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Why Smart People Don't Multitask
Dec 21, 2016
You may have heard that multitasking is bad for you, but new studies show that it kills your performance and may even damage your brain. Every time you multitask you aren't just harming your performance in the moment; you may very well be damaging an area of your brain that's critical to your future success at work.
Research conducted at Stanford University found that multitasking is less productive than doing a single thing at a time. The researchers found that people who are regularly bombarded with several streams of electronic information cannot pay attention, recall information, or switch from one job to another as well as those who complete one task at a time.
A Special Skill?
But what if some people have a special gift for multitasking? The Stanford researchers compared groups of people based on their tendency to multitask and their belief that it helps their performance. They found that heavy multitaskers—those who multitask a lot and feel that it boosts their performance—were actually worse at multitasking than those who like to do a single thing at a time. The frequent multitaskers performed worse because they had more trouble organizing their thoughts and filtering out irrelevant information, and they were slower at switching from one task to another.
Multitasking reduces your efficiency and performance because your brain can only focus on one thing at a time. When you try to do two things at once, your brain lacks the capacity to perform both tasks successfully.
Multitasking Lowers IQ
Research also shows that, in addition to slowing you down, multitasking lowers your IQ. A study at the University of London found that participants who multitasked during cognitive tasks experienced IQ score declines that were similar to what they'd expect if they had smoked marijuana or stayed up all night. IQ drops of 15 points for multitasking men lowered their scores to the average range of an 8-year-old child.
So the next time you're writing your boss an email during a meeting, remember that your cognitive capacity is being diminished to the point that you might as well let an 8-year-old write it for you.
Brain Damage From Multitasking?
It was long believed that cognitive impairment from multitasking was temporary, but new research suggests otherwise. Researchers at the University of Sussex in the UK compared the amount of time people spend on multiple devices (such as texting while watching TV) to MRI scans of their brains. They found that high multitaskers had less brain density in the anterior cingulate cortex, a region responsible for empathy as well as cognitive and emotional control.
While more research is needed to determine if multitasking is physically damaging the brain (versus existing brain damage that predisposes people to multitask), it's clear that multitasking has negative effects.
Neuroscientist Kep Kee Loh, the study’s lead author, explained the implications:
"I feel that it is important to create an awareness that the way we are interacting with the devices might be changing the way we think and these changes might be occurring at the level of brain structure.”
The EQ Connection
Nothing turns people off quite like fiddling with your phone or tablet during a conversation. Multitasking in meetings and other social settings indicates low Self- and Social Awareness, two emotional intelligence (EQ) skills that are critical to success at work. TalentSmart has tested more than a million people and found that 90% of top performers have high EQs. If multitasking does indeed damage the anterior cingulate cortex (a key brain region for EQ) as current research suggests, doing so will lower your EQ while it alienates your coworkers.
Bringing It All Together
If you’re prone to multitasking, this is not a habit you’ll want to indulge—it clearly slows you down and decreases the quality of your work. Even if it doesn’t cause brain damage, allowing yourself to multitask will fuel any existing difficulties you have with concentration, organization, and attention to detail.
ABOUT THE AUTHOR:
Dr. Travis Bradberry is the award-winning co-author of the #1 bestselling book, Emotional Intelligence 2.0, and the cofounder of TalentSmart, the world's leading provider of emotional intelligence tests and training, serving more than 75% of Fortune 500 companies. His bestselling books have been translated into 25 languages and are available in more than 150 countries. Dr. Bradberry has written for, or been covered by, Newsweek, TIME, BusinessWeek, Fortune, Forbes, Fast Company, Inc., USA Today, The Wall Street Journal, The Washington Post, and The Harvard Business Review.
If you'd like to learn how to increase your emotional intelligence (EQ), consider taking the online Emotional Intelligence Appraisal® test that's included with the Emotional Intelligence 2.0 book. Your test results will pinpoint which of the book's 66 emotional intelligence strategies will increase your EQ the most.
Let’s finish out the year with a holiday basket packed with good news: We’re ending 2016 in better economic shape than in recent years. Unemployment is down to 4.6%, its lowest level since August 2007; consumer confidence is higher than it has been since July 2007; and home values nationally and in more than half of the major markets in the country have recovered.
