who are not REALTORS® was 750,000 in 2009, down 14.8 percent from 880,000 in 2008. At the same time, NAR membership fell only 0.7 percent.

NAR President Vicki Cox Golder said these comparisons mark a sharp contrast. “REALTORS® are much more likely to remain active in the business than real estate agents or brokers who are not NAR members. REALTORS® are helped by the support and benefits they receive from NAR, as well as their local and state REALTOR® associations. Many members take advantage of down time to improve their skills and training to better serve future clients, but there also are intangible benefits that come from networking and membership in the nation’s largest trade association,” she said.

“In addition, many are diversified in their business practices – they don’t put all their eggs in the residential sales basket,” Golder said. “While eight in 10 members specialize in residential sales, almost all REALTORS® also have secondary areas of focus – only 3 percent don’t.”

Twenty-two percent of respondents also offer commercial brokerage, 21 percent are in relocation, 18 percent residential property management, 15 percent counseling and 13 percent land development. Smaller percentages were also in commercial property management, residential appraisal, international, auction, and commercial appraisal.

Residential brokerage was cited as a secondary business for 11 percent of respondents who had other primary specialties.

Although the economy has been growing lately, fallout from the recent recession continued to negatively impact commercial real estate sectors in the fourth quarter, but there is hope for some improvement next year, according to the National Association of REALTORS®.

Lawrence Yun, NAR chief economist, said commercial real estate almost always lags the economy. “Because of the lingering impact from the deep recession over the past two years, vacancy rates will trend higher and many commercial property owners will need to make rent concessions,” he said.

“With the job market expected to turn for the better later this year, we’ll see rising demand for office and warehouse space, but that isn’t likely before 2011,” Yun said. “At the same time, improved consumer confidence would help sustain the retail sector and encourage more people to enter the rental market.”

Yun notes that commercial vacancy rates remain high in most market areas and are depressing rents.

The Society of Industrial and Office Realtors, in its SIOR Commercial Real Estate Index, an attitudinal survey of more than 700 local market experts, suggests a flattening level of business activity in upcoming quarters with 55 percent of members expecting the market to improve in the second quarter.

The SIOR index rose 0.2 percentage point to 35.5 in the fourth quarter, compared with a level of 100 that represents a balanced marketplace. This is the first gain following 11 consecutive quarterly declines. Although some indicators show that a decline in commercial property values is beginning to flatten, 86 percent of respondents report prices are below replacement costs.

Nearly nine in 10 survey participants said new commercial development is virtually nonexistent in their market areas, and rent concessions are reported almost everywhere.

A Long Way To Go
An independent survey earlier this month showed a couple dozen banks are willing to expand commercial credit this year, which is critical. The lending expansion is aided by the Federal Reserve’s Term Asset-Backed Loan Facility (TALF), which is encouraging issuance of commercial mortgage-backed bonds. In addition, regulators are prodding lenders to extend terms for many existing commercial loans.

“We have a long way to go for satisfactory levels of commercial credit, but these are important first steps,” Yun said. “Given that about $1.4 trillion in commercial debt will come due over the next three years, more extensive action is needed and the Fed needs to more actively help resuscitate commercial mortgage-backed securities. The credit improvement will mean more commercial property sales in 2010, even some at deeply discounted prices.”

Looking at the overall market, commercial vacancy rates generally will stay at elevated levels, according to NAR’s latest COMMERCIAL REAL ESTATE OUTLOOK. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors.

Office Market
With a lot of sublease space currently on the market, vacancy rates in the office sector are forecast to rise from 16.3 percent in the fourth quarter of 2009 to 17.6 percent in the fourth quarter of this year; the longer term outlook is for vacancies to average 17.4 percent in 2011.

Annual office rent is projected to decline 7.2 percent in 2010, following a drop of 12.7 percent last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, should be a negative 27.3 million square feet in 2010.

Industrial Market
There is proportionately less industrial sublease space on the market than in the office sector, but obsolescence remains a factor. Industrial vacancy rates will probably rise from 13.9 percent in the fourth quarter of last year to 14.9 percent in the closing quarter of 2010; they could average 14.5 percent next year.

Annual industrial rent is likely to fall 9.6 percent this year, after declining 10.9 percent in 2009. Net absorption of industrial space in 58 markets tracked is seen at a negative 93.5 million square feet in 2010.

Retail Market
Retail vacancy rates are expected to edge up from 12.4 percent in the fourth quarter of 2009 to 12.7 percent in the same period of this year, and may hold at that level in 2011.

Average retail rent is forecast to decline 2.4 percent in 2010, following a drop of 4.0 percent in 2009. Net absorption of retail space in 53 tracked markets should be a negative 3.4 million square feet this year.

