"BUSINESS TRENDS" for 2013: How Do You See It???

By
Real Estate Agent with Douglas Elliman Real Estate 30HA0800896

"BUSINESS TRENDS" for 2013: How Do You See It???

Below are some examples of the way I see the real estate business trending for both buyers and sellers; This is my point of view from a "Bigger Picture" aspect and I know that markets vary from community to community. I am using the ideas that come from actual facts, i.e. Prudential is no longer a real estate company--they remain a financial firm. (My company has dropped the "Prudential" name and rock logo and is now Douglas Elliman Real Estate as it was since 1911).

I believe these trends may affect the real estate business to such a degree that it will determine whether or not we, as agents, will be in this business next year or not. I welcome your input, as you see it, in your comments here.

It will be the agents responsibility to give buyers and sellers the news about the direction of this industry..We are the ones who really need to see these trendSOME SAY THE REAL ESTATE BUSINESS IS TRENDING UPs to help our clients make the big decisions about housing. Both buyers and sellers are in a state of deep concern today--fear of the unknown is controlling buying and selling patterns.

I. Many sellers today find themselves in a difficult place with regard to the decision to sell their home. If they must sell, they face a loss on the value of their home and therefore a very strong chance that they will NOT re-enter the housing market.

  • OVERPRICING The tendency on the part of some agents to over-price a property without regard to the consequences, is a real problem in today's housing market--Sellers are left to hope they will get the high price at the cost of losing valuable time while it sits on the market. They watch as the value drops month after month and as the possibility of buying another house diminishes.

DON'T TIE YOUR CUSTOMERS HANDS BEHIND THIER BACK!

Sellers, not buying another home, means less business for the agent and the agent's company; it means a great deficit in the housing market. How can we influence this trend? What can we do to help to determine what the "new"buyer is willing to buy, or how willing the seller is to sell?

It benefits all involved to examine any influence or trend that will affect real estate.

The net result has to do with the data that is served up to the seller at the time they list their home---a great analysis of the costs of renting versus home ownership must be a part of the pitch for a listing in order for the seller to see the reality of home ownership today. Proper pricing must be emphasized in order to keep the seller in a state of reality rather than KEEPING THEM A PRISONER of their home.

 

 II. SMALLER, BOUTIQUE FIRMS ARE POPPING UP ALL OVER THE PLACE!

Big Box real estate firms are quickly downsizing--and even getting out of the real estate business entirely! (Prudential is one of those companies--they no longer own the real estate company since Warren Buffit bought it). Agents are moving to new firms--many small older established firms can no longer keep up with the necessary technology and close their doors because of it.

Boutique firms are taking advantage of the rift in the market place--you can see it in marketing techniques that both new and established "Boutique" companies are using--they are using the same approach as "Big Box" firms have used for the last 5 years, and it is proving very successful for them!

  • This shifting situation can leave home buyers with the feeling that they are on their own--they may work with an agent who has no idea of how to meet their expectations. The buyer who works with an agent who needs to generate a better bottom line, tells them what they want and is then dragged from pillar to post just to get the showings done that will protect that agent from losing a sale: "get them into all houses in their price range and you can't lose"!  When this happens, the buyer is fully aware of what they are doing and it turns them off.  They usually go looking elsewhere, usually going to a boutique firm where they enjoy a more "hands on" treatment.
  • Since the housing market has suffered it's most devastating set-back in history, the buyers and sellers that traditionally turn the paddle on the "churn" of real estate have shifted their priorities. And that means there are many people today who do NOT want to get themselves into a life long commitment of monthly mortgage payments when they may not have a job tomorrow; many choose now to rent rather than own a home.  Sellers may even decide to put off listing their home, leaving inventories sagging and unsold. This means we are left with less desirable listings, usually overpriced homes that make up the bulk of the inventory...Not very appealing to a buyer!!!
  • IF they can get a mortgage today, buyers find themselves in a very long and scary search as this market continues to show weakness.
  • As a result of the softening of prices again, buyers and sellers are more cautious and careful in the way they choose the agent they work with; they have been hurt once and they don't want to get hurt again! Some struggle on with several different agents--no loyalty to the agents they have used in the past--especially if the home they bought through said agent is now underwater! They would sooner just not buy under these economic conditions---and they walk, especially if they can't  find the right agent to help them decide!
  • "Big Box" firms, once the shining light in the future of real estate, have become so bottom line focused that many of them have dropped out of real estate altogether, as is the example of the Prudential Real Estate licensing division.