We’re employed, confident, and have recovered equity in our homes. The stock market is up and flirting with all-time highs.
That sounds like the perfect backdrop to buy a home in 2017, whether it’s a first-time purchase, a move up, a downsize, or a relocation. Right?
Maybe. But before you take the plunge, you’re going to have to come to grips with two factors that are now decidedly worse for buying than they were at the end of last year: Mortgage rates are higher, and the inventory of homes for sale is lower.
Mortgage rates are a bit more than a quarter of a point higher now than they were at the end of 2015. That translates into payments that are 3% higher. Still, that increase can be managed by most.
The key challenge for potential buyers is that rates are now likely to move up more—as much as three-quarters of a point in 2017. That would be increasing payments by an additional 9%.
Tight inventory levels have been a problem for more than four years. As sales have grown, supply has fallen. We’ve seen the age of inventory—how long homes sit on the market—drop dramatically as home buyers burn through the available stock.
We’ve had an abnormally strong autumn for home sales because frustrated buyers are keeping at it even after the end of peak buying season. We also saw more new buyers emerge later in the peak season. Then as mortgage rates started to move up in October and then accelerated their rise in November and December, a new sense of urgency was added to the mix.
As a result of this unusually strong demand in the slower time of the year, we will end this year with at least 10% fewer homes for sale than we had last year. And we thought last year was bad!
Get started on your home hunt now
If your New Year’s resolutions include buying a home, I would suggest getting an early start. January and February typically are the slowest months of the year for sales, as harsh weather in most of the country dissuades most potential buyers.
Buyers in January and February face far less competition from other buyers, yet inventory is only marginally lower than in the spring.
Since mortgage rates are likely to move up as the year progresses, the beginning of the year represents the best time to lock in rates before they get even higher.
Early-year buyers can use the holidays to get ready. Organize your financial information to make getting pre-approved for a mortgage easier. Use realtor.com® to find an expert local Realtor® to help you. And while you are there, sign up for alerts on new homes and price changes on neighborhoods that interest you.
Jonathan Smoke is the chief economist of realtor.com, where he analyzes real estate data and trends to develop market insights for the consumer. Follow @SmokeonHousing
Various real estate entities have weighed in with their prognostications for the 2017 housing market. Most observers expect home sales and prices to moderate in the coming year. They say suburbs will make a comeback while the days of low mortgage rates are over.
Of course, a lot depends on the actions of the new administration. Although President-elect Donald Trump said little about housing during the campaign, some of the issues he highlighted will have an effect on the residential real estate market, such as infrastructure spending, regulatory and tax reform, and immigration policies.
Below is a roundup of what the experts say buyers, sellers and renters can expect in 2017:
Realtor.com predicts “a year of slowing, yet moderate growth.” The listing service for the National Association of Realtors compiled five housing trends for 2017:
Millennials and boomers will dominate the market. Realtor.com expects these two massive demographic groups to power demand for the next decade.
Midwestern cities will continue to be hotbeds for millennials. According to Realtor.com, millennials are clamoring to live in Madison, Wis.; Columbus, Ohio; Omaha; Des Moines; and Minneapolis.
Slowing price appreciation. Realtor.com forecasts home prices will grow at 3.9 percent annually, compared to an estimated 4.9 percent in 2016.
Fewer homes on the market and fast-moving markets. Inventory is down an average 11 percent in the top 100 metro markets, and it is not expected to improve next year. Homes are selling 14 percent faster.
Western cities will continue to lead the nation in prices and sales. Realtor.com predicts prices to increase 5.8 percent and sales to increase 4.7 percent in this region.
[More homes sold in the D.C. area last month than any November in the past seven years]
One prediction you can always count on: No matter what’s happening with the economy, NAR is always going to say it’s a great time to buy. Its fourth quarter Housing Opportunities and Market Experience survey found that 70 percent of people say now is a good time to buy a home. NAR also predicts the rate on a 30-year fixed mortgage will rise to 4.6 percent by the end of 2017.
Zillow says the homeownership rate will bounce back even as renting becomes more affordable. The real estate data firm also sees a reversal of a recent trend, predicting that “more Americans will drive in from the affordable suburbs for work, despite urban development efforts.” Its seven predictions are:
Cities will focus on denser development.
More millennials will become homeowners.
Rental affordability will improve.
