News from the West Coast

I just returned from my biennial meeting of The Leadership Council.  This meeting was in San Francisco, and, although the weather is actually better here, I found it well worth attending, as always.  Around the country, brokers are feeling that the market is improving.  Since prices are still declining in some markets (including Connecticut), that doesn't mean that real estate brokers are in clover, but more units are selling, and faster.  Buyers seem less concerned that prices will drop a lot further, and they are moving on with their lives and finding homes.  Mortgages continue to be a challenge for many, and the effects of the Dodd Frank bill will continue to hurt that industry for years to come.

Some markets are a great deal better, and San Francisco is one of them.  There prices are rising, and units are flying off the shelf, despite a median price of over 1 million in the city itself.  Many homes are selling for more than the asking price, and often before the marketing has really gotten underway.  I was surprised that, for a place known as a high-tech mecca, the agents don't seem to use a lot more technology than we do. It still comes down to signs, open houses, broker to broker marketing, and word of mouth.  The one real change is that the internet has largely replaced print advertising, although there is still some of that.

Two interesting side notes:  I was the only person there without an iPad, which tells you something about why Apple alone is raising the NASDAQ results; and, two, this group, of owners from around the country, plan to vote for Romney over Obama by two to one.  The real news there is that they went for Bush over Gore by 18 to 4, so you can see that the election will be close!

Real Trends, The Leadership Council

REAL Trends, Inc. is a publishing and communications company considered to be a leading source of analysis and information on the residential brokerage industry. Below are three videos on the current trends in the real estate industry.  To learn more about REAL Trends, Inc. please click here.

Leading RE

We belong, as many independent real estate firms do, to a network of similar professionals. In our case, it's call Leading RE. When its member firms combine their sales, Leading RE outsells any of the national networks, and its reach extends around the globe. I just spent some time on the website, and the tools available to us far exceed what could be obtained in the pre-web days.

What's the advantage to consumers? For one thing, we can refer people from New Haven to anywhere around the world, and ensure that they receive service at a high level. It's the difference between walking in the door of any professional establishment and having the name of a good person at the other end of the phone. Also, it allows us to coordinate the services on both ends of a move. We can use trusted colleagues in another location, and count on them to keep us informed about what's happening with the purchase or sale in their area. Sometimes that involves bridge loans or changes in moving dates, and it helps to have everyone in the loop.

These things are helpful for agents as well, obviously, but it is their ability to take advantage of the accumulated knowledge base of others in the field that is most useful. Sometimes you just need to avoid reinventing the wheel! In fact, we belong to a much smaller group of large independents, The Leadership Council, about which I've written before. We just started a joint site to post training, advertising, marketing, and various documents which would be interesting for the group to see.

It took a very long time to get our very fractionalized industry to the point where it could share more than basic rules of conduct in common. But it's been worth the wait!

News from Around the Country

I just got back very late last night from Cincinnati, where The Leadership Council (a group of large independent real estate brokerage firms from around the country) met at Comey & Shepard's offices there. The trip itself was uneventful, except for the US Air flight from Philadelphia to Dayton (no, there's no more direct flight from New Haven to Cincinnati!), where the gate attendant announced that the plane had no working bathroom. Sounding just like someone's mother, she then proclaimed that, if you thought you'd have to go, you should go now, before getting on the plane! A new low in air service---and they're probably working on coin-operated toilets as we speak....

We always learn a lot at these meetings, and this one was no exception. On a beautiful fall Sunday, we sat in a windowless basement conference room all day, and listened to tales of woe from around the country. The brokers in this group were all hoping that the bottom has arrived; indeed, there are some signs that it has passed. Their average sale prices, however, were all down from a year ago, and most had unit declines of 10 to 20% from a year ago, and a two-year decline of more than that. Homes under $200,000 are selling everywhere, mostly to first-time homebuyers. Homes over $700,000 are not selling anywhere, to anyone.

In a twist on the common phrase, there is no broker left behind. All of us have had trouble getting transactions closed in this market. Financing is hard. Closings are delayed or cancelled. There doesn't seem to be any difference in big companies vs. small; all are affected. In fact, so-called traditional brokers are doing better than the discount or 100% companies in percentage of business. All parts of the country have had issues, although the places that didn't go up much (in our group, Tulsa and Des Moines) are much less impacted now. In fact, those companies in our group are chugging along. New construction and commercial real estate were low points for pretty much every firm.

We remained optimistic and, for the most part upbeat, helped by good food and plenty of wine. Next spring, when we meet in Iowa, we'll be hoping to break out the champagne. Until then, it's back to work!