III. THE VERY NATURE OF THE REAL ESTATE PROFESSION IS CHANGING...

And there is an even more obvious and important  side effect of what has happened in the housing market in manyPROFESSIONALISM IS MORE AND MORE A REQIUREMENT regions. The weaker prices and stumbling sales results are causing very nervous and unsettled real estate agents.

  • In the minds of many a Realtor, these are the times that give them real concern.  Many are leaving the business if they can find other gainful employment. No more does the competition look quite so different; no more is there a big divide between the big name companies and the boutiques, as they adjust to this new climate.
  • The positive result of this shift from "Big Box" to "Boutique" is that the client now has a better chance of making a careful and considered decision about housing--and that the "new" agent that appears to be surfacing out there is more like the Old Guard. The flashy, quick money attraction is no longer! 

Its ALL about the client/customer now and the fast talking, shady image that the real estate business had perpetuated in some of its agents in the past is quietly and appropriately disappearing!

 

HOW DO YOU SEE IT?

ARE YOU FINDING A SHIFT TO THE SMALLER FIRMS?

IS THERE A CHANGE IN HOW AGENTS TREAT EACH OTHER?

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Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Lenn: Well said; however I believe that NOW is the beginning of the next trend and that is the place I began with "What's Happening Now"---then I moved on to the trend idea, which by the way, is still in it's developing stage and that is what precipitated this post! Thank you for engaging in this with me and all the other members who care enough to at least think about it. :)

Nov 25, 2012 11:23 PM #22
Rainmaker
397,236
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Hi Paula,

A thought provoking blog to be sure, and you did place the caveat that conditions vary from market to market,   But as a Century 21 Agent/Owner, I do have to pull one of your statements out and disagree:

a buyer..."may work with an agent who has no idea of how to meet their expectations. The buyer who works with a "Big Box" agent, tells them what they want, is dragged from pillar to post just to get the showings done that will protect the agent from losing a sale: "get them into all houses in their price range and you can't lose"!  When this happens, the buyer is fully aware of what they are doing and it turns them off.  They usually go looking elsewhere, usually going to a boutique firm where they enjoy a more "hands on" treatment."

In my experience, the quality of an individual experienced agent doesn't depend on whether the agent works at a boutique or a big box.   Also, I've had some challenges working on transactions with some boutiques that are simply not as well organized, for whatever reason I won't speculate....

Nov 26, 2012 01:47 AM #23
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

M.C.: You are right, I should not have said just "Big Box" in speaking about the agent who behaves this way. They are all over the nation and in all kinds of brokerages...I was actually trying make the point that the agent who behaves this way is usually the agent who is under "bottom line" pressure and that comes more from the "Big Box" brokerages. (in my opinion only.) It is an observation of mine that the more corporate the brokerage the more bottom line oriented they are and that is not working very well with the public, hence the migration to a "Boutique" brokerage.

Nov 26, 2012 03:02 AM #24
Rainmaker
397,236
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

I see your point Paula...and I'm glad I don't work in that kind of environment!

I think because we are agent owned, our offices are sort of a hybrid between boutique and big box.

Nov 26, 2012 03:59 AM #25
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

M.C.: You are probably right--the idea that the agents own the brokerage sounds very interesting to me. I knew of one case where in the 80's and 90's these 5 agents owned their own brokerage and it grew to be the largest brokerage out here in the Hamptons. They were highly successful to the point where people would NEVER even think of going to another brokergae to rent or to buy houses....They were around until the Big guys came around in the early 2000's and bought up smaller firms, combined them and gave them a Big Box name. Guess what? That company never had the following of the former firm and now there is rumor of a dismanteling of the Big Box firm....go figure! What goes around goes around and goes around....well, you get my point.

