Chasing opportunity in downturn
Realtor Notebook
By Teresa Boardman, Thursday, December 17, 2009.
Flickr photo by boboroshi.This will be the first time I have ever made predictions for the next year.
I am going to go out on a limb with these, and maybe 12 months from now I will have a good laugh (I don't mind if my readers start laughing now):
In 2010, something will happen that no one can anticipate right now, but it will affect our industry and our predictions.
Next year will be like 2009 when it comes to innovation in the real estate industry: There will again be little or no innovation, just more companies developing products that we don't need but that are improvements upon the products that they rolled out last year that we didn't need.
There are always agents and companies that buy the shiny things as they struggle to survive.
We will continue to pay third parties to display our listings on the Internet, and we will continue giving them away for free until 2015, when we will have figured out that our listings are like currency.
By 2016 we will make third parties pay to display our listings. Consumers will still be confused and struggle to find accurate information about homes for sale, and third-party sites will continue to insert themselves in between Realtors and consumers. They will be disintermediated when they stop making money off of our listings.
The real estate market won't "crash" like it did in 2009, but it will remain very stagnant. Home values will go down but at a much slower pace than they did in 2009. The tax credit is responsible for the current increase in home sales and the uptick in home prices. It is not sustainable and will not manufacture new buyers and sellers.
Prices will also be impacted when the second wave of foreclosures hits and the inventory of homes on the market goes up. The pool of prospective buyers in 2010 will go down because of high unemployment, tougher lending standards and the number of would-be buyers who can't buy because they went through foreclosure in 2008 or 2009. ...CONTINUED
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Submitted by Chris Freeman on December 17, 2009 - 1:27pm.
Well, I was hoping to laugh at some outlandish prediction, but unfortunately for humor's sake, thought you were pretty spot on.
Chris Freeman
Chief Technology Officer
WOLFNET www.wolfnet.com
Submitted by Larry Whited Sr. on December 17, 2009 - 1:41pm.
Well said Teresa and I agree with most of what you say.
As the market recovers it will be back to the basics, one agent meeting one client at a time. Our expertise will win their loyalty and grow our personal business.
How many face books friends you have misses the point. It will be about the quality of your service not the quantity of your post, blogg or tweets.
As my Marine Corps drill instructor used to scream; lead, follow or get the (fill in the blank) out of the way.
It is time to charge into the next decade…Take no prisoners!
Larry A. Whited, Sr., CRB, CRS, GRI
President & Founder
www.maxUnet.com & www.WebMLS.net
A Virtual Real Estate Franchise System
** We will sell your home for as little as 2% + $500. Includes full service and MLS **
P.O. Box 757
West Chester Ohio
Submitted by Joe Loomer on December 17, 2009 - 2:14pm.
As much as I tried to argue with some of your points, they're just too valid. EXCEPT:
The advent of RPR and Google's dabbling will change the way the game is played. Once the RPR monster starts rolling, you just won't be able to stop it. This will be THE innovation of 2010.
The market cannot recover on the heals of the HVCC, TILA, HUD, GFE changes, and the soon to come increase in the FHA downpayment requirement with a simultaneous reduction in allowable seller contributions.
It ain't going to be pretty - but perhaps it'll just suck a little less than the first half of this year did.
Augusta GA Homes
Joe Loomer, USN Ret.
Assistant Team Leader
Keller Williams Realty Augusta Partners
"Navy Chief, Navy Pride"
Submitted by Barry Noble on December 17, 2009 - 2:41pm.
Teresa - in that you have expressed a "Common Sense" approach to 2010 based on stats known now, you are pretty well spot on. Foeclosures and job losses will be the biggest negative of 2010.
In some areas, where values have dropped to about 50% of 2005 inflated values, the "bottom picker" investors are already staking out their territories to buy, buy, buy and at even lower rock bottom prices, They'll make low ball offers, quote the negative foreclosure and unemployment stats to the prospective seller and "steal" the homes for super bargain prices, for short term (24 months) rentals then resales, at a good profit,but not as much as 2003 to 2004 inflated sales were.
The Brokers, Agents and Certified residential Appraisers who realize integrity is the key to the next cyclical Market upswing, will survive and prosper, starting in 2010, but not to the income extent of those who abused the system and pressed-up the inflated values to balloon bursting point. The profits to be made in the next four years will be honest earnings and integrity will be a key element.
The Buyers of 2010 through 2012 will be far more knowledgeable that those of 2002 through 2005. The internet has something to do with that. Realtors will have a big role still to play in home sales, but the "fly-by-nighters" will be easily distinguishable for discarding, from the good, hard working and honest agents and brokers.
A good knowledge of the computer, for marketing and sales help, will be key to the 2010 to 2012 agents and brokers - as hand-helds and phones take the place of even the laptops soon. Hey, as an Certified residential Appraiser, as well as a Broker, I can already do my appraisal sketch of the house - on my IPhone and just upload it instantly to my appraisal program in the office!!!!
