I was in Las Vegas doing what I could to help Laker great Lamar Odom, and happened to swing by the Z-Group event for their premier agents.
The big wigs rolled out a couple of new features, Stan did his presentation, and then they had breakout sessions that included speaker panels with agents who are devoted customers.
No one could blame them for inviting their most successful agents on stage – it’s what you would expect. But the numbers they discussed were staggering.
Robert Slack was just a single agent for a couple of decades.
In 2014, he had four agents working for him. Now he employs 34 agents – and expects that number to be up to 40 agents by the end of 2015.
Zillow sells ‘impressions’ on a listing page, based on zip codes – he has bought exposure in 92 zip codes in Florida!
His team closed 42 sales last month. He wants to close 1,000 sales in 2016!
Robert works in central Florida, and serves Orlando, Ft. Lauderdale, Tampa, Sarasota and Venice. He sells houses priced mostly from $100,000 to $400,000 – which is a very affordable price range. There was another agent from Missouri who had similar success – but his sales were at the same price point.
This team approach built around Zillow buyer leads can be very effective. The team leaders can build the machine and check out too – the Missouri guy said he spent all summer at the beach.
Could realtors in higher-end areas use Zillow advertising to achieve dominance? It’s so competitive already that it would take a major investment for years, but it is possible. Such an effort would really clear out the individual buyer agents.
I took in a good portion of the big realtor conference this morning via livestream. They had some big hitters on stage too.
Rupert Murdoch delivered a 7-minute speech, and did some Q&A. He comes off as a proper gentleman, and he’s a good speaker for a guy who is 83 years old. But he didn’t deliver any bombshells, or make any big promises about taking on Zillow/Trulia:
He was asked about his experience with Zillow, and he said they did spend some advertising money, but found little benefit.
The average sales price in his Beverly Hills office is $2,800,000. At that price point, he surmised that buyers and sellers would get referred to a top agent, rather than selecting a realtor who advertised on Zillow.
His office does all marketing in-house (he has 20 people in his marketing division), and agents in his office can pay an extra 5% from their split to have the company produce the marketing for their listings.
Tom and Mike Ferry were both there too, on stage together for the first time in eleven years. Tom is Mike’s son, and the two of them worked together for 16 years in building Mike’s realtor training company.
Tom recalled the time he came to Mike with a multiple-choice proposal; to either a) sell the company to Tom (for a good price), b) create a partnership together, or c) Tom to leave the company to go start his own. Mike chose c), and they have been competitors ever since – and you can sense that it’s still a little chippy between them.
If you are new in the business, check out both trainings – they’re good.
Zillow and Trulia were brought into many of the discussions, but no new insights really. Realtor.com will be working hard to put out a better product, and a group of major brokers back east are secretly creating their own portal.
I think the consumers use the portals to get free information about homes, not to hire a realtor.
It’s why Zillow will likely create their own set of ‘preferred agents’ and heavily advertise the benefits of hiring them. The realtors will gladly pay to receive those warmer leads – throw in some special ‘listing enhancement’ kits and Zillow will have the complete package to sell to agents.
The Spring Selling Season around here traditionally gets started right after the Super Bowl – let’s talk about it!
On Monday, February 3rd at 8:00pm we will be joined here by Rich Toscano and other local experts to discuss the real estate market!
Using Google Hangouts On Air here, you will be able to watch and listen to the panel discussion right here on the blog. We will be taking your questions too – get in early by leaving them in the comment section below.
The titans of on-line real estate in a panel discussion about the future:
In the beginning the moderator claimed that Zillow is the MLS in many cities, and their COO didn’t want to have anything to do with it. Either Zillow is planning a sneak attack, or they are going the Redfin way and playing nice with the realtor community. While it seems inevitable that one website could dominate the space, and perhaps become the PublicMLS, for now the three of them seem happy to co-mingle in the space.
The third-party websites (Zillow, Trulia, & Realtor.com) are focused on selling advertising and leads to realtors. They discuss how they want to give realtors more data about the consumers, such as their recent search parameters and more on their wants and needs. But of course with permission only and let’s guard it carefully.
I thought the Realtor.com president had more to say than anyone else, mostly because he stood up for publishing the sales histories of agents in the name of transparency. It could be that the website that brings that specific data to the public will take the lead. But as long as the Big Three are selling ads to realtors, they may not want to ruffle feathers.
More distressed assets are expected to go back to their lenders — pushing those lenders to the brink of oblivion or over the edge.