Nov 26, 2012 04:40 AM #26
Rainer
174,627
Betsy Schuman Dodek
Washington Fine Properties - Washington DC Area Real Estate - Potomac, MD
SearchPotomacHomes.com

Paula, you raised several interesting points in your post but it seems the trends you are seeing are not exactly true in my market. Isn't pricing always key? It's true that now more than ever if a house isn't priced right, it will sit and rot on the market! Also, I stay away from being a fortune teller. That is really not our job and it's too easy to get into trouble. 

Thanks,

 

Betsy

Nov 26, 2012 10:55 AM #27
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Betsey: Something has become clear to me here--we are NOT fortune tellers! WHAT??? Did I imply that? Anyone who thinks this business is just about selling houses and solely selling houses is what gets us into the difficulty that we got ourselves into before 2008!!!  We have an obligation , in my opinion to be aware of what appears to be likely--that's all I am saying here! No fortune telling on my part. Anyone who does a business plan looks to the future!!! Something tells me that there is an unwillingness to participate in a simple back and forth that may help us to see what the next year may hold for us in real estate...if you want to put blinders on and "pin the tail on the donkey" then go ahead!  I am merely asking for some participation....Pardon my indignation at your suggestion that I am trying to be a "fortune teller". That was just a low blow, that's all.

Nov 26, 2012 11:09 AM #28
Rainmaker
1,607,655
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

I stay in the here and now and give folks printed facts that others may have said and let the folks make the decision

Nov 26, 2012 12:58 PM #29
Rainmaker
1,676,131
Winston Heverly
Winston Realty, Inc. - Atlantis, FL
GRI, ABR, SFR, CDPE, CIAS, PA

Paula, I see a lot of boutique or a majority there of, but also see just as many franchise like RE/MAX, Keller Williams, etc. With the commission splits and 100% being offered they seem to trend toward the non-franchise brand. One difference to this would be companies like Corcoran Real Estate or Sotheby's and a few others of Palm Beach that may be international known. 

Nov 26, 2012 01:25 PM #30
Rainer
24,795
Cody Sperber
Clever Investor - Chandler, AZ
CleverInvestor.com

A lot of really good food for thought.  Perhaps I should address thge same kinds of issues for investors in 2013.

Nov 26, 2012 07:58 PM #31
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Joyce: I do that too--and it is what the "folks" seem to respond to...they don't like NOT knowing any more. My guess is that the reports that are read by most of the public are the local ones that will affect the way they buy or sell their own property. The impact of, say my company dropping the "Prudential" name from their logo may not even enter into the equation; but I do suspect it does--lots of curiosity here about why the name change...so I like to let them know why. I think the idea that Prudential is no longer in the real estate business is major news!

Winston: It will be interesting to see if there really is a shift away from the "Big Box" realtors and back to the smaller more "boutique" type of firms---is there a Prudential there in your area?

Nov 26, 2012 08:28 PM #32
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Cody: Good! Please let us know what you find in the world of finance when you find anything interesting---I am interested and I know there are other members who do want to know the "trends" happening in the world, even real estate...thanks for reading and commenting.

Nov 26, 2012 08:31 PM #33
Rainmaker
878,814
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

I am seeing two issues here .. one the future of the big box real estate agencies.. They have their own business model. It is not mine. THe real estate market itself is what I'm interested in. I can not predict what will happen in the future, but I do advise my buyers and builders alike with what I can document and what I am seeing with clients. Of course I do not have that wonderful crystal ball that could make me a ton of money. Then I would be buying up real estate and not selling it.

I am working at a small boutique firm that opened when the market tanked. We have survived with just a few agents. WE are doing just fine and will probably be adding a few new agents in the future. The big box brokers have condensed and many agents work another "real job". Nothing stays the same... and going forward I am staying right where i am.

Nov 26, 2012 10:15 PM #34
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Janis: Nor do I have a crystal ball--that's why I ask questions and I appreciate your  valuable input here. MY question about big box realtors is a selfish one, I admit. It interests me if the fact that my company "dropped" the Prudential name is the way it happened or is it the fact that Prudential is just getting out of the real estate business. The old chicken or the egg question. Either way, I need to make decisions about my approach from here on in and I thought some members here could shed light on what is going on. Seeing that you are in a boutiqe firm interests me as well...it looks like that segment of the industry is where growth will happen. that willhelp me in my plan for 2013! Thank you!