If there was one wish for 2010, it would be to see buyers and sellers agents on each side of a purchase agreement, and no double-sided sales. Integrity should make that mandatory.
Barry Noble
State Of California
Certified Residential Appraiser
and Broker
http://www.MyPropertyIsWorth.com
(760) 992-9523 Palm Springs, CA
Submitted by Kathy Drewien on December 17, 2009 - 3:11pm.
I predict you are correct.
Just today I heard a group of agents expressing outrage, "A 3rd party company is now charging us to list our properties on their site." Why, oh why, do agents continue to expect something different?
Banks may finance mortgages, and yet they will expect the borrower to be gainfully employed or have deep pockets. Most of the people I know are fearful of losing their job; if they have not lost it already.
Practitioners and brokers who plan to stay in business throughout 2010 will be wise to innovate.
Submitted by Elaine Hanson on December 17, 2009 - 3:31pm.
Standing Ovation over here, Teresa! You have put the right concerns in front of us. I think you are dead on with concerns about the unemployment rate and the further decline in housing price. I also commend you for pointing out that business as usual, even if only for the last couple of years, will be changing and the hard working innovators who know this professional and act as professionals will be moving forward. Consumers have learned a lot over the past few years and will be demanding knowledge and service - as they should. We need to be ready to fully meet their needs.
You're not pessimistic - you are realistic. You calls 'em like you sees 'em and you have pretty great vision. Thank you!
Submitted by John Rakoci on December 17, 2009 - 5:01pm.
Actually, you are sounding conservatively optimistic. There is no reason for unemployment to change direction, actually there are reasons to expect it to much worse. Without a job or the thought a job may disappear will eliminate many possible buyers. Anyone believe companies forced into health care costs they can not afford will be hiring? Any one believe when 'cap & trade' increases residential & business electricity costs jobs will suddenly appear in the US? As taxes on everyone rises to pay for the 'stimulus' ....... the picture is not rosey but the pent up demand and investors will make it a better year than '09 - but not much.
Submitted by Albert Clark on December 17, 2009 - 6:39pm.
Hi Teresa, your one comment stuck out
"The tax credit is responsible for the current increase in home sales and the uptick in home prices. It is not sustainable and will not manufacture new buyers and sellers."
Admit it will be hard for a new extension in the end.. but last month 47% sales went to first timers.. Is that "manufactured demand". Those renters bout SOMEBODY's House, now that person has to buy someone's house..and.. Get my point? The multiplier effect
Keep up the compelling commentary
Albert Clark
Home Actions Relationship Platform
Scranton, PA
570 510 3507
aclark@homeactions.net
Submitted by Ninah Hunter on December 17, 2009 - 6:55pm.
Sounds like guarded, conservative but sound optimism to me, which I applaud. After a panic-stricken first quarter of 2009, it's ending in the best year I've had in the last three. And that's a relative term, because I'm still limping along financially. BUT those of us surviving, companies and agents alike, who get it will reap the benefits, and so will the consumer. Because that is who we ultimately serve, while we do still have something of value to offer. Technology and the internet are great tools, but not a panacea or replacement to knowledge, experience, skill, service, communication, and high touch relationship building skills that can still be achieved without 'em. Your admonition to coaches and consultants if very insightful. I do consider them a valuable resource. However, I've often wondered why so many of them, who have been hugely successful as real estate agents, didn't just stay in the business. Could it be that they recognize that the vast majority of real estate agents are looking for a quick fix or route to success without the investment in time, money, education, effort, business development, and honest service to the consumer? My guess is "yes" and so I predict they will continue to be in demand and quite successful, especially those who do reinvent themselves and come up with new innovations, just like we real estate professional need to do.
Broker Owner
CENTURY 21 Action Realty
Montrose, Colorado
Submitted by Jay Zenner on December 17, 2009 - 7:04pm.
Very interesting perspective. However, our listing data will never have the value it once had. The data was never the product, it was part of the distribution system and the evolution of the internet has changed that game completely. While the "thought leaders" are mulling over new brokerage models the real action is on the ground where working agents operate. What can I do to better market my client's home? It's not a matter of innovation as much as the acquisition of some basic marketing skills for selling products, in our case, homes. During the boom everything sold eventually and marketing was minimal. The competition is now on the seller side. By basics I mean proper pricing, good copy writing, good photography, staging, putting that listing information in the right places in an a compelling way, etc. The trend towards more and smaller offices will continue as agents become more sophisticated and the smart ones realize that readily available easy to use tools and more focus on niches will mean more riches if done independently from the large offices with high overhead. That will mean more pressure on commissions as low cost brokerages compete on price. In fact, fee for service will continue to grow as an option and the best fees will go to those with the best skills just like it is in lawyering and accounting and other professions. Generalizing about the national economy is almost pointless. Some areas will do much better than others in 2010. The only prediction I feel confident about is that it will never be like it once was when most of us learned the business.
Jay Zenner
http://4PsRE.com