Jim Gillespie presenting Martin Millner with the top team at Coldwell Banker Hearthside

I was very proud, recently, to have received an award from Coldwell Banker Hearthside, as the top producing team in the entire company, for the second consecutive year.  The award was presented to me, in front of the whole company, by the CEO of Coldwell Banker, Jim Gillespie.  Jim delivered a wonderful address, which I will speak of, in a minute. 

I don’t like to spend too much time talking about my real estate accomplishments, but this award was particularly meaningful.  Obviously 2007 was a very challenging year for most realtors.  My team and I,  had a very strong year in 2007, despite the markets challenges.  We constantly strive to deliver service that is better than expected, and to search for tools that enhance our ability to expose our listings to the market.

Jim Gillespie, as the CEO of Coldwell Banker, is a highly respected and knowledgeable expert on real estate.  You can see Jim often, on many of the financial news stations, commenting on what is happening in the real estate market.  These comments were taken directly from his presentation to our company, at our awards celebration, recently.

As I have posted about several times, the overall real estate market is not as bad as the press would have us all believe.  According to Jim, and all of these statistics are completely documented, of the 75 million homeowners in the US, 35% have no mortgage.  50% have fixed rate mortgages, 6% have a government loan and only 9% have subprime loans!  We also don’t learn from the press reports, that according to NAR (The National Association of Realtors) the average median price increase in real estate from 1972 through 2007 was 6.2% per year. 

When reporting about the so called foreclosure crisis, the press does not dig into the real numbers, rather they play up the percentages without noting the true effect on our industry.  According to RealtyTrac, which is a leading source for tracking foreclosures in the US, last year there were 1.2 million foreclosure filings, but there were actually 405,000 homes lost to foreclosure.  This year  they are suggesting that the filing number may jump to 1.5 million filings, which the press uses as the number of homes actually lost to foreclosure.  History tells us that the number will be well under half of the foreclosure filings.  In 2006 there were around 268,000 homes lost to foreclosure.  In 2007 that number jumped 51% to 405,000 according to RealtyTrac.   While playing up the 51% increase in foreclosures, the press does not look at how those actual numbers affect the real estate industry.  In reality, there were less than 140,000 more homes lost to foreclosure during that one year period, which represents less than a week’s worth of sales in 2007 when we saw 5.6 million re-sales and approximately 800,000 new home sales.  This is not meant to negate the tragic impact that home owners face, when losing their home to foreclosure.  It is only meant to point out that we are not getting the true picture of the real estate industry, from the press.  As I have repeatedly pointed out, real estate is local, local, local!

In Jim’s presentation to us, he went on to point out a number of extremely encouraging demographic trends that bode well for real estate, in general.  There are 78-79 million baby boomers, who are still in their prime and will be purchasing real estate for decades to come.  They are purchasing second homes, retirement homes and have discovered real estate as an investment.

The kids of baby boomers, 73 million strong, will fuel real estate for the next 5 decades.
Legal immigrants is the third demographic that will continue to drive real estate.  There are between a million and a million and a half legal immigrants, depending on the source, who arrive in this country and add value to our nation.  These people want and deserve the American Dream of homeownership.
Finally, there has been a dramatic increase in home ownership among minorities.  According to Nar, the homeownership rate of minorities has grown from 40% to 50% in the past the years, and this percentage will continue to increase.

People buy real estate, in general, for lifestyle.  According to NAR there have been 4 million jobs created,  4 million marriages and 8 million babies born in the last two years.  These are lifestyle changes that many times, trigger a home purchase.

The long term outlook for real estate is extremely strong as our population grows from 300 million today, to over 400 million by the 2040’s.  According to two major studies, there will be a long term imbalance of supply and demand.  The Brookings Institute issued a report in December, 2004 stating that by the year 2030 we would need 58.9 million additional residential units to meet the countries demand.  The Arthur C. Nielsen Institute at Virginia Tech recently did a similar study looking out to 2040 and predicted we would need 70 million additional residential units built by that year.   These studies bode very well for the long term appreciation for real estate.

Finally, according to NAR there will be 15 million households formed between now and the year 2015 outpacing the past 10 years of household formations.

I apologize for such a long post, this time around.  I thought it was very important to let readers understand that there is a lot about the state of the current real estate industry and market that we don’t get by listening to the press.  Jim Gillespie did a great job of creating some balance in analyzing the numbers and what they mean to all of us.