Real Estate Trends Session 2008
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Real Estate Trends Session 2008

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Sales meeting presentation on trends in the real estate business

Sales meeting presentation on trends in the real estate business

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  • 1. Good Morning Ballantyne “ Any type of real estate market is always good for someone.”
  • 2. Current Trends in Real Estate
    • CRRA Trends Session facilitated by Jerry Matthews
      • May 7 th and 8 th
      • 8 presenters via teleconference and visual aids
      • CRRA/CMLS Officers and Directors
        • 2008 Candidates
      • An opportunity to interact with some of the most sought after “influencers” in the real estate space.
      • Preparation for the Strategic Planning Retreat, June 18 th and 19 th
      • “ Real estate professionals may need to rethink their assumptions in order to be sure they are still providing services that their customers want.”
  • 3. Current Trends in Real Estate
    • Member Survey
      • 11,157 surveys, 2,041 responses = 18% response rate
      • Significant observations:
        • “ My membership in CRRA provides good value for me.” 71% Agree or Strongly Agree
          • 12% of Brokers (non-owners) Disagree or Strongly Disagree
        • CRRA keeps me well informed on government actions that affect my business.” 77% Agree or Strongly Agree
        • 27% of members made $20,000 or less, 37% made $30,000 or less
        • 20% of Salespersons made $10,000 or less, 33% made $20,000 or less, and 44% made $30,000 or less.
        • Members making $20,000 or less have household income of $40,000 or more
        • Members making $30,000 or less have household income of $60,000 or more.
  • 4. Current Trends in Real Estate
    • Member Survey
      • Significant observations:
        • 45% of members have been in real estate 5 years or less
        • 67% of members have been in real estate 10 years or less
        • 53% of salespersons have been in real estate 5 years or less and 73% have been in business 10 years or less.
        • “ CRRA’s stance on political issues represents my point of view”, only 44% of members Agree or Strongly Agree. 17% of Broker/Owners Disagree or Strongly Disagree.
        • “ Volunteering for CRRA is important to me”, 21% of members Agree or Strongly Agree with 21% Disagree or Strongly Disagree. 58% are neutral.
        • 61% of respondents and 64% of sales associates are female.
        • 73% of respondents are sales associates.
        • 52% of respondents are Republican, 28% Democrat
        • 42% of respondents are with single office firms and 71% are in firms with 5 or fewer offices
  • 5. Current Trends in Real Estate
    • Member Survey
      • Significant observations:
        • Highest rated services: MLS, CSS, Professional Standards, Code of Ethics, Education, Professional Development, Public Awareness, Realtor image campaign
      • Comments
        • “ new square footage range is unprofessional, inaccurate, and driven by lazy, incompetent agents”
        • “ Tempo MLS is antiquated and not really web-based. Not compatible with devices and software today…”
        • “ CSS not efficient or responsive in timely manner. Service and fee were forced on membership.”
        • “ CRRA dues and MLS fees seem high compared to contiguous Associations.”
  • 6. Current Trends in Real Estate
    • John Tucillo, Ph.D., JTA LLC, consultant
    • Credits:
      • Former Chief Economist for NAR
      • Clients; FNMA, Microsoft, FNIS, GMAC, PREA, Re/Max, Cendant, Ellie Mae
      • “ Eight New Rules of Real Estate”, “Click and Close”, “New Business Models for the New Economy”
    • Next 2 quarters 1% growth in economy
    • Real income fallen 2% since 2006 (hidden by home equity piggy bank)
    • 2009 economy will recover but with inflation !
      • driven by commodity prices, weak dollar, liquidity crisis
      • Long term rates will rise 2%
    • Pent up housing demand will begin to emerge in 2009
    • Demographic trends will shape housing going forward
      • Understand generational differences
      • Watch how consumers use technology
    • Going forward emphasis will be on “managerial talent”
  • 7. Current Trends in Real Estate
    • John Tucillo, Ph.D., JTA LLC, consultant
      • How to spot a turnaround market:
        • DOM begins to fall
        • Sales price to list price going down
        • Drop in new listings
      • Generational differences affect real estate business
        • Boomers: little distinction between work and personal life
        • Gen X: give me what I want…now!
        • Gen Y: gotta be me!, get a life
        • Real Estate must change the way the business is conducted
          • Lots of implications for Boards of Realtors
        • Get younger faster! Go where the consumer is going…it’s expected!
          • Consumer is more and more ahead of the real estate professional in pushing the envelope of technology.
  • 8. Current Trends in Real Estate
    • Stephan Swanepoel, Futurist
      • Credits: Swanepoel Real Estate TRENDS Report, “Real Estate Confronts Reality”, “Real Estate Confronts the Future”
        • CEO Realty U, Inc., CEO iSucceed, Inc., CEO CreateAPlan Inc.
    • Top 10 Trends
      • Shattered Glass (women, youth, minorities step up to leadership)
      • 9. Thought Reform (DNA of the “new” real estate professional) (transparency)
      • 8. Clash of the Titans (big get bigger…common good?)
      • 7. Tug of War (niche models…The Long Tail)
      • 6. Gone in 60 Seconds… (data theft is rampant)
      • 5. Search for Productivity (agent productivity continues to fall despite technology)
      • 4. Four weddings and a funeral (the future of MLS?)
