LakePlace.com in the News

Realtors Adapting To New Reality
By Steve Brown
WFAA Channel 8 – Dallas Morning News

NEW ORLEANS – With home sales and prices falling in many parts of the country, real estate agents are having a tough time dealing with the new reality.

After all, it's been more than a decade since the last housing market slowdown.

"Eighty percent of the agents in business today have never experienced a down market," California real estate agent and industry consultant Brian Buffini said.

"Anyone who has been in the business less than eight years has never experienced a normal market," Mr. Buffini told Realtors meeting in New Orleans this weekend.

Indeed, real estate agents have been forced to scramble to move houses in many cities where a year ago they were getting multiple offers for properties.

The median time a house stays on the market before selling has increased 50 percent in the last year, according to the latest Realtor surveys.

"Within the last 12 to 10 months you can tell a big difference," Georgia real estate agent Jessica Wynn Horton told Realtors in a panel discussion. "There are more houses on the ground. They are sitting longer.

"Buyers are taking longer to make a decision."

Minnesota real estate agent Wade Hanson of LakePlace.com said, "I've been in business since 1999, and this has by far been the slowest market.

"There is a large inventory on the market," Mr. Hanson said. "A lot of that inventory we can blame ourselves for – we have overpriced it."

With home prices falling in many markets, agents are spending more time wrangling with sellers over their listings.

"You are going to have to go in and ask for price cuts before you take a listing," Re/Max International chairman Dave Liniger said. "It's been a pretty easy business for the last few years. A lot of people developed poor habits."

Mr. Liniger said that with real estate agents working much harder to sell homes, "it will take some of the pressure off commissions."

The 1.3 million-member National Association of Realtors predicts that the shakeout in the housing market will run thousands of agents out of the business.

"Now we have to work a little bit – now we actually have to get in game," Mr. Buffini said. "All of the sudden how to get a price reduced is important."

He said that in today's market, if you're not a good salesman, "you're dead."

To meet the changing fundamentals, residential sales firms are shifting their marketing resources.

"Twenty-four months ago, we spent most of our money on TV – it was building brand awareness," Mr. Liniger said. Now Re/Max is spending about half its advertising dollars on television spots and the rest is going to marketing on the Internet and other media.

"The Internet is not going to go away, folks," said Prudential Real Estate Affiliates president Earl Lee. "As real estate people, if we don't understand the value of this vehicle and how we integrate it into our business, we are going to lose our business."

Many real estate industry execs and agents meeting in New Orleans this weekend blamed the national media – not overheated housing markets – for the housing sector's current problems.

"In 2001, we started seeing stories in the media about the housing bubble and doom and gloom," said Alex Perriello, president of the Realogy Real Estate Franchise Group, which includes Century 21, Coldwell Banker and ERA. "That has influenced people's attitudes."

To combat what it sees as a negative slant on the housing market, the National Association of Realtors is taking out full-page newspaper ads in many markets that say, "It's a great time to buy or sell a home." The advertisements promise home price gains in 2007 and tell potential buyers that homes are still a "great investment."

Mr. Perriello said the Realtors' trade association is spending about $1.5 million between now and the end of 2006 on the marketing campaign.

"We need to start telling the story that the market is not as bad as you think," he said. "The market is not bad – it will be the third- or fourth-best year in the history of the business."