Buyers of newly built homes will have to spend more to cover rising costs of construction.
The percentage of people who drive to work will rise for the first time in a decade as homeowners move farther into the suburbs seeking affordable housing.
Home values will grow 3.6 percent.
“Those looking for more affordable housing options will be pushed to areas farther away from good transit options, in turn leading more Americans to drive to work,” said Svenja Gudell, Zillow chief economist. “Renters should have an easier time in 2017. Income growth and slowing rent appreciation will combine to make renting more affordable than it has been for the past two years.”
Redfin predicts “strong buyer interest, better access to credit and a modest and much needed increase in inventory will allow home sales to grow but not as much in 2016.” The national real estate brokerage made six predictions:
The housing market will continue to grow but at a slower pace. Redfin expects median home sale prices to rise 5.3 percent annually in 2017 compared to 5.5 percent this year and existing home sales to increase 2.8 percent annually in 2017 compared to 3.4 percent last year. Although Redfin predicts inventory will be up slightly, it noted that “because we haven’t seen any increase in supply in the most affordable third of the housing market in more than eight months, we expect most of next year’s increase to be in the most expensive third of the market.”
2017 will be the fastest real estate market on record. Homes stayed on the market an average of 52 days this year, according to Redfin. It expects them to sell even faster in 2017.
New-construction growth will slow. Construction is “much lower than historical averages due largely to labor shortages. Given that nearly one in four construction workers are foreign-born, stricter immigration policies from the Trump administration are likely to make the problem worse.”
Mortgage rates will increase but not too much. Redfin expects mortgage rates to rise but no higher than 4.3 percent on the 30-year fixed rate next year
More people will have access to home loans. Next year, Fannie Mae and Freddie Mac will raise its loan limits for the first time since 2006, increasing them to $424,100 for most of the country and to $636,150 for more expensive markets. “This change makes it easier for more homebuyers to qualify for a mortgage in high-priced markets,” Redfin said.
Millennials will move to second tier-cities. According to Redfin, among the places millennials are looking to buy are Raleigh, N.C.; Austin; and North Port, Fla.
The Mortgage Bankers Association predicts mortgage rates will rise slightly but remain low, purchase applications will increase and refinance applications will decrease.
“Strong household formation coupled with further job growth, rising wages and continuing home price appreciation will drive strong growth in purchase originations in the coming years,” said Mike Fratantoni, MBA’s chief economist.
MBA expects rates on the 30-year fixed rate mortgage to remain below 5 percent through the end of 2018.
“Historically low and, in some cases, negative rates around the world continue to put downward pressure on long-term U.S. [bond] rates, keeping them lower than the domestic growth environment would otherwise warrant,” Fratantoni said.
Many times over the past few years the refinance boom has been declared over only to have world events conspire to revive it. Although he adds a caveat to his expectation, Fratantoni said he expects fewer refinances in the coming year.
“The world is an uncertain place, and there is always a chance that rates could drop again in response to global turmoil,” Fratantoni said. “But we expect that refinance volume will most likely be much lower over the next few years as homeowners have repeatedly had the opportunity to lower their rates, and there will be fewer households with an incentive to refinance if rates follow the path we are projecting.”
Next year will likely remain a seller's market in most markets, but buyers might have their day in 2018 or 2019.
Future buyers will be "less white and a little younger."
In some years and some markets, the answer is obvious — in 2016, Denver was a seller’s market, and San Francisco’s been one for quite a stretch.
But sometimes, it’s not so clear, and with mortgage rates on the up-and-up and robust plans for the economy ahead, all the plans for 2017 seem to be out the window.
Here’s what four economists had to say about whether 2017 is leaning toward buyers or sellers.
The consensus is?
Most economists we talked to said that overall, they thought 2017 was going to continue to be a strong market for sellers — for now.
“While I expect inventory levels to rise in 2017, it will likely remain a seller’s market,” said Matthew Gardner, chief economist at Windermere. “New construction will pick up steam in 2017, but not to levels that will provide sufficient support to a stretched housing market. Sellers will likely find that it will take a little longer to sell, but demand will still outstrip supply on the back of a job market that continues to tighten.”
