Peter Hernandez, the founder of Teles Properties, discusses industry decay, global events and why he thinks there will be more business to go around in 2015.
Peter Hernandez is the founder, president and broker of record at Teles Properties.
Are you optimistic about 2015?
We are very optimistic. While we have seen a huge bounce up in prices from the bottom of the Great Recession, the number of transactions have not been as strong as in previous recoveries. Inventory has been anemically low. We feel prices will increase more moderately and the number of transactions increase significantly. Our markets are robust, and we have seen an increase in buyers and multiple offers in many markets.
The economy has legs. Inflation and interest rates remain low, and employment and consumer confidence are both rising. Low interest rates bode well for affordable purchases. Europe and Asia are experiencing some problems, but we think the U.S. economy will continue to grow. Terrorism is the wild card.
The housing market?
The housing market’s best days are ahead if history repeats.
We were honored by Inc. 500 two years running as the fastest-growing real estate company in 2013 and 2014 in California. The Los Angeles Business Journal also recognized us for the last two years as one of the 100 fastest-growing companies in Los Angeles. Our price points and number of transactions are up, and our days on market down.
What are you worried about?
Terrorism and the potential of our economy being affected by the struggling world economies. Our political infighting also can lead to uncertainty.
How much do you fret about global events?
They work both ways … When there is turmoil overseas, it can negatively impact our economy, which hurts the housing market, but it also opens up new opportunities with the flight of capital from unsettled countries, and the markets where we operate are always first in demand.
Will mortgage rates go up or down next year?
As long as the Fed rates stay stable, we don’t expect wild swings, but as our economy improves we do expect some inching up of rates by summer of 2015.
Will home prices appreciate next year?
Yes, approximately 5 percent or more.
Will agents be more productive next year?
Yes, agents will enjoy increased production with the increased number of transactions. There will be more business for everyone.
Why? Or why not?
We are experiencing better economies and natural growth, and new, younger or foreign buyers coming into our markets.
Will the portals play a bigger role in real estate next year?
Of course, but there are wonderful ways to work with them to increase your sales. You need good insight into technology and the right people directing it.
What will be the biggest source of real estate leads next year?
The biggest source will be the Internet — Zillow, Trulia, realtor.com, Facebook, YouTube, etc. — but the highest-quality leads will be from face-to-face interactions that represent buyers and sellers who are further along in their process, and farming your sphere of influence.
Are you making plans to expand, contract or maintain your business this year?
We are still very much in a growth phase. Opportunities find us, and agent interest in Teles Properties is at an all-time high.
What is the biggest challenge for the industry in the coming year?
Ethical decay. Agents are undermanaged, and because we are self-policing nobody wants to report an agent who is doing something wrong and file a complaint — especially if that agent does a lot of business.