By: D. Keith Dunnagan, Esq.
December 31, 2024
As I look back on 2024, it proved to be an interesting year. Through the year, BPE continued to help and work with hundreds of clients across Washington, Nevada and California. We look forward to the launch of our next office in Cody, Wyoming, which should be up and operational by Summer 2025.
Coming into 2024 there were a lot of questions for the real estate industry and many still remain. Questions circled about how the Sitzer v. National Association of Realtors (“NAR”) lawsuit and associated reforms would play out and as copy cat lawsuits were being filed across the Country. Following the Sitzer decision, would there be a settlement to end the litigation? NAR did agree to a settlement that should provide stability in the industry, however, it came with several changes to the way real estate professionals work with buyers and sellers of residential properties. We have seen and heard a lot of questions from real estate professionals as they navigate the new landscape but for those that remain flexible and adaptable, it should provide a host of new opportunities in the industry.
Housing inventory generally remains low and interest rates remain high. The end of summer saw a flurry of rate drops and competition, only for the beginning of winter to see some cooling of the rate drops and prognostications from the Fed that the rates cuts will likely be slower in 2025 as inflation metrics are not where the Fed wants them. The question going into 2025 is: will we see rate reductions and increased inventory? With low supply we are not seeing reductions in housing costs, rather, recent data suggests the housing costs grew at a rate of approximately 6-8% across the broad-based market.
The California legislature continued to put pressure on landlords and the rental market by passing several more laws that impact residential rental properties. Most of the changes were procedural in nature but a key change in the law is related to the time in which a tenant may file their answer to an unlawful detainer (eviction) complaint. The law previously required the answer to be filed within 5 business days. That has been doubled to 10 business days. The unlawful detainer process is just taking longer these days and landlords who often get stuck holding the bag of unpaid rent are going to have to factor these costs a little more as this will add a little more time.
Naturally, the election dominated the news and for some the election results were a mixed bag of emotions. The question remains what will be done at the federal level. Every candidate promises a bunch of things during the election cycle; however, what they can get through Congress or the Assembly are often something different. One particular item that we will all be paying attention to is the upcoming expiration of many of the 2017 tax cuts that are set to expire at the end of 2025. What will the response by the elected officials to the proposed extension of those tax cuts look like? It would seem likely that something gets done as no member of Congress (all of the House members and 1/3 of the Senate members) who seeks re-election in 2026 wants to do so with increasing taxes on their hands. Time will tell how that will play out.
2025 will prove to be an interesting year. Even with the laws aimed at reducing costs in the rental market, don’t expect big changes in cost. There is still a bit of inflation, but the bigger problem, much like 2024, is the supply of available housing. If the supply remains below the housing need, demand will likely keep prices very high. If interest rates continue to trickle down, what will rates do relative to the 10 year treasury yield benchmark? Even with a tighter market in 2024, we saw modest appreciation in housing suggesting that supply is not sufficient to meet demand, which has long been a theme in California.
But 2024 for BPE was great for our team. Our team, after three years without a retreat, held a business retreat, a great time to bring the teams members from all of the locations to a single place for a long weekend of team building and discussing the next steps for the Company. I am honored and privileged to be able to lead such a great team and they had some amazing successes. Two of our lawyers worked a case and were able to get the opposing party to dismiss the action on the eve of trial and secured an award of partial attorney fees on behalf of our client. It is a great result for our client. Our business lawyers helped several small businesses buy and sell businesses throughout the year as we help our clients navigate the business lifecycle from entrepreneurship to retirement. Real estate law is full of nuances and it is BPE’s understanding of these nuances that allows our attorneys to obtain great results for our clients.
This year saw multiple attorneys being recognized for their accomplishments in the profession. Some were recognized as Rising Stars, while others were recognized as a best lawyer in Sacramento. All of these awards are well deserved.
For BPE, we continued to grow our Washington office and we are providing valuable services to the people of Central Washington to complement our legal service offerings in California and Nevada. We added team members to increase our ability to serve and in 2025 we look forward to growing our firm as we look forward to launching our Wyoming office. Most importantly, at our 2024 retreat, BPE announced the promotion of a transaction attorney to Partner. We are thrilled to have Melanie continue to lead and grow our transaction team. We are truly grateful for the trust all of you have put in our company and we are honored that you trust us with your legal needs.
Have a Happy Holiday Season and a Prosperous New Year!