Multifamily Market
The apartment rental market – multifamily housing – is poised to gain from a rise in household formation. Multifamily vacancy rates are likely to decline from 7.4 percent in the fourth quarter of last year to 6.6 percent in the fourth quarter of 2010, and possibly edge down to 6.1 percent next year.

Average rent is projected to decline 3.4 percent this year, following a decline 3.6 percent in 2009. Multifamily net absorption is expected to be 115,000 units in 59 tracked metro areas this year.

Vacant residential lots are looking better and better to real estate investors.

The cost of a finished, ready to build lot, can cost a developer about 25 percent of the finished home price. There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare. Investor groups are snapping them up, figuring that the time will come soon when they will be in demand.

“The country needs 1.2 million new units for the next 10 years just because of population growth,” says Scott Clark, president of American Development Partners, which has bought thousands of vacant lots all over the West. “[U.S. builders] built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand. We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant.”

Effective April 22, 2010, a new rule regarding lead based paint goes into effect.  This new regulation, issued by the EPA, deals with lead-safe work practices and contractors who work in buildings with lead based paint.

The new Renovation, Repair and Painting Rule pertains to anyone who receives compensation for working in residences built prior to 1978 and deals with any other the painted surfaces in the residence.

Per the EPA website:

The requirements under the rule apply to maintenance, renovation or repair activities where six square feet (about the size of a poster) or more of a painted surface is disturbed inside, or where 20 square feet or more of painted surface (about the size of a door) is disturbed on the exterior. Window replacement is also covered by the rule. Under the new rule, child-occupied facilities are defined as public or commercial buildings where children under age six are present on a regular basis. Those affected by the rule will be required to:

• Apply to EPA to be approved as a Certified Renovation Firm.
• Receive the necessary training and certification from an EPA-accredited training provider for Lead Safe Work Practices.
• Assign a Certified Renovator to be present at each project
• Ensure that lead safe work practices are used throughout the project.
• Provide consumers or tenants with the EPA pamphlet “Renovate Right” prior to the start of any project that will disturb six or more square feet of interior painted surface or 20 or more square feet of exterior painted surfaces in housing and child occupied facilities built before 1978.
• Maintain records documenting that the required information has been provided at each project subject to the rule.

Wells Fargo & Co. economists wrote in a note to clients last week, “The calculus of home buying and finance has changed,” summing up succinctly something that is troubling housing experts all over the country.

Housing researcher Global Insight recently released a study of U.S. housing prices that points to the magnitude of the collapse of values.

Nationwide, Global found housing values were about 10 percent undervalued, based on a model that examines interest rates, household incomes, population, and historical price patterns. That’s a modest number compared to metro areas hardest hit by the housing recession.

In Fort Lauderdale, Fla., Global calculated that housing prices were 24 percent undervalued as of the third quarter of 2009. Three years ago, it said the area was 44 percent overvalued. Global calculates that Las Vegas is now undervalued by 41 percent compared to being 33 percent overvalued in 2006.

The trillion-dollar question is: When will things turn around? As long as there is high unemployment and tight credit, many experts believe it won’t be anytime soon.

Some real estate researchers are forecasting that home prices will fall again in 2010.

· Fiserv Lending Solutions, a financial analytics firm, predicts that prices will decline an average of 11.3 percent in 342 of the 381 markets it covers.

· Moody’s Economy.com foresees another 8 percent drop, with Arizona, California, Florida, and Nevada feeling even more pain.

· Shari Olefson, author of Foreclosure Nation: Mortgaging the American Dream, predicts a national average decline in prices of about 10 percent in 2010.

· Peter Schiff, president of Euro Pacific Capital and the most bearish of the bears, says real estate prices could possibly fall another 30 percent before they hit bottom.

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun sees it all differently. He predicts home prices will rise more than 3 percent in 2010.

“The headwind we face is rising mortgage interest rates,” Yun says, “but the compensating factors will be the home buyers tax credit in the first half of the year and increased job creation in the second half.”

Falling prices for real estate and the declining value of the dollar are luring investors from all over the world to purchase properties for as little as half what they might have paid four years ago.

“This could be a once-in-a-generation opportunity for real estate investment,” says Arthur Wong, whose Calgary, Alberta-based U.S. Real Estate Fund has invested $5 million in properties in the U.S. Southwest and plans to buy millions more.

Buyers from countries like Brazil, Canada, France, and the Netherlands, whose currencies are particularly strong against the dollar, are spending millions on luxury condos in New York City, Las Vegas, and Miami. Foreign buyers also find the warm climates of California, Texas, and Arizona attractive.

Peter Zalewski, a principal with Miami-based Condo Vultures, says he has sold foreign condo buyers seven bulk deals in downtown Miami alone, with investors coming from Argentina, Canada, Colombia, Italy, Norway, and Venezuela.