RISMEDIA, August 10, 2010—Sometimes, we all need a breath of fresh air. So was the case at Prudential Real Estate and Relocation Services when Jim Mallozzi arrived to take the helm in October 2009, just 10 short months ago. You see, this is Mallozzi’s first stint in real estate. He’s a veteran of the financial services industry, and spent the past five years with Prudential Retirement. But pay that no attention, according to PRERS President Earl Lee: “Great real estate companies have great leaders. We couldn’t have a better person at such a time when real estate has changed so much.”
In this exclusive interview, Mallozzi and Lee share their perspectives on the market, the chairman and CEO’s influence on the company and what they believe the future holds for the Network.
Stephanie Andre: What are your general impressions of the current real estate market and where do you think it’s headed?
Earl Lee: If you go back and compare today to this time last year, the market has made a remarkable recovery. We’re nowhere near the levels of the mid-2000s, but we’re headed in a good direction.
As expected, home-sales dipped following the expiration of federal home-buyer tax credits on April 30, just as they did in December and January after the first-time home-buyer tax credit expired. Yet there are reasons for optimism in U.S. real estate. For starters, interest rates have rarely been lower and housing affordability is near all-time highs. It’s truly a unique opportunity when homes and the mortgages used to buy those homes are at bargain prices.
Obviously, the economy is causing angst among real estate consumers and will continue to do so through the recovery. Consumers, as always, must make sensible housing decisions that account for their financial wherewithal and address their current and future needs. A home is a place to live; it’s not an ATM.
Jim Mallozzi: Right now, it really is about jobs and confidence. We feel that the underlying strength of the economic recovery will be self-sustaining, which will help home sales to continue their recovery. Interest rates, affordability, pent-up household formations, stabilizing prices and employment growth should keep our market moving forward. There will be bumps along the way. Like others, we’re concerned with the so-called shadow inventory of homes held by quasi-government agencies, banks and other lending institutions. And the jury is still out on loan modifications, which carry a high re-default rate. There are other concerns. Nevertheless, we’re optimistic for the gradual recovery of U.S. real estate.
SA: How has the Prudential Real Estate Network fared through the market downturn?
EL: Our Network is doing well. We’ve not only maintained our footprint, but we’ve been able to grow over the last 12-24 months. We have a very stable group of affiliates who, like others in the industry, have formulated new strategies, gained greater efficiencies and made tough decisions to enhance their market positions. Their work has been inspirational.
JM: Today’s buyers and sellers are going to places of relative calm and companies they believe they can trust. The Prudential Real Estate Network has the brand, backing and reputation of a Fortune 100 company, a global institution working for the long-term financial security of millions of people. Our name stands for strength, stability and trust, which means a lot to customers, especially in these times.
SA: What are real estate consumers looking for now and how do you plan on delivering it to them?
JM: Technology and connectivity. As the relative new kid in the industry and at our company, I commissioned a consumer survey that looked at 1,000 individuals in 47 U.S. and Canadian markets. The group was made up of both renters looking to buy and owners. The survey was done as a blind-awareness study by a third-party firm so no one knew it was for Prudential until it was disclosed later on in the survey.
What we found was quite interesting: People today follow the real estate marketplace as they do the stock market as a barometer for the U.S. economy. In fact, respondents were acutely sensitive to the current challenges of the real estate market. Against this backdrop, consumers said the need for professional, trustworthy representation has never been more critical, and that the firm with which a sales professional is affiliated is increasingly important.
By a large margin (72%), respondents were more predisposed to consider an agent affiliated with a national firm that operates a local office in their market.
EL: Another interesting fact that emerged from the survey concerned technology. We assume Baby Boomers aren’t that tech savvy and only Gens X and Y are embracing Facebook, Twitter and other social media. However, we found that there is a high desire for technology across the board…but it is specifically wanted to enhance personal relationships. Respondents want interactive tools and resources, in addition to—not as a substitute for—advice and guidance from a real estate professional.
We will continue positioning our business with a combination of interactive resources, tools and aids, and we will continue to provide robust sales professional training through our Prudential University Learn Center and other means.
SA: Earl, this is Jim’s first position with a real estate company, having come from the financial services sector. As an industry leader with more than 30 years in real estate, can you talk about Jim’s arrival at the Network and his leadership and impact thus far on PRERS?
EL: Great real estate companies have great leaders. We couldn’t have a better person at such a time when real estate has changed so much. Jim has a strong business sense and he’s done a wonderful job connecting with our affiliates, relocation clients and employees. Personally, I’ve learned a lot from Jim in a short time. He’s brought the right mental focus for us as a company.
SA: Jim, what was your goal coming into this position and where are you with it, less than a year at the helm?
JM: First, let me say that Earl is truly the “Dean of the Real Estate Industry;” that’s what I call him. He has more experience and market savvy than anyone I know. Further, we have a spectacular associate group at Prudential Real Estate and Relocation Services, so my initial goal was to model our approaches to maximize effectiveness in all that we do. We build business and service offerings on four pillars of strength:
-Creativity: Looking at the world around us and our operations from different perspectives. In March, we launched the Prudential Real Estate Collaborative Innovation Partnership (PRECIP), the real estate industry’s first research and development laboratory exclusively focused on building a new generation of tools and resources for real estate professionals. We also previewed the first preliminary concept of an interactive house tour, based on existing hardware and software created for video games.
-Culture: We’ve been working with the University of Michigan’s Center for Positive Organizational Scholarship and stressing the theory of “positive deviance,” which helps individuals and organizations focus on what’s right, rather than what’s wrong. The upshot is an increasingly positive work environment and energized associates, which helps in our service to our affiliates.
-Accountability: As a real estate and relocation company, we help people when they are in transition and most vulnerable. Accountability means keeping our promises to clients, exceeding their expectations and helping them reconnect as quickly as possible in their new homes and locations.
-Control: The Prudential brand dates back more than 135 years and we hold ourselves to high ideals and standards. We’ve launched a major initiative called “Best in Class” to review each of our processes. This will help us understand and celebrate what we do well, find ways to make what’s good better, and identify and fix what’s not working well.
I’ve also done a lot of traveling since coming to Prudential Real Estate and Relocation Services, visiting many of our affiliates across North America. Combined with my visits to our Prudential Relocation offices in Asia and Europe, I’ve literally been around the world. Our strategy starts with listening and it’s essential for me to hear firsthand about our affiliates’ hopes and aspirations. My job is to help our affiliates reach their aspirations.
SA: Where do you see Prudential Real Estate and Relocation Services two years, five years down the road?
JM: We see an enormous opportunity to increase our footprint in both North America and the world through our real estate and relocation operations. We are optimistic, cautious and constantly looking at ways to grow and strengthen our business.
EL: I couldn’t have said it better. I think the opportunity for Prudential Real Estate and Relocation is tremendous because of Jim entering our business. We have been successful in the past, but what Jim brings is the ability to ramp up growth and initiatives that will bring more quality affiliates into our Network. We want quality growth; we stand for high trust and we are very excited about what the future holds for us. The best days are ahead for Prudential Real Estate and Relocation Services…we are only at the doorsteps.
For more information, visit www.prudential.com/realestate.