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Real Estate Trends Session 2008

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Information about Real Estate Trends Session 2008

Published on June 5, 2008

Author: mikethorn

Source: slideshare.net

Description

Sales meeting presentation on trends in the real estate business
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Good Morning Ballantyne “ Any type of real estate market is always good for someone.”

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.”

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.”

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.

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.

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

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

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.”

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.”

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”

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”

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.

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.

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)

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)

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

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

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?

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?

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.

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.

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!

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!

Current Trends in Real Estate Shannon McIntyre Skousgaard, Ph.D., Knowledge , skills (short term) Ethics (long term)

Shannon McIntyre Skousgaard, Ph.D.,

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!

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!

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!

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!

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.”

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.”

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