The status of distressed loans, properties, failing banks and how long it will take to for these to work through the system were among the topics at the Mortgage Bankers Association’s Commercial Real Estate Real Estate Finance/Multifamily Housing Convention & Expo session at the Manchester Grand Hyatt on Tuesday.
William Landis, Rialto Capital chief investment officer, said with 800 to 1,000 troubled banks across the country, a tidal wave of closed institutions may be expected this year and next.
“The FDIC was moving very slowly, but the big vomit is coming in 2011 and 2012,” Landis said. “I would hope that by 2013 the bulk would be through the system. The economy should be stabilizing by then.”
Landis did suggest that the bad loans that will have led to many of those bank failures should have also largely played themselves out by 2013, as well.
(S)everal speakers at the forum said several scary things about housing and foreclosures. Mark Zandi of Moody’s Economy.com is looking for a hybrid version of Fannie and Freddie, or a mortgage market more privatized but with government backing. He said that if the mortgage market were fully privatized, mortgage rates would go up at least one percentage point and home prices would drop ten percent.
Laurie Goodman of Amherst Mortgage Securities put up some truly scary charts about non-performing loans and, with a flurry of numbers I couldn’t follow, said that without government intervention about 11 million more borrowers could lose their homes.
“Equity is the single most important determinant of default, not unemployment,” declared Goodman. This as a new report from CoreLogic this morning showed home prices dipping over 5 percent nationally in December, year-over-year.
“The key thing for investors to look at right now is what’s going to open up for them, what part of the playing field is going to open up where they can actually step in and be part of the mortgage market again,” said Armando Falcon, chairman and CEO of Falcon Capital Advisors, on a bit of a brighter note. “And that’s clearly going to be for the jumbo prime mortgage sector.”
Laurie Goodman, senior managing director at Amherst Securities, believes one in five distressed homeowners in the U.S. are facing, or may face, foreclosure.
The analyst adds that little may be done to stem the tide of foreclosures without greater government intervention or significant principal reduction. Currently, she said 11.5 million home loans are non-performing or highly distressed.
Transition rates of negative equity homes are improving, however, from last year.
“Many banks are opposed to principal writedowns,” Goodman said. “Though it is interesting that they make good use of this for their own portfolios. We think before this crisis is over you will end up with a mandatory principal writedown program.”
Meanwhile, Mark Zandi, chief economist at Moody’s Analytics, maintained an optimistic tone on the future of the housing market. He expects home prices to be depressed into 2012, and adds that the knock-on effect from the robo-signing debacle will be minimal. “It’s not going to be a significant issue,” he said.
“Household formations will pick up,” he added, in a belief that supply will not greatly outstrip demand in the long-term. The current, large inventory will provide the main downward pressure on prices going forward.
Zandi said markets will improve overall, as mortgage rates hover around 4.5%. And, he adds, housing has reached the most-affordable levels in recent memory. “By this time next year we should see measurably better job conditions,” he said.
“We aren’t quite at the bottom yet, but we are getting close,” he said.
And Kyle Lundstedt, managing director of the applied analytics division at LPS, said one in three mortgage delinquencies have been in such a state for more than a year. Perhaps most alarming to Lundstedt is the rise in prime mortgage delinquencies. “The prime markets are the place we’ve seen the most increase in foreclosure,” he said.
As housing experts cross off 2009 as the fourth year of the real estate downturn, they see a “dim light at the end of the tunnel” and a “glimmer of hope” in 2010.
“It’s not great, but it’s less bad than it was six months ago,” said Alan Gin, a University of San Diego economist who addressed USD’s annual real estate outlook conference yesterday.
Gin said his glimmer of hope means that San Diego “is on the verge of bottoming out” in the economic downturn. USD economist Ryan Ratcliff’s dim light means, “The recovery is about to begin, but we have a long way to go.”
Alan Jay Brinkmann, chief economist at the Mortgage Bankers Association in Washington, said California will find recovery difficult because it, along with Arizona, Florida and Nevada, saw high housing price appreciation and construction during the boom and now is wrestling with massive foreclosures and widespread construction shutdowns.
He said homes for sale have dropped from 322,000 in October 2007 to 187,000 this past October. That’s a sign that buyers have reduced the large inventory of unsold properties that existed at the outset of the recession. But, over the same two-year period, distressed properties that are 90 days delinquent or in foreclosure have skyrocketed to 690,000 from 160,000. If 75 percent of those properties — 517,500 — eventually end up on the market, that would swell inventories and depress prices.
“I see the market holding on in the low end,” he said, but falling at the high end, above the $700,000 mark.