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Complaints with Gmac Mortgage Insurance Claims

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  • pg 1
									        2010
Swanepoel Trends Report

          The Economy, Commercial Real
          Estate, and Social Media, plus 7
                    Top Trends

2/22/10            David R. Phillips, RCE, CAE   1
          Residential Economics
          •   Bailouts
          •   Stimulus Packages
          •   Foreclosures
          •   Have We Hit Bottom?
          •   Housing Starts
          •   Potential Potholes Ahead


2/22/10              David R. Phillips, RCE, CAE   2
          Bailouts and Stimulus
• 4 consecutive quarters of negative GDP
  until a 2.2% growth in Q3 2009
• 140+ banks closed in 2009 – more than in
  1992’s S&L crisis
• The rest of the world is rebounding faster
  from the global recession



2/22/10         David R. Phillips, RCE, CAE    3
             Foreclosures
• No good source of data, but
  Realtytrac.com is often sited as source
• 3.5 million foreclosures in 2009
• Banks are holding properties and creating
  a shadow inventory
• 2nd wave of foreclosures to hit in 2010 with
  88% of option ARMS being recasted
• 94% of option ARMS are interest only
2/22/10         David R. Phillips, RCE, CAE   4
          Have We Hit Bottom?
• Two Schools of Thought
• #1 The Glass is Half Full
     – The worst is behind us
     – GDP headed up
     – Home sales will be up in 2010
     – Consumer confidence is up
     – Housing Affordability Index at all-time high
     – Inventory down, building should increase

2/22/10              David R. Phillips, RCE, CAE      5
          Have We Hit Bottom?
• Two Schools of Thought
• #2 The Glass has some water in it
     – Slow 1st quarter with improvement in 2nd half
     – After-tax-credit sluggishness
     – Foreclosures are looking at second wave
     – Distressed sales are 30% of market
     – Inventory may increase due to increased
       foreclosures and the shadow inventory

2/22/10             David R. Phillips, RCE, CAE        6
            Housing Starts
• Housing shortage ahead?
• 1 to 1.4 million households added each
  year, but only adding 560,000 currently
• Still a glut of inventory on the market
• The overbuilding of the past 10 years is
  resulting in under-building now
• We will not be ready when the surplus is
  sold and more units are needed
2/22/10         David R. Phillips, RCE, CAE   7
          Potential Potholes Ahead
• More foreclosures ahead
• The impending debacle in the commercial
  real estate market
• Increased inventory from the shadow
  market and more foreclosures
• The true effects of the housing tax credit
• Tight credit, lack of private lending
• Continued unemployment
2/22/10          David R. Phillips, RCE, CAE   8
                      Quote
“Most of the tax credit is simply shifting sales
  from one period to another. It doesn’t get
   rid of the fundamental problem; there is
             still a glut of houses.”

              Dr. Patrick Newport, Economist
                    HIS Global Insight




2/22/10           David R. Phillips, RCE, CAE   9
          Commercial Real Estate

          Impact of the Ticking Time Bomb




2/22/10            David R. Phillips, RCE, CAE   10
                   Quote

      “The commercial sector has
      become a ticking time bomb.”
              Stefan Swanepoel




2/22/10        David R. Phillips, RCE, CAE   11
                    Quote
    “The most prominent area of risk for
     rising credit losses at FDIC-insured
      institutions during the next several
          quarters is in CRE lending.”

                Sheila Blair, Chair
                      FDIC


2/22/10         David R. Phillips, RCE, CAE   12
          The Commercial Problem
• No money from Wall Street available
• Banks have tightened their lending
  requirements
• Prices for commercial real estate dropped
  40% in the last two years
• Bad economy, reduction in consumer
  spending, and unemployment

2/22/10          David R. Phillips, RCE, CAE   13
                    Quote
     “The commercial real estate loan s
     dead in the water. A severe ongoing
    credit crunch in commercial lending is
      hampering the economic recovery.”

               Dr. Lawrence Yun
              NAR Chief Economist


2/22/10         David R. Phillips, RCE, CAE   14
          The Commercial Fix
   • Job creation/less unemployment
   • Real Estate Investment Trusts (REITs)
   • Initial Public Offerings – a new wave
     coming
   • Solutions need to be in place before the
     2011 when commercial loans reset



2/22/10          David R. Phillips, RCE, CAE    15
             Social Media

Continual Confusion, Infinite Innovation, and
           Endless Opportunities



2/22/10        David R. Phillips, RCE, CAE   16
                    Quote
 “The game has changed. The new game is
  called the Golden Triangle and here are its
  players: Social Content Production, Mobile
      Media, and Real-Time Information.”