Svenja Gudell, chief economist at Zillow, opined that “2017 is probably going to skew more toward the seller’s market — most markets will skew more toward seller’s markets, and even in the Midwest there are probably more seller’s markets than buyer’s markets compared to their own history.”
Geography does play a role, however, said Jonathan Smoke, chief economist at realtor.com.
“Ultimately, I do think it depends on where you are in the country — and not even at a market level,” Smoke said. “We’re seeing some clear patterns emerge within markets — one might be slowing down and cooling off where another part is really heating up. Real estate is so local that I would argue that a neighborhood view is really where you can see the differences and disparities and changes that are occurring around the country.”
Smoke noted that first-time buyers have been most successful in the Midwest this year, whereas markets in the West have seen the most significant price appreciation, making it difficult for first-time buyers to find success.
“We tend to have markets that are either above average in price expectation or sales expectation, and there aren’t many markets that have above-average expectations in both — supply constraint is driving the price movement in the strongest price markets, seller’s markets, but the buyer’s markets where buyers are getting a really affordable home, as a result, those markets are seeing a greater growth in sales,” Smoke explained.
“Either one is good for real estate,” he concluded.
Will we see a shift?
Gudell said that Zillow had just asked a panel of experts — more than 100 economists — “what they thought was going to happen to the tradeoff between buyers versus sellers.”
She said that among the economists surveyed, the most popular belief was that in 2018 or 2019, the bulk of markets will begin to shift from seller’s markets to buyer’s markets.
“In some markets, it’ll start to turn already in 2017, where demand isn’t quite so high and you get a little more inventory in and you have buyers better able to negotiate,” Gudell added.
What does the future buyer look like?
Mark Fleming, chief economist at First American, said that, “assuming an environment with modestly and predictably rising mortgage rates, it becomes a first-time homebuyer purchase-oriented marketplace.
“The question as a real estate agent is, how do you find and market to that first-time homebuyer?” asked Fleming. “Because that first-time homebuyer is going to be a young, technologically savvy millennial — and even more importantly, ethnically diverse. The demand for first-time housing is going to come from a different kind of individual than we’ve traditionally seen: Young, diverse, technologically savvy and much more likely to be college-educated.”
“The homeownership rate will grow, and they’ll be less white and a little younger,” said Gudell.
“Unfortunately, I think all of us will be spending more time in the car as more people have to look for more housing outside the city center as homes become much more expensive in the urban area,” she added. “During the recovery, it’s really picked up and the urban centers have appreciated much faster than the outerlying areas.”
“The potential is there for the market to have the most first-time buyers — certainly on an absolute volume basis, but also on a shared transactions perspective,” said Smoke.
“For the industry, this is the biggest shift we need to be able to contend with because it likely means elongated length of time that people are spending in that journey, especially the first-time buyer, but it potentially also means higher cancellation rates and lower conversion rates. You’re going to have more challenges with people contending with needing to qualify for and buy a home in the environment we’re in now than in the environment we were in the last two years.
“Highly qualified pent-up demand has been driving the market — now, it’s more organic activity at a time when interest rates are on the move-up,” he added. “The potential is there for an even bigger year than we’re forecasting, but it comes with challenges and that’s why we’re expecting only moderate growth instead of huge growth.”
“The thing about housing is that everybody needs it and you can’t outsource it,” said Fleming.
Real estate investing carries a certain degree of risk, but it also has the potential to be very rewarding. One factor that may contribute to your success as a property investor is the ability to adapt when necessary. Staying abreast of the latest developments and trends in the commercial and residential markets is important if you want to stay ahead of the curve. As 2017 looms on the horizon, here are the most significant trends that may impact real estate investors in the near future.
1. Drone Technology Takes Off
Earlier this year the Federal Aviation Administration (FAA) approved the use of drones in commercial activity. For real estate agents, that opens the door to new possibilities in terms of how they show available properties. That also expands the scope of how investors are able to vet homes, office buildings or other potential investments.
A drone video feed could allow you to view a property from every possible angle without having to see it in person. You can check for any possible defects in the structure that are visible to the naked eye before moving on to a more in-depth inspection. That could save you time and money in the long run if the drone video exposes a serious flaw. (For more, see Delivery by Drone: New Rules for Flights.)
