Results of annual RISMedia survey show that brokers are alive, kicking and spreading the word
By Maria Patterson
RISMEDIA, April 29, 2008-In true real-estate-professional fashion, when the going gets tough, the tough get going. As witnessed by the record number of survey respondents to RISMedia’s 20th Annual Power Broker Survey-887 to be exact-brokers are anxious to deliver their message loud and clear: “Things may be tough, but we’re still here…and still doing business.”
In an industry that is historically cycle-prone, 2007 continued the challenge that began some 12 months earlier. Listings were up, prices were down, and buyers in many regions sat on their checkbooks to wait out the whims of the marketplace.
This played out in the numbers reported in RISMedia’s 20th Annual Power Broker Survey, with the total number of transactions down from 2,754,618 in 2006 to 2,322,210 in 2007. On average, real estate firms did over 1,100 less transactions in 2007 compared to 2006. Total sales volume in 2007 was down more than $100 billion, from $855,755,959,352 in ’06 to $749,201,552,294 in ’07.
There is one thing that is certain, however, and that is that the real estate market remains local, and today, depending on whom you talk to-and where-it may or may not be that 2008 will offer an instant replay. Signs of new life are springing up in some areas of the country, while in others, brokers are hunkering down and waiting for 2009.
“For more than two decades, we’ve budgeted on the expectation of 5 percent less in income and 5 percent more in costs,” explains Ed Krafchow, president of Prudential California/ Nevada/Texas Realty, whose assets have quadrupled since he assumed his post in 1991. “In a middling case, we might see a 10-percent swing; in the worst case, maybe 20 percent. Last year, some of our markets were 40-percent down. That situation called for drastic measures, and drastic measures are what we took.”
Brenda Shipplett, president and COO of the mid-Atlantic-based Long & Foster Companies, expressed a more sanguine approach. “When you make a lot, you spend a lot,” Shipplett says. “And when you don’t, you don’t. I looked for opportunities I might not have pursued in better times, and that’s worked out well for us.”
NRT, whose national brands include Sotheby’s International Realty and Coldwell Banker, looked inward, according to President Bruce Zipf.
“I have to say, we’ve been fortunate through this downturn, because the upper-end market remained robust and we were able to play to our strengths,” Zipf reports. “NRT’s average selling price is twice the national average and so we were able to not only outperform the market but outperform our own expectations.”
On the other end of the spectrum, Michael Saunders & Company, with 500 agents in 16 offices along the hard-hit Florida Gulf Coast, took another tack and looked outward.
“There is no question that our local business has suffered,” says company President Michael Saunders. “But we’ve been focusing quite a bit on the international market and that has been paying off handsomely. We have developed a very trusting relationship with what we call our ‘Iceland groupies’-and just recently, we closed a deal on a $3 million property that started with an e-mail from Hong Kong.”
Of course, notes Saunders, business like that requires cultivation: “It just doesn’t happen by itself. I’m making a business trip to Rome very soon, and I will be speaking in the United Kingdom next fall.”
Whether it’s devoting painstaking detail to costs vs. profits, or actively pursuing new business opportunities, taking a hands-on, aggressive approach to business is what’s keeping today’s power brokers afloat. In RISMedia’s soon-to-be-released report, “Power Brokers Confront a New Business Reality,” 30 brokers from the Power Broker Report’s top 500 discuss the measures they are taking, the opportunities they are jumping on, and the strategies they are utilizing to ensure profitability in 2008 and beyond. This report will be available in next month’s 2008 Power Broker Report, which also includes all the detailed findings of this year’s survey. For more information on ordering this report, please contact Pat Hatton, 203-855-1234, ext. 124.
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