In the following session, Charlie Oppler, Special Liaison for Large Firm Relations, NAR interviews Mike Litzner, Broker/Owner, Century 21 American Homes; Jason Waugh, COO, Prudential Northwest Properties; and Sherry Chris, President, CEO, Better Homes and Gardens Real Estate, about navigating the future of real estate.
Charlie Oppler: With the summer sales season in the rearview mirror, and the cold reality of end-of-year numbers-crunching staring at us dead ahead, it’s time to take a long look at what is next on the horizon—not just what we expect in 2012, but in the next three to five years. Is consolidation the new normal? What about changing demographics? What can we expect from banks and the government? How do our strategies need to change? The answers are as diverse as the brokers and agents who are putting their shoulders to the wheel—whose passion and inventiveness help them survive and thrive in a changing and challenging environment. So today, we’ve invited three industry veterans who fit that exacting profile. Mike, what’s your take on the road ahead. How do we need to navigate?
Mike Litzner: I think it’s a given that consolidation is a key component of the times—and it’s likely to stay that way at least for the foreseeable future. We’ll continue to see shrinkage in the number of companies, in our brick-and-mortar presence, and in the producing agent population. That’s not necessarily a bad thing. Brokers in the middle may find it harder to stay competitive—but only if they lack the guts and imagination to find themselves a unique and profitable niche going forward.
Jason Waugh: The reality is jobs. Our industry is tied to consumer confidence, and as long as unemployment is up, we’ll need to keep pulling in our belts. But we also need to sharpen our skill sets because there is absolutely business out there for the smartest, most honest and most innovative brokers and agents.
Sherry Chris: Mike mentioned finding the right niche, and I think that is very important. We are seeing significant changes today in the demographic make-up of the country as the eco-boomers in the 18 to 34-year-old age group begin to drive real estate and the economy. They will continue to be the drivers for the next 30 years, and their personal instability may keep them from buying houses as a matter of course the way their parents did—at least in the immediate future. So we will likely see a boom in rentals, and smart brokers need to be prepared for that. Handled right, rentals can provide a significant revenue stream. That needs to be part of the new business model.
Charlie Oppler: Good point—and there are other changes looming in the way business is done. In at least a couple of states, like Arizona and California, there is a movement to create statewide MLS services, for example, which will consolidate REALTOR® services but also make them more efficient. That may be another medium through which savvy brokers and agents can sharpen and expand their skills to reach and capture a greater number of consumers.
Mike Litzner: Also, banks today are in risk-reduction mode. They are being exceedingly cautious—and appraisals are very inconsistent. We need to figure out how to find balance in dealing with lenders, and how to help buyers and sellers understand and work with the new reality.
Jason Waugh: I think also that as banks continue to get more into our business, we need to develop more opportunities in the area of property management.
Sherry Chris: And to maintain our relevance by offering higher levels and different types of service. I also think it’s critical that we find new ways to instill confidence in today’s consumer, who may be more interested in lifestyle and community than in a house itself. If we’re looking to increase opportunity, our marketing needs to address the lifestyle issue.
Mike Litzner: But you know what? There will always be buyers. On the good side, the Feds are keeping interest rates at bottom and there is plenty of inventory out there at really attractive price points. On the bad side, we need to squelch any interest in taking away the mortgage deduction.
Jason Waugh: And Mike is right. There will always be people who have to buy and sell houses. The key is to adapt, to create opportunity from every change in the landscape.
Mike Litzner: The challenge isn’t all that different than it is in any market: you have to be flexible, and be efficient and profitable even in cost-cutting mode. That’s what separates the whiners from the doers. Be tough. Be ready. Find whatever angles you can to put those deals on the board.
Charlie Oppler: Those are the kind of issues NAR makes a huge political commitment to. The Second Century Initiatives, including the political side will shape who we are. We back candidates who understand the consequences and maintain a strong presence at the local, state and federal levels. Our NAR REALTOR® Party is putting the full force of our grassroots power to work for the good of the industry and America’s property owners. More details can be found at www.realtoractioncenter.com/realtor-party.