2. Global Economic Growth May Be Muted
In terms of the worldwide economic forecast, the global economy is expected to grow by 3.4% in 2017, according to the International Monetary Fund (IMF). While that’s an increase over the 3.1% growth rate for 2016, it still represents a slight downgrade of the IMF’s original forecast. That was triggered by a dampening of the economic outlook in the wake of the U.K. Brexit and a U.S. economy that didn’t grow as quickly as initially expected. (For more, see Brexit's Effect on the Market.)
While global markets were shaken after the recent presidential election, they’ve more or less rebounded. However, now that the Federal Reserve has raised interest rates by 0.25%, the second increase in a decade, there may be a dampening effect on stocks. Taken together, those factors could work to quell the real estate market to a degree, as well. Investors may need to consider how foreign markets may be affected by a global slowdown and what that could mean for U.S. real estate.
3. New Home Construction Will Regain Steam
After a period of slowdown, 2017 looks like it may be the year that housing starts begin to climb once again. Kiplinger’s predicts that single-family-housing starts will rise 11% in 2017, up from the 9% increase estimated for 2016. With inventory 4.3% lower than it was a year ago and home prices continuing to rise, there’s an opportunity for builders to fill the gap in demand.
Commercial construction is also expected to see some positive growth in the new year. According to Dodge Data & Analytics, U.S. construction starts will grow by 5% for 2017, totaling $713 billion. That’s an improvement over the 1% increase in commercial construction reported for 2016, although it falls short of the 11% gain reported in 2015. While the increases on both the residential and commercial sides are modest, they’re still a positive for investors whose focus is on ground-up properties.
4. Optionality Will Reshape the Way Properties Are Used
The sharing economy has had an impact on the way people work, vacation or simply catch a cab, and it’s also leaving its imprint on the real estate market. According to the Urban Land Institute (ULI), optionality is adding a new dimension to the way that property investors – and their tenants – define the use for a particular space.
Co-living is perhaps the most visible example of this phenomenon. Companies such as Common, WeLive and Commonspace are putting a new spin on apartment living by offering units that combine private living space with communal areas for cooking, dining and socializing. A 2017 forecast for the U.S. and Canada done by ULI and PWC features optionality front and center as developers seek to identify the best use for investment properties. (For more, see Is Cohousing Right for You?)
The Bottom Line
These are just some of the things set to influence commercial and residential real estate in 2017, and they may afffect some investors more than others. As the new year gets underway, reviewing your property investments while analyzing your goals for the next 12 months is a wise move. Understanding what trends are poised to take off can make it easier to spot potentially valuable investment opportunities going forward.
While some employees are on their boss’ naughty list, it’s obvious that the employees at Keller Williams’ headquarters have been especially nice this year.
This morning, KW executives surprised their team of 245 employees with more than $5.6 million in profit-share checks as a way to say “thanks” for a year of robust and solid growth.
“Our team has worked really hard to help our company set all-time monthly records every single month this year. We’re a private company, so Profit Share comes directly out of our owners’ profits,” said CEO Chris Heller in a statement.
“And our owners are so appreciative of everything our team has accomplished that they want to thank our people in a big, truly life-changing way.”
Specifically, the team will receive $5,628,585.13 — a whopping 48 percent increase from last year’s check that totaled $3.77 million. Furthermore, since November, the company has distributed $143.1 million in profit shares to their employees across the globe.
For salaried employees, the average profit share check will amount to 35 percent to 37 percent of their base salary. That comes out to a check of at least $12,600 for an employee making $36,000.
“The reaction all throughout our offices were big ‘Kool Aid’ smiles and hugs from leaders as the live profit-share checks were issued on a one-on-one basis to all 245 of our team members in our headquarters office in Austin, Texas,” said KW spokesperson Darryl Frost about the event.
KW Co-Founder and Chairman Gary Keller and early company leaders said they created the profit share program “to ensure the goals of the company’s owners and agents remain permanently aligned.”
“When Gary Keller started this company, he understood that the higher law of business is to give back to those who help you succeed. And when you’re part of a team, you’re part of a team,” said KW President John Davis.
“We’re so honored to get to lead with such a talented group of people to help our 150,000 agents fund their lives and create opportunities for their families.”
After the Fed’s interest rate hike this week, Bay Area real estate agents said they expect buyers will want to lock in historically low mortgage rates while they still can.