      • 3. New digital economy (evolution of the web…Web 2.0)
      • 2. Pop goes the weasel (bubbles burst!)
      • 1. Two worlds, One history (online communities, blogs, wiki, social media)
  • 9. Current Trends in Real Estate
    • Justin McCarthy, Google Strategic Partner Development Team
      • Credits: formerly with DoubleClick, General Manager, Entertainment & Travel Networks, NY Times and Hartford Media, BA English Trinity College
    • 250,000 real estate searches per hour = 6,000,000 per day = 21 billion per year
    • Google attracts 60% of all real estate searches and 36% of all agent or broker searches
    • Google Base; view listings directly as opposed to going to Broker/Agent sites
      • Mapplet interface with social overlays (Google Gadgets)
      • “ Permissioning” (getting free content feeds)
    • Virtuous User Cycle
  • 10. Current Trends in Real Estate
    • Ed Krafchow, Pres. Prudential CA/NV/TX Realty
      • Credits: 5,000 agents, 139 offices, $14 Billion sales, 8 th largest privately held company in USA
    • Stop trying to “train” the customer
    • No industry ever re-invented itself in an “up” cycle
    • We’ve become “generalists”
      • New appeal is to the niche markets,
        • “ specialists” starting to prevail
      • Are you prepared to niche down?
        • Positioning is key!
      • Can you meet the experience expectation ?
    • From “content” to “context”
      • From text to mapping, Google Earth is “contextual”
      • Crafting the consumer experience…less onerous and more like entertainment
        • What is the secret to Car Max’s success?
      • Where does the professional sales associate fit in this picture?
  • 11. Current Trends in Real Estate
    • Ken Jenny, CEO TranCen.com, consultant
      • Credits: former Sr. VP PREA, COO Coldwell Banker, NA
    • “ In times of change, it might be a good time to change.”
    • Market goes normal (60% of the old market is still there)
    • Cycles are a reality and predictable
    • Lending with Caution! (lax lenders penalized)
    • Consumers freeze! (industry adopts a “deer in the headlights” posture)
    • Painfully operated brokerage (many sins uncovered, kingdoms expensive to operate)
    • Industry shrinkage (it’s all about the math!)
    • Media evolution (online, offline vs. inline ) consumers transition speedy
    • Enie, meanie, minie, GO!
    • Internet calls are not LEADS!
    • The never ending transaction: taking
    • customers for life to a whole new
    • level.
  • 12. Current Trends in Real Estate
    • Shannon McIntyre Skousgaard, Ph.D., George Mason Univ
      • Credits: US Chamber of Commerce, NAR, IBM, Xerox, AT&T, German Marshall Fund, “Decision Making for Incompetent Persons: The Law and Morality of Who Shall Decide”
      • “ We are what we repeatedly do.” This is our culture.
      • In Western culture all persons have infinite worth and dignity.
      • Integrity is the foundation of culture
      • What is a Profession?
        • Body of knowledge
        • Knowledge that serves the good of individuals and the common good
        • Standards of excellence are elected and set by the practitioners
        • These standards are enforced by the members
      • If the standards are not enforced by the group…someone else will!
  • 13. Current Trends in Real Estate
    • Shannon McIntyre Skousgaard, Ph.D.,
    Knowledge , skills (short term) Ethics (long term)
  • 14. Current Trends in Real Estate
    • Richard Mendenhall, Chairman International Consortium of Real Estate Associations
      • Credits: former President NAR 2001, owner three real estate offices, family business since 1894
    • Is the Realtor at the center of the transaction?
      • “ The Realtor must be at the center of the conversation , not the center of the transaction.”
      • “ If you wait until the transaction, it’s too late. Consumers are establishing relationships earlier online.”
      • A trusted advisor is at the center of the conversation about real estate well before someone lists or buys.
    • “ Get your mind right!”
      • $36 billions spent annually on our pets, $1 billion spend annually on cancer research
    • Information is the oil of the New Economy!
    • Separation of Board and MLS for tax purposes deters us from evolving new data strategies
    • Future of MLS being defined right now…property data will be aggregated, if not by Realtors, then by __________.
    • From “sales associate” to “business associate” (think “Trusted Advisor”)
    • No one can drive into the future on cruise control!
  • 15. Current Trends in Real Estate
    • Richard Green , Ph.D ., Oliver Carr Chair of Real Estate Finance and Professor of Finance, George Washington Univ.
      • Credits: Ph.D. University of Wisconsin, Economics, AB Economics, Harvard, A Primer on US Housing Markets and Housing Policy
    • Movement away from government-guided mortgage systems to market-based systems
    • Monetary policy fights inflation; nominal interest rates fall
    • Mismatch of deposits location to housing need
    • ARMs to the rescue in the 1980’s
    • Corruption of the Secondary Market during the 90’s and beyond. No regulation!
    • Who will buy this “crap”?
    • Mortgage securitizers have no skin in the game
    • Lessons learned:
      • Mortgage markets linked to capital markets function better, but with regulation
      • Stability of economy crucial to stable mortgage market. Deficits kill!
      • Underwriting is key! Must be accurate & responsible. Get skin in the game!
  • 16. Current Trends in Real Estate
    • The Cycle of Change
      • “ No one needs a reminder that this is a cyclical market. But it’s important to understand that changing conditions present opportunities to reexamine your business model and define your own future.”