It may take more than a year for the housing market to climb out of this slump, but that’s no reason for real estate companies to stand still, said brokerage company representatives during an Inman News audio conference Monday.
Companies should continue to try new approaches and should not close the door to growth and opportunity, said participants in the “2008: Thriving in a Real Estate Downturn” audio conference.
“As the market has tightened up we’re looking at things with a magnifying glass,” said John Reinhardt, president of Fillmore Real Estate, a commercial and residential real estate company in New York City that has about 18 offices and 500 agents. But the company continues to grow, picking up about 25 agents and paying to acquire 1,300 property listings from Foxtons Inc., a real estate company that has filed for bankruptcy.
“We’re opening up an office on Friday in the Bronx, and looking at three other locations currently,” Reinhardt said. “When the market was great it wasn’t really that difficult to sell a home and the other brokers out there also did alright.”
There can be acquisition opportunities for companies that are not faring well in the downturn, participants also said, and for agents who are looking to switch to a company with more resources and support.
Sherry Chris, president and CEO for Better Homes & Gardens Real Estate, a new real estate franchise brand of Realogy that is expected to launch next year, said, “I would imagine that in every company agents have left the business because they’re struggling now. There are also some good merger and acquisition opportunities right now. Some brokers are putting up their hands and saying, ‘I’m not sure I want to be in this business anymore.'”
The big companies may get bigger during these lean times, as some companies may find the right time to exit. “There are people out there who want to buy real estate companies right there.”
Pat Lashinsky, CEO for brokerage company ZipRealty, said the company — which has operations in 32 markets and 18 states — plans to grow into two to four new market areas in the coming year.
The impact of a plan by lenders to assist up to 1.2 million borrowers with adjustable-rate mortgages headed for reset by allowing them to refinance or modifying their loan terms could have a positive effect on the market, the panelists generally agreed.
Lashinsky said that this program will “psychologically have an important role” on consumers, even if it’s direct business effects are not widespread. Any program that works to stem the tide of foreclosures may serve to reduce buyer fear about the state of the market, he explained.
“It’s probably not a bad thing, particularly if it helps stave off a recession, if it helps homeowners,” said Chris. “I’m not sure whether it’s going to have a huge impact across the country … but it’s probably not necessarily a bad thing.”
Reinhardt said the program could soften the blow of foreclosures, noting that there are a number of people who are headed toward foreclosure in the Brooklyn market.
Training programs and innovative marketing can be a differentiator in a downturn, the call participants said. Lashinsky said it’s important for companies to work on making their agents more successful in this kind of market. Providing the proper tools is also important, he said, and “the quality and speed of communication is paramount” in developing technology solutions.
He said that ZipRealty has worked on a tool that quickly generates comparative market analysis reports for both sellers and buyers to help agents in marketing their services to prospective clients.
Dabbling in new marketing programs and revisiting old ones is also advisable, Lashinsky said. “When you test (something new) there is a certain amount of risk that is inherently built into that.” And just because something didn’t work before doesn’t mean it won’t work now, in a different market environment, he said.
Agents should get traditional training as well as “Internet training,” Reinhardt said. His company encourages agents to be involved in online communities as well as their real-world communities, he said, as that can help them to build online and offline relationships with people that can lead to new business, either directly or non-directly. “Communication is always the key,” he said.
Social networking and blogging sites can assist agents in reaching out to consumers, Chris said, adding that she expects these tools to become increasingly important in reaching the younger generations of home buyers and sellers. “I think that social networking is going to be a significant part of real estate in the years to come,” said Chris, particularly with the shift in demographics.
She said that blogging and social networking sites allow agents to build a long-term relationship with consumers, as the Internet empowers them to search for real estate information at a very early stage in the home-selling or home-buying process.
Reinhardt said his company posts property information to NewYorkTimes.com, Trulia and craigslist.org to multiply the audience. “Things like that don’t necessarily cost a lot of money,” he said, though they can pay off in generating leads.
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