The Top 10 Events Impacting Real Estate In 2008

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Dec 21, 2008 3:35:04 PM

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As part of the annual Swanepoel TRENDS Report that is published every year during the first week of February, the research team wraps their four month study of the real estate industry by announcing the top 10 Newsmakers, Events and Trendsetters for the year.

The second list to be released is the top 10 events that during 2008 had the largest impact and influence on the real estate brokerage industry. Events are defined as those occurrences that transpired during the previous calendar year (2008) that made headlines and captured the attention of the real estate industry. The selection of these events was based upon their potential future impact on the industry rather than only their 2008 impact.

The Top 10 Events impacting Real Estate for 2008 are:

1. The Bailout: September 17^th

Most notably the one single event of the year was the announcement of the "Silver Bullet" designed to save the country from the subprime collapse itself and the failure/buyout of major Wall Street firms and national banks. Depending upon how effectively the Emergency Economic Stabilization Act's $700 billion is going to be allocated and managed it may prove to be the beginning of the turning point in the current economic recession.

2. The Presidential Election

In one of the most competitive, contentious, divisive and yet historic political campaigns the country responded with the largest voter turnout in history to elect an African American, Barak Obama as president. The "I have a dream" has taken a huge step toward fulfillment. However, the new administration will have little time to reflect on victory as it faces serious economic challenges and a trillion dollar plus debt that will take years to resolve.

3. In Memory Of: Countrywide, IndyMac, WAMU, Wachovia And Others

Barely one year ago in 2007 these companies were not only household names but were considered financial giants. In one short year they have become a factoid of history. Some filed for bankruptcy while others were acquired by the likes of Bank of America, the federal government, J.P. Morgan Chase and Wells Fargo. 2008 reminded us that nothing lasts forever and everything is replaceable.

4. Facing Foreclosure Frenzy

As a direct fallout of the subprime collapse, the foreclosure rate in the U.S. hit staggering levels in 2008. At the opening of the third quarter foreclosures were up 25% over the previous October with a reported one in every 452 of the country's homes in foreclosure. RealtyTrac reported last October that there was a sharp decline in foreclosure filings but it still estimated that by the end of 2008 there would be more than one million REOs on the books.

Home Prices Spiral Downward

The recession devastated many real estate markets across the country with the worst-performing towns and cities in places like central California, Miami and Las Vegas posting declines of 40% in 2008. The stranglehold on financing continued to drive home prices in many other places back to 2000 - 2002 levels, with predictions of continued declines in 2009 as unemployment reaches record highs and the financial meltdown spills over to other industries.

6. NAR - DOJ Settlement

Finally the long and protracted 2½ year legal battle between NAR and the Department of Justice (DOJ) was put to rest as Judge Kennelly issued his final judgment in November. In the end, NAR's longstanding Internet Data Exchange (IDX) policy was validated as NAR was deemed to have not admitted any liability or wrongdoing and no payments were made in conjunction with the settlement. In addition, NAR has been cleared to reinstate an updated version of its Virtual Office Website (VOW) and the MLS has been preserved and strengthened in the process. Now it's back to business.

7. Brokers Go Bust

Changing names, merging, consolidating, filing bankruptcy and closing branches was on the order of the day throughout 2008 as literally thousands of real estate brokerages companies went out of business during 2008. This included many independents as well as franchises from just about every major brand including Century 21, EXIT and RE/MAX. Also filling for bankruptcy is national franchise Help-U-Sell and Web 2.0 newcomers such as Igglo. 2009 may see even more brokers closing up shop than 2008.

8. Keeping It Short
Founded in 2006, Twitter moved into the mainstream this year as the next evolution in the social networking and micro-blogging environment. By using short text-based posts (affectionately named "tweets"), staying in touch has been given a whole new meaning.

9. ActiveRain Explodes Past 100,000 Members

As we discussed in last year's report (Trend #1 - Two Worlds; One Industry) ActiveRain has moved to the head of the social networking line in the real estate industry. With as many as 35,000 users logged on at the same time, no one else has even come close to reaching that many Realtors^® at one time. It goes without saying that ActiveRain has proven that social networking has made a home in real estate.

NAR Celebrates 100 Years

In May 1908, 120 men gathered in Chicago with the goal to "unite the real estate men of America." Today the National Association of REALTORS® (NAR) is America's largest trade association representing more than 1.2 million members. For 100 years, NAR and its members have established homeownership as a cornerstone of the American Dream and advocated private property rights as one of the fundamental principles that unite us as Americans. 2008 marked NAR's centennial birthday.

How many of these events impacted you or were/are you aware of?

