“Ladies and gentlemen,” he said, “if winter is coming, I don’t know when it’s going to arrive. 2017 was a terrific year.”
McCallister outlined how markets throughout the United States, including
timberland and agricultural, are doing well. For example, in the Delta
region that includes Arkansas, Mississippi, Tennessee and other southern
states, buyers are snatching up anything and everything that comes onto
“Those buyers are paying above market values for those properties,” he said, based on conversations with consultants.
In the Florida panhandle, speculators whom McAllister referred to as
“slicers and dicers,” purchase land at 100 acres at a time, subdivide it
and sell off five-to-10 acre tracts.
“We’re seeing that come back to the marketplace,” he said. “It’s been around 10 years since we’ve seen that level of activity.”
Real estate: More bidders/buyers than they have ever had
What continues to be a difficult sell in McAllister’s service area are
undeveloped residential lots. However, land used for agriculture is
productive and supports more agricultural rent, which means it’s more
McAllister, who is in frequent contact with auction real estate
professionals in Indiana, said quality farmland in the Midwest has had
“more bidders/buyers show up than they have ever had before. There is a
lot of interest in land. As Mark Twain said, ‘they’re not making any
more of it.’”
Christopher Vaughan, AARE, AMM, Western Regional Director for
Higgenbotham Auctioneers, has been in real estate since 2009 and focuses
on government contracts. He was part of the panel and discussed trends
specific to his specialty during the conference.
“Folks in government think a lot differently than you and I,” Vaughan
said in his opening statement to a smattering of laughs. “People work in
business to make money. People work in government to exercise power.
“Without our money, the government has no power.”
Vaughan said, however, that it’s important for Auctioneers to get to
know local, state and federal representatives and “work with them so
they can see that the auction approach is the best way.” He shared how
he has met with his Congressmen and staff members of his senators about
legislation that will help the auction industry.
Since Election Day of 2016, Vaughan said the volume of government
business in terms of request for proposals on a nationwide basis has
“increased dramatically, especially in real estate.” It appears that
more government land will become available for sale, and it could
“[The United States President] has already indicated a willingness to downsize the real estate portfolio of the government.”
Vaughan said Housing and Urban Development Secretary Ben Carson has
indicated a willingness to get the federal government “out of the
housing business,” but ensuring FHA loans and Section 8 housing vouchers
would remain under the government’s purview.
“In terms of the federal government and housing authorities owning real
estate and managing it,” he said, “quite frankly, they don’t do a very
good job of it.”
Real estate: Positive impact from the new tax bill?
Reduced maintenance funds for housing authorities, which Vaughan said
have decreased over the last 10 to 15 years, makes it “tough for the
housing authorities to own and manage” the property, which is why they
want to unload it. While an increased number of government RFPs could
benefit Auctioneers, Vaughan said some elected officials are reticent to
go with the auction method because they “want the final say and try to
negotiate the deal.”
Soozi Jones Walker, a commercial real estate broker based in Las Vegas,
also sat on the panel and talked about the positive impact of the new
tax bill, which was passed by Congress in late December.
“The promising thing we have going on for us is the promise of lower
taxes,” she said. “Realistically, it’s going to be a good thing for the
U.S. and the possibility of repatriating those dollars that are sitting
outside the country – bringing them back in is going to be huge for us
in the businesses we’re in.”
With a tax rate as low as 21 percent, she said there is a real incentive
for corporations to invest in real estate. Furthermore, with America’s
stable economy, foreign investors whose currency is devalued should be
showing more interest in American real estate, even property with a low
return, because they’re not losing money in their currency.
“In the next 24 months,” Walker said, “I think China slowing down their
economy is going to have an effect. I think the positive side of it is
that those that can get their money out will bring it to America because
the U.S. has a very stable economy.
“In the long range because they fluctuate, that money may go back and
forth, it could be great for the auction folks – people that do land –
and for the residential side.”
Walker continued, saying that in the next year to 24 months, auctioneers
who were “beating the grass to find one or two bidders could have
multiple bidders “strictly because there are so many different entities”
looking for real estate investments.
“The heydays are coming back, I think,” she said. “I’m cautiously optimistic.”
The 2017 NAA Real Estate Workshop was held as part of the Real Estate Community of Practice.