In this week’s GAD Top Three I will share my top 3 takeaways from the REALTORS Legislative Meetings held this past May 6th through May 11th.
1. AI Has Infiltrated the Real Estate Industry and Is Likely Here To Stay
The 2023 REALTORS Legislative Meetings featured two sessions during the week on Artificial Intelligence, covering both the opportunity that AI presents for the real estate industry and, just as important, the pitfalls. The general session on AI acknowledged the importance of understanding that it is just a reflection of the information that has already been accumulated and the bias of those original human creators of that information. With this in mind, it was expressed the importance of transparency with AI about where the information comes from. Put simply, the output of AI is a result of the input made by the AI creators, their bias, and their sourcing. This is essential to be wary of as AI takes a stronger and stronger foothold in the real estate industry as time goes on.
However, it is also important to acknowledge that AI provides an incredible opportunity for the real estate industry. The message of the session How AI is Transforming the Real Estate Industry was “AI will not replace you. A person using AI will.” This session was standing room only and I was amazed to see that when it was asked how many REALTORS and real estate professionals in the room were already using an AI tool in their business, more than 80% of the room raised their hands.
Paraphrasing speaker Marki Lemons Ryhal when talking about AI tools like ChatGPT: if you are only using AI to write your listing descriptions, then you are just scratching the surface of what AI can do for you. It's important to note that Marki strongly recommended always taking the time to edit the descriptions generated by tools like ChatGPT. Marki is also a strong advocate of Canva, which she uses heavily for her business while acknowledging that copyright laws on AI are unclear at the moment and recommended using Canva as a paid service.
What is clear is AI is exploding right now in the real estate industry and unlike to go away anytime soon. Chat GPT which has launched this growth in AI went live in November 2022, so there is plenty of time to get yourself up to speed, as this is a change that is likely to remain a part of the real estate industry for some time.
2. Dr. Yun, the Worst of Inflation is Behind Us
The Residential Economic Issues and Trends Forum featured presentations by both the National Association of REALTORS (NAR) Chief Economist, Dr. Lawrence Yun, and Robert Dietz, the Chief Economist for the National Association of Home Builders (NAHB). Dr. Yun expressed that, in his opinion, inflation has settled down and he does not believe the Federal Reserve should have raised interest rates at their May 2-3 meetings. He shared that home sales have almost fallen to the same amount as during COVID. However, this home shortage has continued to provide overall price gains in the housing market with 70% of the country seeing price gains in Quarter 1 of 2023 and 30% seeing declines.
The NAHB Chief Economist shared that there are still a number of factors working against home builders despite the growth rate of residential construction costs coming down. These factors include tightening credit for building over the past 4 quarters as interest rates climb and regulatory costs of home building at roughly $90,000 per home sometimes as high as $200,00 in high-demand markets. It was also noted that in a healthy real estate market, new inventory makes up 15% of all home sales. In our current market, new inventory makes up about 33% of home sales and will continue to have outsized importance until home sales inventory increases.
3. Diversity, Equity, and Inclusion Remain a Priority of NAR
The National Association of REALTORS (NAR) Board of Directors approved recommendations requiring association board members to complete the following Diversity, Equity, and Inclusion (DEI) and Fair Housing Education:
These requirements will be phased in, in the following manner:
- Directors serving in 2024 will be required to complete the three programs as a performance expectation by May 1, 2024.
- Beginning with the 2025 board, completing the programs will be a qualification for serving as a director.
Based on presentations and conversations throughout the REALTOR Legislative Meetings these requirements are likely just the beginning of DEI and Fair Housing requirements in an effort to raise the bar of professionalism and uphold the Code of Ethics and Standards of Practice of NAR. If you have not already participated in these programs give them a look!