John Reilly, e-PRO

Group Moderator

Dec 21, 2008 4:13:53 PM

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We are so glad to see your Real Estate Trends as a Group on RealTown, Stefan. I anticipate you will receive plenty of input from real estate practitioners that will contribute to the relevance and validity of your annual Swanepoel TRENDS Report - an eagerly awaited classic for every real estate professional and industry participant.

I certainly do not want to miss the opportunity to point out that the RealTown social networking site is now going into its 14th year serving the real estate profession....with nearly 120,000 members.

Welcome to RealTown

John

Social Media Marketing Guru

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Dec 29, 2008 9:23:41 AM

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Now here are five prediction for 2009 Trends:

1. Too many blogs, not enough readers: there will be a consolidation down to a few winners in the blogging arena, smaller, less prolific websites will be lost in oblivion, and ones like AR, this one (which is ten times better software wise than AR and will soon be fed headily by RIS, Epro, Lowes..) will increase in importance

2. As 1 above happens, off-site publishing to target a niche group (what we are doing here) will become a more and more important activity

3. Too many desks, and nobody is home: as this technological revolution progresses, fewer and fewer US workers will commute physically. These trends, and the market, will move us further in the direction of cluster housing instead of single family housing. This is an inevitable trend that will continue forever. More virtual agents, who show up mainly for appointments and closings, will not need to visit the office so often.

4. 3 above will change demographics, zoning, social habits, and society in general: he who can see these changes coming, and be in the right place at the right time on a local level will be able to predict trends and make money.

5. The market is already turning around: the money is still not going back into the stock market, and it needs to go somewhere: with non-existent returns on treasury and other investments, real estate investment will rebound heavily: I would love to be a cluster housing developer at the moment: cheap money plus demand = profit! (All those foreclosed souls need to live somewhere!)

Israel Rothman, Click on Social Media Marketing Guru to view my profile.

Edited by Social Media Marketing Guru on Mar 10, 2009 2:22:53 PM

The Gardener

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Jan 20, 2009 2:37:07 PM

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Stefan;

I only just last week became aware of your research vehicle. Thank you for the great job that was done on the 2008 copy that I saw. I remember all of the top 10 events that you speak of & agree that they are and were monumental. I yearn for much better statistical information to be available to Realtors to use in their business. The information is available but so far only in the necessary detail to Brokers at a more or less affordable price. The really detailed, best information by zip code, is only available from Data-quick that I have found so far. This for an absolutely unaffordable price for the individual agent. Claris that is being developed on a state level will have only 1 year of history, I am told. Therefore I do not consider the data very useful at all. It is history that is important. Real Estate is for the most part, after all, a long term investment. Therefore we need past years of biographical data to support and help put fear to rest as much as possible. Do you agree?What do you think?

Again, many thanks for your job well done.

Swanepoel

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Mar 10, 2009 2:02:51 PM

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Your comments are on the money Israel.

Stefan

Swanepoel

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Mar 10, 2009 2:05:36 PM

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To the Gardener,

Thanks for the kind words. Yes you are right. Good, accurate and reliable stats and information in real estate has always been a scarce commodity and when available, expensive.

Stefan

Social Media Marketing Guru

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Mar 10, 2009 2:20:59 PM

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Thank you, Stefan, it is an honor and a pleasure to recieve such a comment from you. ;-)

Duncan

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Mar 16, 2009 10:54:35 AM

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Israel,

I think you are spot on with items 1 to 4. Item 5, the rebound in the market I fear is bullish. Cash may not be earning any interest but while the rest of the world is deflating, it is fine to sit on.

Duncan.

Social Media Marketing Guru

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Mar 16, 2009 4:04:35 PM

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Well, even if I am wrong, 4 out of 5 aint bad LOL; but I am standing by my prediction: we shall see.

Pam

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Mar 25, 2009 2:09:51 PM

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Israel:

I think your predictions are right on - including #5. I have clients from Europe who are closely monitoring our real estate markets and do so because, historically, real estate in the US has been a good, long-term investment, and because our laws provide an opportunity to own property and protect buyers and sellers of real estate through things like title insurance, disclosure, and RESPA. There is still the comfort factor, as well, in owning something you can see, feel, touch, and use vs having book-entry shares or a paper certificate. I am also hearing from an increasing number of people who can move to areas which offer appealing lifestyles without having to depend on the local job market - because they can work anywhere via the internet, email, and cell phone with only an occasional in-person visit.

As for cluster housing- I bet there were a lot of people wishing they were in such a development when gas prices soared. Communities that allow people to live within walking distance of stores, schools, recreation and entertainment instead of within an hour or more commute of those services would save time, money, and foster a healthier lifestyle.

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