The 2021 Five Star Conference and Expo kicked off Sunday with the FORCE Rally and reception for members of Five Star's Federation of REO Certified Experts group. The session was hosted by Continental Realtors and co-hosted by RealtyTrac, whose EVP Rick Sharga delivered the keynote address.
Sharga, one of the country’s most frequently quoted sources on real estate, mortgage, and foreclosure trends and founding member of the Five Star National Mortgage Servicing Association, set the tone for an afternoon in which real estate professionals looked ahead to a post-pandemic REO workflow, considering what near-future volumes will look like, and speculating on when the market might return to more-typical levels.
“You’re going to start seeing notes about how home sales are down year-over-year … you’re going to be seeing those numbers going down year-over-year because last year was unusual,” Sharga said. “But if you look at 2019’s numbers and compare them to 2021, we’re actually going up. Don’t believe that the housing market is weakening when reading headlines that say the housing market is going down. We’re looking this year at close to 6 million existing homes being sold, which is just extraordinary under the circumstances, and its especially extraordinary because we’re doing that despite the fact we have lowest inventory in decades.
"Right now nationally there is about a 2.5 month supply of homes available for sale,” Sharga continued. “In a normal market—a market with equilibrium—that’s about a 6-month supply. And that supply/demand imbalance is what is driving home prices up.”
This event brought together FORCE-membership agents and brokers with asset management executives and subject-matter experts to discuss the unprecedented changes facing the REO landscape and how to collaborate best to address challenges while achieving success.
Owner and Principal Broker at Continental Realtors, Luis Guzman, delivered opening remarks, and welcomed a cast of industry executives who broke the evening into three discussion panels.
Sharga, SingleSource's Stacey Bayley, Mr. Cooper's Ramie Word, and Freddie Mac's Eric Will took an in-depth look at Where Housing is Headed during their segment, during which they broke down prevailing market conditions and circumstances that will impact business for REO agents in the months and years ahead.
Panelists agreed that while homeowners and borrowers across the country are struggling, they do not expect a huge influx of distressed properties.
“So I get pushback mostly from REO agents about my hopelessly optimistic projections for what is going to happen in the marketplace,” Will responded. “We probably shouldn’t expect to see a tsunami of foreclosure activity, and probably shouldn’t expect to see a huge wave of REO.”
Word echoed Will's sentiments.
“I think you made a good point earlier that we could kinda see an initial wave of foreclosures from pre-pandemic foreclosures that were in the pipeline,” Word said. “We shouldn’t lose sight of though is that a big chunk of those are in a restart state.”
In their Understanding Guidelines panel, Countywide Properties' Justine Jimenez Garcia and Statebridge Company's Bryce Fendall provide insights into navigating the details of assignments, focusing on understanding asset management valuation, short sale and repair expectations, and investor guidelines.
“If I was a broker right now, today, I would make sure my social media was tuned-up and ready to go,” Fendall said. I would go up to the broker sites and make sure it’s all up to date … we’re looking for an agent that adds value to a transaction.
And during the View from the Ground roundtable—Garcia and fellow FORCE Advisory Council Members Laura Dietz of Merlin Enterprises/Summit Realty, Steven Pagano from Pagano Properties/First Hawaiian Realty, Sarah Richards of Spring Mountain Realty, and Jeff Russell from Russell Realty Group—discusses their chosen methods of securing and maximizing business. The panelists responded to questions on business development strategies, mastering one's market, and diversity, equity, and inclusion practices, to name a few.
They also touched on disaster response.
“If you’re at a property and you get a call that there was a fire, we have to go out and do an evaluation for our client,” Dietz said. “We need to find out what that asset is worth, what do we need to do to make it safe. All of my teams, we are disaster trained … we have a first responders kit in our trunks because a lot of times there is an emergency that happens at the property.”
And finally Mark Johnson, LRES Corporation President, and Brian Hennessy, the SVP of LRES, delivered a state-of-the-industry address.
“The dynamics today are a little bit different than 12-to-15 years ago,” Johnson said. “The stock market is at all-time high, interest rates are at an all-time low, so that means houses are moving quickly, and the House Price Affordability Index is up 15%.”
“Home pricing is at all-time highs, but we also have to look at the housing shortage,” Hennessey said. “The Wall Street Journal said that we have 10 years of problems associated with the housing shortage.”
The FORCE Rally and Reception was the inaugural item on the 18th annual Five Star Conference and Expo—themed Welcome Home—agenda. The conference, which runs through Tuesday at the Hyatt Regency Dallas, features leading subject-matter experts, showcases hundreds of exhibitors, and attracts thousands of mortgage professionals from across the nation who share the common goal of building a stronger residential mortgage industry.
“The conversations that unfold at Five Star have never been more critical, and we look forward to helping facilitate them, live and in-person,” said Ed Delgado, Chairman of Five Star Global, the parent company of the Five Star Institute.