News and Events
June 19, 2008
Old tricks for new market realities
Industry execs
offer tips for survival
By Glenn
Roberts Jr., Tuesday, May 20, 2008.
"We're the most
entrepreneurial people left in the world. Every morning we wake up
unemployed," said Larry Knapp, president and chief operating officer for
Alain Pinel Realtors, a luxury brokerage company operating in the San Francisco
Bay Area region.
"Whatever has come
along our industry has learned to deal with it," he added.
Knapp spoke during the
"How to Survive & Profit in Today's Tougher Market" panel that
was produced by RISMedia, a real estate research and publishing company.
Part of the battle these
days for real estate professionals is in countering national real estate news
reports about the housing market slowdown, Knapp said, adding that his company
works to put local real estate market statistics into the hands of its agents
to better inform buyers and sellers about actual conditions.
There are many agents
working in the industry these days who have never witnessed a market downturn
firsthand, Knapp said, and his company has hired trainers to help its manager
and sales force adjust to the changing environment and return to business
basics.
Agents who have worked a
short time in the industry may "think that this is the end of the
world," Knapp said of current market conditions, and it's up to brokerage
companies to help them understand that the market cycles back every decade or
so, "and almost certainly will be back going stronger."
"Whatever strength you
have in this market -- focus on what strengths you have and take advantage of
them. We were fortunate to have a strong lender (partner) who kept making loans
when others weren't," he said, as an example.
Knapp said that his company
had paid for advertising in local newspapers to point out that the local market
was faring well in comparison to the
Kate Rossi, president and
CEO for Coldwell Banker Residential Brokerage in
"Agents are stymied
because they have no idea what the basics are. They have no idea how to
prospect, how to present and how to price," she said.
The company has worked to
compress the presentations its agents deliver to prospective clients to about
20 minutes in length, and to make the presentations available live or available
over the Internet.
Rossi also said that while
new technologies are available for real estate professionals to incorporate
into their businesses, there is a fear factor associated with some new
technologies. "The technology is fabulous but everyone is afraid of
it."
When the market begins its
next ascent, it may have a different face, said John Tuccillo, an industry
consultant.
"The next real estate
market is going to be younger and it's going to be more technologically
hip," he said, and real estate professionals are still graying as a group
and run the risk of growing out of touch with younger consumers.
The typical Realtor is over
50, he said. "The population (of real estate agents) has doubled, yet that
age hasn't changed. the world is getting younger and the real estate profession
has not, and I think that is a problem. You've got to get younger,
quicker."
There are different ways to
recruit and to manage younger agents, he also said. While the industry has
spent a lot of attention on baby boomers and their real estate wants and needs,
the "Generation Y" crowd represents another huge demographic group
coming through the housing pipeline, he noted.
There are new
communications tools to connect with prospective clients, Tuccillo said, and
newspapers and other traditional media are feeling the heat of the new wave.
"The fact is the old channels of information are dead. You can stand up
here and rail against newspapers and rail against radio ... but you're poking
spears into a dinosaur. They're dead, they're toast."
Ed Krafchow, president of
Prudential CA/NV/TX Realty who served as a moderator for the panel discussion,
encouraged real estate professionals to seek out niche markets in building up
their business during this period in the market. "Niche players are
clearly developing faster than non-niche players," he said.
Several panelists referred
to the buyers who say they are waiting to purchase until the market hits
bottom, and this stalling effect has "clogged the pipeline" with an
inventory of for-sale properties that aren't selling.
Allan Dalton, former
Realtor.com president who participated in the panel discussion, said that the
industry tends to demonize those buyers who are looking for a great deal on a
home by referring to them as bottom-feeders or scavengers.
Instead, he said, the
industry should embrace those deal-seekers and encourage them to get into the
market.
"The crux of consumer
confidence is not with sellers, it's with buyers,"
