For most in real estate, 2011 was yet another rough and tumble year. As we tried our best to deflect the continued slings and arrows of a challenged economy, many adjusted to the market and unearthed new opportunities for growth and expansion. Here, members of RISMedia’s Real Estate Information Network® (RREIN) share their strategies for surviving 2011 and leading the charge in 2012.
Linda Sherrer, Christy Budnick, Maria Wilkes
President; Executive Vice President; Director, e-Commerce & Information Services
Prudential Network Realty
As we wrap up the fourth quarter of 2011, has this year panned out as you expected it to? Were there any major surprises…good or bad?
Scott MacDonald: This year was definitely a little more challenging than expected with all of the financing changes that occurred as far as the tightening of credit, increase in FHA MI, and continued issues with appraisals, but overall, we still are having a great year. We opened a fourth office and agents are affiliating with us, which is great. Each year, I do my Top 10 predictions for the upcoming year and I hit on some, missed on others. The best miss was I had predicted interest rates would be above 6 percent and as we all know, I couldn’t have been any further off, which is good. For the best hit, I predicted we would see new-home sales prices come down and, as a result, we would see more new home sales and we did—at least in Northern Virginia. Toll Brothers had a record year in South Riding, a community next to our Chantilly office, selling 110 houses in their fiscal year which ended in October. The community where our Ashburn office is located, Brambleton, sold 354 houses in 2010…the 8th best-selling community in the country has sold over 500 houses, year-to-date.
Linda Sherrer, Christy Budnick, Maria Wilkes: We are very pleased with the progress we have seen this year. Prices have stabilized, and in some areas, we are beginning to see small price increases; inventory is dramatically lower than last year and sales units and volume have increased. Overall, our MLS has seen a 4 percent increase in sales…we are thrilled to report that our company is up 19 percent! We wouldn’t say any of this is a surprise. Each of the last three years, the market has improved, albeit at a very slow and painful rate, and we have worked diligently to position Prudential Network Realty to take advantage of the improving market.
In your opinion, what will be the most significant drivers of business in 2012 and how are you preparing your company to take advantage of them?
SM: In my opinion, there are a few. Investors will continue to play a huge role in our market. We need to educate agents on how to work with investors, helping them get involved in property management and learn to market themselves to attract more investors and tenants to ensure success in this arena. On the flip side of investors are first time buyers. As rents increase, with the interest rate environment we are currently in, buying may be a better option for many would-be tenants. So having a plan of action to help first-time buyers is extremely important. Although interest rates have been at record lows, they have not motivated huge numbers of buyers to enter the market but a sharp increase in rates could be devastating to the housing recovery, so keeping rates low is critical and educating the public on the true cost of homeownership is critical. In addition, HAMP 2.0, if successful, will help keep people in their homes longer. This will help stabilize neighborhoods and prevent further foreclosures, plus it will aid in increasing consumer confidence. So we need to be a trusted advisor to our past clients and let them know about this opportunity. We also need to lobby RPAC to keep the Mortgage Interest Deduction as well as prevent the implementation of 20 percent down-payment loans. Getting our agents involved in RPAC is a focus next year as well.
LS, CB, MW: We anticipate that 2012 will be similar to 2011 with modest gains in prices and sales units…historically an election year is good for real estate. The investor segment continues to increase so we are poised to take advantage of this market niche in addition to the short sale and REO business that has comprised over 45 percent of our book of business for the last two years.
What are your predictions for consumer confidence in 2012? What issues stand to most significantly impact consumer confidence next year and what strategies will you employ to help restore confidence?
SM: If the press continues to pump out negative information on the economy and housing instead of putting a positive spin on what is happening, and jobs are not restored, consumer confidence will stay low. It is critical that agents get the word out about their market as each market is local and even hyper local. Consumer confidence will be a key for us to continue to drive sales locally. Our market in Northern Virginia is unlike any other in the country. Our distressed property inventory is only 18 percent of our market, as such, foreclosures and short sales are not a driving force; our unemployment rate in Northern Virginia is in the 5 percent range, and we only have a 2.9-month supply of houses. It is our job to get this information out to our clients and consumers to dispel the negative news they hear virtually daily on the housing market. We need to continue to let consumers know that if their employment is stable and the house is right for them and their family, then interest rates are phenomenal and now is the right time to buy. So education is the key. Blogging, videos, email campaigns and direct mail are how we plan to get the word out to the public.
LS, CB, MW: The divisiveness in the political arenas is concerning with regard to consumer confidence and certainly the world markets are also a concern. We will continue to remain informed on the national and international scene, but focus on our local market since real estate sales are truly localized.