Nov 26, 2012 10:45 PM #35
Ambassador
910,966
Kathy Schowe
California Lifestyle Realty - La Quinta, CA
La Quinta, California 760-333-8886

I have always worked in a small firm... we work together and help each other.  I think that allows us to service our clients better- and to have a more cohesive and friendly work environment.  Kathy

Nov 27, 2012 12:37 PM #36
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Kathy: I was a small firm agent too for many years and at the time it was a big deal to go to a big box firm to really grow your business--so in 2003, I joined Prudential and because they were now the affiliate of Douglas Elliman (the firm where I began my career in real estate) I feel like I am back home. We do actually have a  "small" firm attitude and we all work together as well. Now, without the Prudential identity it will be very intereesting to see what unfolds for this company.

Nov 27, 2012 09:09 PM #37
Ambassador
1,042,781
Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

Paula, I read this before and my fingers were tap tap tapping because I wanted to say something, but because I still have the Prudential name felt it best not to at the time.

But what the heck... I would love to work at a boutique agency, but it is not going to happen here. We shall see what becomes of our company because before Berkshire Hathaway bought Brookfield Real Estate (who bought the Prudential Real Estate & Relocation from Prudential), Homeservices of America, a subsidiary of Berkshire Hathaway, bought Prudential Connecticut Realty. So now I am Warren on both sides.

How do I feel about it? I will let you know. The news leaked out that we, Pru CT, were losing our brand, changing our name. Leaked out before we knew, before any marketing was done, etc. Bad news. I am not happy about that. Prudential was a recognizable brand. And agents are using it against us. (They are closing, they are this, they are that)

You are lucky, Douglas Elliman is a well known name. No hiccup for you. And it seems as if you have the best of both worlds with them.

I am sorry we are no longer "related".

Nov 28, 2012 08:09 AM #38
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Andrea: Me too! I have been wondering about you and your company but did not want to ask because of not knowing what we were going to be doing---Douglas Elliman decided over a year ago that they were dropping the Prudential name and have planned, made us aware and targeted the market place with major website update (ASKELLIMAN.COM) and a whole new approach to the institutional advertising and marketing. We were all well prepared and I think the idea that PDE was no longer going to be may have been an instrument of persuasion in the whole WB purchase! Just what would Prudential replace us with???....and we did hold a very high position in the rankings of Prudential Companies! I really hope your company can hold it's own there--but know that there is a major trend toward boutique brokerages and they are gowing by leaps and bounds according to many of the members here! Good luck, Dear Friend and keep us all posted.

Nov 28, 2012 08:21 AM #39
Ambassador
1,042,781
Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

Paula, PRU CT was also high in the country of Prudential franchises. But you must know that I came from a single Prudential office, which was just like a boutique, with the rock benefit. But my broker sold to Pru CT almost 2 years ago and I became just another wheel in the cog. I have been through many changes recently and am not taking this last one well. I should be happy because I believe Warren Buffet knows what he is doing. But when you become that big, it scares me. I am upset that there was not more damage control when the news leaked out. DE was smart, pro active. No matter what we can say about branding ourselves separate from the company we work for, we do rely on the name to some extent. If not, DE would not have been so careful with handling the change. We shall see what happens.

Now if DE ever decides to come into CT, let me know!

Nov 28, 2012 08:56 AM #40
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Andrea: I sent you an email too but I wanted to comment on your situation here so others who may be interested in what is happening with "Big Box" realtors can get an idea of how big this change really is. This dropping of the real estate business from the Prudential identification has implications to all the large real estate firms, in my opinion. Having been part of that franchise from 2003 until the present, I have seen the rise of the Rock in the estimation of millions of Americans. A huge statement was made by that name and was universally one of the most recognizable names in the real estate profession! Now to just walk away, handing the moniker over to Warren, gives me real pause and makes me very wary of the REAL plan underway! It will be fascinating to watch what unfolds---and it may take a few years for it to appear but I believe it is a BIG shift that we need to pay attention to.

Nov 28, 2012 09:47 AM #41
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Rainmaker
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Paula Hathaway, REALTOR, LBA

...A Local Expert in all The Hamptons
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