               Stefan Swanepoel




2/22/10         David R. Phillips, RCE, CAE   17
          Social Content Production
  “Social Media today is a pure mess: it
   has become a collection of countless
     features, tools, and applications
      fighting for a piece of the pie.”

                        Ravit Lichtenberg
            Founder and Chief Strategist, Ustrategy.com




2/22/10                David R. Phillips, RCE, CAE        18
          Changes in Social Media
• It is now a business opportunity
• User growth is coming from older people
     – Up 60% in 35-54 year olds
     – 55 and over have increased 77%
     – 48% of adults use social media




2/22/10            David R. Phillips, RCE, CAE   19
                 Mobile Media
• Mobile Internet users are expected to grow
  30% in 2010.
• Mobile users on social networks is
  expected to increase 60% in 2010
• Location-Based Services (GPS)
     – RPR Mobile App
     – Navigation, locating nearby services/people
     – Traffic alerts and location-based ads/notices

2/22/10             David R. Phillips, RCE, CAE        20
          The Rise of Real Time
•   Twitter
•   FaceBook
•   Ustream – live video from smart phone
•   Posterous – email to blog posts
•   Cell phone cameras
•   Texting


2/22/10          David R. Phillips, RCE, CAE   21
                    Quote
 “The social web is you. It’s your customers,
   your friends, your family, your employees,
    your shareholders, your colleagues, and
    everyone else. Social media presents a
    new avenue to listen and communicate.”

               Stefan Swanepoel



2/22/10         David R. Phillips, RCE, CAE   22
                 Quote
  “If you don’t master Social Media,
          your competition will.”

             Stefan Swanepoel




2/22/10      David R. Phillips, RCE, CAE   23
            Seven Top Trends

          #7 Straddling the Fence
             Are You Committed?




2/22/10         David R. Phillips, RCE, CAE   24
             Career Facts
• Even in good times, only 1 in 4 agents
  make it past their first year
• Median income for a Realtor® in 2004 was
  $49,300 and in 2008 it was $36,700
• 26% of Realtors® indicate that real estate
  is not their only job
• 44% indicate that real estate was their
  primary household income
2/22/10        David R. Phillips, RCE, CAE   25
                      Quote
     “Historically when the market slows real
      estate agents often turned to the support
          services such as appraisal, title or
       insurance to find some additional work.
        But now, those industries are suffering
               along with real estate…”

                  Stefan Swanepoel


2/22/10           David R. Phillips, RCE, CAE   26
          Ethical Question

     Should Realtors® who are
    working part-time disclose that
         fact to their clients?




2/22/10       David R. Phillips, RCE, CAE   27
          Impact on Consumers
•   What are my agent’s priorities?
•   Who will handle urgent issues that arise?
•   Will I get promised marketing services?
•   Are my agent’s skills up-to-date?
•   What happens when timing is critical?
•   Will my agent completely leave the
    business?

2/22/10           David R. Phillips, RCE, CAE   28
          Impact on Associations
• Ethics complaints and arbitration requests
  are on the rise
• Declining membership
• Need for weekend and evening hours
• Volunteerism good and bad
     – Some have more time/less business
     – Some have less time/other career


2/22/10            David R. Phillips, RCE, CAE   29
           Impact on Brokers
•   Difficulty in communicating effectively
•   Loss of commission generation
•   Increase in complaints
•   Broker having to cover the transaction
•   Need to provide more technical support
    and promotion services


2/22/10           David R. Phillips, RCE, CAE   30
              Broker Stats
51% of brokers surveyed said they held
  a second job which is up 21% from a
               year ago.

    42% of brokers indicated they spent
      more than half their time at their
               second jobs.
2/22/10         David R. Phillips, RCE, CAE   31
  Impact on Dual-Career Agents
• Cost of entry was high, but cost of staying
  is still worth it.
• Agent annual net income is $30,900
• 39% report earning less than $25,000
• 16% report earning $100,000 or more
• Full-time agents have to cover the
  transaction for part-timers

2/22/10         David R. Phillips, RCE, CAE   32
 Considerations for Associations
• Should we offer more evening/weekend
  classes and services?
• How do we need to change the way we
  communicate with members?
• How do we avoid becoming co-dependent
  on part-time agents (providing service to
  help them stay in the business in return for
  dues dollars)?
2/22/10         David R. Phillips, RCE, CAE   33
          #6 In Search of Innovation

          How Do “You” Change the Game?




2/22/10            David R. Phillips, RCE, CAE   34
          NAR Game Changers
•   0ver 200 entries
•   14 Winners funded at $1.7 Million
•   22 Runners Up funded at $170,000
•   Others received $500
•   $2 Million total invested to generate new,
    game changing ideas


2/22/10           David R. Phillips, RCE, CAE    35
                              Quote

“Traditional players often cannot change, but
    they can invest in the game changers.”

