Think-Realty-Magazine-April-2018

COVER STORY

LAWRENCE YUN

economy that play a huge role in how the market acts at any given time.” He added, “We also monitor policy changes very carefully,” noting that real estate investors, far more than individual homeowners in many cases, have a deeply vested interest in pro-real-estate public policies that will protect investors’ interests and keep homeowners feeling positive about ownership. “Anything that affects the business affects the bottom line, and policy changes definitely impact the bottom line,” Yun said, citing tax reform policy as a recent example. “One thing that [the NAR] vigorously lobbied for was the preservation of the 1031 exchange,” he explained. 1031 exchanges (see sidebar on p. 24) permit investors to defer capital gains taxes on the sale of

the multifamily developments, new construction, and elite sectors.” Yun added real estate investors are integral to market stability just as he believes homeownership to be: “If you look at the deep downturn in the Great Recession during 2009 and 2010, when foreclosure rates were rising, there were a smaller than normal share of what we might refer to as ‘regular’ or ‘traditional’ buyers. It was the real estate investors who stabilized the markets as they came in and bought up excess inventory that was floating out there in the market.” SPOTTING (AND SPOTLIGHTING) MARKET TURNING POINTS Yun defines his role as NAR’s chief economist (he is also officially the association’s senior vice president of research) in terms of his role in tracking economic and housing market trends and then identifying how they will affect national and local real estate markets. These “turning points,” as he calls them, can take many forms. Identifying them and making accurate, informed predictions about how they might affect real estate markets, homeowners, homebuyers, and business owners reliant on real estate, requires him to evaluate many factors and economic indicators. Unlike many real estate analysts who rely solely on monthly, trackable, long-term numbers on employment, population, and home values, Yun considers a number of less traditional, for real estate at least, numbers as well. “The NAR has a great deal of proprietary data on the housing market that deals with overall consumer confidence, builder confidence, and homeowner, -buyer, and -seller psychology,” he explained. “There is a psychological variable involved in the mindset about real estate and the

ACross-Section of Lawrence Yun's Research Activity

• NAR Existing Home Sale statistics • NAR Affordability Index • NAR Home Buyers and Seller Profile Report • Blue Chip Council • Harvard University Industrial Economist Council

Learn more about Lawrence Yun at www.nar.realtor/lawrence-yun

A big part of Yun's job involves gathering, discussing, and analyzing data about the housing market.

WHEN LAWRENCE YUN TALKS about real estate, the discussion revolves around what he refers to as “turning points” in national and local markets. “My role, as chief economist at the National Association of Realtors (NAR), is to look at the economy, the housing market, to assess current conditions, and make projections about what real estate may look like down the line so that people in real estate can better anticipate some of the turning points [in the market] for their business planning,” he said. Yun went on to detail how real estate analysis cannot simply involve dozens of housing market variables, but must also include close

to disregard NAR commentary and membership as largely irrelevant to their businesses. Yun, himself, observed that to a significant degree, the real estate investing community is perceived externally as one comprised largely of landlords serving the population which cannot or chooses not to own. In reality, the role of the investor is far broader. “Real estate investors play a critical role throughout real estate,” Yun said. “The real topic should be whether a market affords opportunity for small-time investors, individuals, and husband-and-wife or family investment teams or is dominated by big corporations running the apartments,

examination of jobs, inflation, Federal Reserve activity, consumer confidence and psychology, and policy issues. “I firmly believe that real estate ownership brings stability to the homeowner, on a personal level, and to the larger economy and the country,” he said. “Of course, homeownership tends to coincide with personal financial stability, but it also contributes to personal security, a wider middle class, and, thanks to pride in ownership, a greater national interest in having input into policy-making decisions and participation in the U.S. democracy. This intense focus on homeownership sometimes leads real estate investors

Yun's access to proprietary real estate data derived from the NAR's many studies and surveys makes his housing analyses uniquely insightful.

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