ByRICHARD SCHEININ | email@example.com
PUBLISHED: December 16, 2016 at 12:42 pm | UPDATED: December 16, 2016 at 6:23 pm
Now that the Federal Reserve has pushed up interest rates for just the second time in a decade, what does it mean for mortgage rates and the housing market?
It depends on who’s reading the tea leaves.
Some Bay Area brokers anticipate the rate hike will spur prospective homebuyers to lock in historically low mortgage rates ahead of more Fed boosts in 2017 — even though mortgages aren’t directly linked to the Fed’s benchmark rate. But rising rates could make owners with already low rates wary of selling.
Real estate agents and brokers are hoping the Fed’s rate hike this week will be a catalyst for buyers’ fear of missing out, soon driving them into the market.
“It’s going to stimulate the market” in the coming months, said William Doerlich, president-elect of the Bay East Association of Realtors. “Buyers who’ve been sitting on the fence, going, `Is it time? Is it time?’ — this is going to be the little kick in the butt that says, `Hey rates are starting to go up. We better get ahead of the curve, we better get out there or we’re going to lose some of our buying power.’”
SJM-RATEHIKE-1216-90 But one economist said it’s impossible to predict the psychology of buyers and sellers in this new environment: “It could be that people who are locked in to low mortgage rates are going to be reluctant to sell,” said Alexander Field, professor of economics at Santa Clara University’s Leavey School of Business. “Because they’ll lose the benefits of those low rates” when it’s time to go looking for a new house.”
It can be notoriously tough to forecast trends in mortgage rates with precision, but the smart-money investors may have already placed their bets.
Field pointed out that the mortgage market already had responded to the Fed’s anticipated adjustment of the nation’s benchmark rate before it happened. Astute buyers, he said, would have been off the fence prior to Wednesday’s announcement, which raised the nation’s benchmark interest rate by a quarter of a percentage point. “It would have been smart in retrospect to buy that house in October.”
Especially in the Bay Area, where the median price of a single-family home is often painful: $499,000 in Contra Costa County; $702,500 in Alameda County; $940,000 in Santa Clara County; and $1.268 million in San Mateo County, according to a report last month by the CoreLogic real estate information service.
After bottoming out at 3.47 percent in late October, the average rate on 30-year fixed-rate mortgage loans ticked up to 4.13 percent last week. That could prove to be the motivation for potential buyers that Doerlich anticipates.
But the increase is still a relatively modest one. Even amid speculation about what the incoming Trump Administration’s economic policies might be, mortgage rates have simply returned to approximately where they were before the Fed’s previous increase in 2015. (That was its first increase since 2006.)
Mortgage rates don’t necessarily rise and fall with the Fed. In fact, they are more closely tied to the rates on long-range bonds, including 10-year Treasury bonds, which are widely regarded as safe investments when international markets rumble. After the Fed raised its marker in 2015, mortgage rates rose a bit, but then fell – and fell some more, post-Brexit, as shaken investors stowed their money in Treasury bonds.
The Fed, which is expected to raise the benchmark rate two or three more times in 2017, is trying to “preemptively nip the possibility of a resurgence of inflation — nip it in the bud,” Field said.
This leaves mortgage lenders in an unenviable spot: “If they don’t correctly forecast the inflation rate and the inflation rate turns out to be higher, then the lenders lose and the borrowers win,” he said.
Should lenders continue to raise mortgage rates, then homebuyers, of course, will be faced with bigger monthly payments, as will owners who hold adjustable loans.
That could dampen the demand for homes — though Field said demand could remain steady, “if the economy remains reasonably strong and the unemployment rate remains low and people are reasonably sure of their jobs. And then if Trump starts big deficit spending with infrastructure projects and tax cuts to stimulate the economy — that could counteract the negative effect of rising mortgage rates on the demand for housing.”
Chris Trapani, founder and CEO of the Sereno Group residential real estate sales firm, said he believes the housing market will be sparked in the short term by the Fed’s move and the recent mortgage rate increases.
After living for years with low interest rates, he said, “people just kind of came to expect that rates would be at 3 or 4 percent forever, and I think that kind of lulled some buyers to sleep, in a way. Because they didn’t feel any urgency to get a loan. Now they’re thinking, `Well, wait a minute, I’d better get out there and lock it in.’”