The RE/MAX Times Online sat down with the RE/MAX International CEO Margaret Kelly (CRB) and President Vinnie Tracey (CRB) to learn their reasons for optimism in spite of negative reports and dismal statistics surrounding housing markets across the United States.
RE/MAX TIMES ONLINE: What is your assessment of the U.S. housing industry?
Kelly: We have to promote that it’s a great time to buy a home. Rates are low, and there is a large selection of homes for sale. The U.S. economy will not recover until the housing market recovers. I believe the new administration understands that and will work to get the housing industry moving forward with affordable mortgages and programs to keep families in their homes. And it’s most important that buyers and sellers use a Realtor. Consumers need the experience and professionalism of a real estate agent.
Tracey: Going into 2008, there were 1.38 million Realtors – an all-time high. The good thing is that we lost 140,000 Realtors, mostly the inexperienced and ineffective, throughout the year. With a compression in the industry to a projected 500,000 new home sales and 5 million resales in 2009, and more Realtors expected to leave the industry, there will be less competition.
RE/MAX TIMES ONLINE: What do you see for the coming year?
Kelly: We’ll never see prices or times like this again. You’ll see more first-timers and side-liners getting into the market. We have had cycles like this before, and we’ll come out of this one too. People are still buying and selling homes.
Tracey: Another 180,000-200,000 agents will leave, putting the Realtor population a little over 1 million. It’s a good thing, showing that people who are well educated and well prepared with great knowledge and wisdom find success, and they realize that people are still buying and selling. Momentum from Obama’s inauguration will start a shift to more positive messages from the press. I’ve always contended that every recession we’ve had, real estate led us out. Now we need the press to help us with positive headlines that can lead to more consumer confidence.
RE/MAX TIMES ONLINE: How is RE/MAX poised to succeed?
Kelly: There are a lot of businesses out there without the ability to sustain. We’re strong, we’re well run and we have a good history of production. People who didn’t run their businesses right are getting out, which means more business for RE/MAX. Franchise sales are great, which means even more for-sale signs and sold signs promoting our agents and the RE/MAX brand. And the addition of regions in more countries strengthens us all.
Tracey: Brokers are seeing a flight to quality. Quality agents look at the tools and competitive advantages at RE/MAX, and they start coming over. We have several advantages over the competition: RE/MAX University with ATOD, MTOD and professional designation courses right from the comfort of your office or home; leads with no referral fees from RE/MAX International, and the Design Center. You would pay a considerable amount for the same service elsewhere. The competition isn’t advertising as much, or in the same places. RE/MAX share of voice will continue to outpace the competition.
RE/MAX TIMES ONLINE: What should RE/MAX agents be focusing on this year?
Kelly: It’s important to remember that in a real estate climate like this, our agents can help families stay in their homes. The more homes we help families keep out of foreclosure, the easier it will be on people who have to move. RE/MAX agents should take this time to get advanced designations – take classes on how to handle REO and distressed properties. They should use the strength of the RE/MAX brand in all they do. There are opportunities in every market, and agents need to find those opportunities in their marketplace.
Tracey: The obvious negative in the market over the past three years is the increase in foreclosures and the shift to a supreme buyer’s market. But affordability is up dramatically from a year or two ago. Affordability in California, for instance, has jumped from 20 percent to 50 percent. Interest rates are down. Foreclosures are sad, but now that they’re in the inventory banks are more willing to negotiate short sales. They used to hold out for 80 percent to 90 percent of the homes’ value, but now they’re taking 50 percent to push the inventory.
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