WASHINGTON, D.C. — A panel of industry executives, speaking at "Power Broker Forum" during a real estate conference last week, recommended the development of specialized niches, a greater focus on training and traditional marketing techniques, and aggressive approaches to combating negative news as strategies to weather the current market.
"We’re the most entrepreneurial people left in the world. Every morning we wake up unemployed," said Larry Knapp, president and chief operating officer for Alain Pinel Realtors, a luxury brokerage company operating in the San Francisco Bay Area region.
"Whatever has come along our industry has learned to deal with it," he added.
Knapp spoke during the "How to Survive & Profit in Today’s Tougher Market" panel that was produced by RISMedia, a real estate research and publishing company.
Part of the battle these days for real estate professionals is in countering national real estate news reports about the housing market slowdown, Knapp said, adding that his company works to put local real estate market statistics into the hands of its agents to better inform buyers and sellers about actual conditions.
There are many agents working in the industry these days who have never witnessed a market downturn firsthand, Knapp said, and his company has hired trainers to help its manager and sales force adjust to the changing environment and return to business basics.
Agents who have worked a short time in the industry may "think that this is the end of the world," Knapp said of current market conditions, and it’s up to brokerage companies to help them understand that the market cycles back every decade or so, "and almost certainly will be back going stronger."
"Whatever strength you have in this market — focus on what strengths you have and take advantage of them. We were fortunate to have a strong lender (partner) who kept making loans when others weren’t," he said, as an example.
Knapp said that his company had paid for advertising in local newspapers to point out that the local market was faring well in comparison to the U.S. market as a whole.
Kate Rossi, president and CEO for Coldwell Banker Residential Brokerage in Connecticut and in Westchester, N.Y., said she often hears about getting "back to basics" in the current market environment, though she said the trouble is many agents don’t know what those basics are.
"Agents are stymied because they have no idea what the basics are. They have no idea how to prospect, how to present and how to price," she said.
The company has worked to compress the presentations its agents deliver to prospective clients to about 20 minutes in length, and to make the presentations available live or available over the Internet.
Rossi also said that while new technologies are available for real estate professionals to incorporate into their businesses, there is a fear factor associated with some new technologies. "The technology is fabulous but everyone is afraid of it."
When the market begins its next ascent, it may have a different face, said John Tuccillo, an industry consultant.
"The next real estate market is going to be younger and it’s going to be more technologically hip," he said, and real estate professionals are still graying as a group and run the risk of growing out of touch with younger consumers.
The typical Realtor is over 50, he said. "The population (of real estate agents) has doubled, yet that age hasn’t changed. the world is getting younger and the real estate profession has not, and I think that is a problem. You’ve got to get younger, quicker."
There are different ways to recruit and to manage younger agents, he also said. While the industry has spent a lot of attention on baby boomers and their real estate wants and needs, the "Generation Y" crowd represents another huge demographic group coming through the housing pipeline, he noted.
There are new communications tools to connect with prospective clients, Tuccillo said, and newspapers and other traditional media are feeling the heat of the new wave. "The fact is the old channels of information are dead. You can stand up here and rail against newspapers and rail against radio … but you’re poking spears into a dinosaur. They’re dead, they’re toast."
Ed Krafchow, president of Prudential CA/NV/TX Realty who served as a moderator for the panel discussion, encouraged real estate professionals to seek out niche markets in building up their business during this period in the market. "Niche players are clearly developing faster than non-niche players," he said.
Several panelists referred to the buyers who say they are waiting to purchase until the market hits bottom, and this stalling effect has "clogged the pipeline" with an inventory of for-sale properties that aren’t selling.
Allan Dalton, former Realtor.com president who participated in the panel discussion, said that the industry tends to demonize those buyers who are looking for a great deal on a home by referring to them as bottom-feeders or scavengers.
Instead, he said, the industry should embrace those deal-seekers and encourage them to get into the market.
"The crux of consumer confidence is not with sellers, it’s with buyers," Dalton said. "We are not prepared to be realistic with buyers," he said, as "we also are alternatingly work with sellers. We’re afraid to alienate the sellers."
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