                              Ken Auletta
          Author, Googled: The End of the World as We Know It




2/22/10                   David R. Phillips, RCE, CAE           36
            Winning Ideas
• Trademarking Broker Listing Coop to
  change the name MLS to BLC
• Rating system for all real estate services
  including the licensee
• A Realtor® Finder system that allows
  consumers to match needs with skills
• Create the virtual Realtor® Association

2/22/10         David R. Phillips, RCE, CAE    37
          CAAR’s Game Changer
• One of the 22 Runner-up prizes
• Funded at $10,000
• Develop a mobile app for Realtors® to use
  to access the Realtors® Property
  Resource
• Mobile Web based to work on all smart
  phones
• GPS based to deliver on-site data
2/22/10        David R. Phillips, RCE, CAE   38
              #5 Read All About It

          The End of Advertising as We Know It




2/22/10               David R. Phillips, RCE, CAE   39
          Winds of Change
• Newspapers and Magazines are struggling
• Subscriptions and circulation are down
• Many newspapers are out of business
  (105 closed during 2009)
• Ad revenues dropped 30% in 2009
• There are still over 1400 daily newspapers
  so the industry is far from dead

2/22/10        David R. Phillips, RCE, CAE   40
                            Quote
          “If TV represented a body blow to the
          newspaper industry, the world wide web
           may prove to be the nail in the coffin.”

                             About.com
                    (always consider the source)




2/22/10                 David R. Phillips, RCE, CAE   41
                        Quote
     “Marketing is not about traffic, it’s about
        conversion…brokers that decide to
     advertise online need a clear and defined
          game plan, and they had better
      understand their return on investment.”

                      Tom Tognoli
            COO, Intero Real Estate Services


2/22/10             David R. Phillips, RCE, CAE   42
                     Facts
• Decline in print ads mirrors the market and
  the economy
• After 2001 recession, print ads rebounded
• Direct Mail has been declining as well and
  has dropped from #1 ad revenue
  generator to #4 behind the Internet, TV,
  and newspapers


2/22/10         David R. Phillips, RCE, CAE   43
                     Quote
    “Real estate advertising will not go
    back to the way it used to be in 2006.
      The down market has created a
        needed reevaluation of how
     Realtors® advertise. After recovery,
         we will find a new normal.”

               Dave Phillips, CEO
             CAAR Real Estate Weekly
2/22/10          David R. Phillips, RCE, CAE   44
                  The Shift Is On
                    2005                           2009
•   Newspaper       45.1%                          28.8%
•   Online          36.4%                          55.4%
•   Other Print     7.8%                           6.4%
•   Direct Mail     5%                             3.8%
•   TV              2.9%                           3.3%
•   Other           2.8%                           2.3%


2/22/10              David R. Phillips, RCE, CAE           45
                   Quote
 “Print and TV spending will go down to
     nearly zero and online spending
     starts to ramp up as the housing
         market starts to improve.”

               Spencer Rascoff
               COO, Zillow.com
             (consider the source)

2/22/10        David R. Phillips, RCE, CAE   46
                   Quote
  “Prioritize your advertising efforts and
   commit to evaluating and changing it
         when and where required.”

               Stefan Swanepoel




2/22/10        David R. Phillips, RCE, CAE   47
          #4 Change By Design

              Time to Grow Up




2/22/10         David R. Phillips, RCE, CAE   48
          Professionalism is the Key
• Professionalism means different things
• Today, it means changing the way you do
  things and being better at what you do
• Stop waiting for someone to “fix” the
  industry or the economy – take the
  initiative and step out with the answer



2/22/10           David R. Phillips, RCE, CAE   49
                         Quote
    “This market will separate those who are
     skilled and true professionals from those
     who aren’t, and will force the industry to
              set its standards higher.”

                     Martin Bouma
          The Bouma Group, Keller Williams Realty



2/22/10              David R. Phillips, RCE, CAE    50
          What Buyers Want
• Agents to have a better understanding of
  the direction of the market
• Agents to be better at negotiation (82%
  were dissatisfied)
• More assistance in mortgage process
• Knowledge about buying distressed
  properties
• A faster response time from their agent
2/22/10        David R. Phillips, RCE, CAE   51
                     Quote
   “What they (consumers) are looking for is
         trust, confidence, transparency,
    interpretation of information and services
      (mortgage, home warranty, inspection,
           etc.), all of which takes time.”

               Stefan Swanepoel


2/22/10          David R. Phillips, RCE, CAE   52
          Solutions to Grow Up
• Change from a short-term transactional
  relationship to a long-term relationship
• Define your Unique Selling Point (USP)
• Improve your knowledge base
• Let consumers grade/rate your service
• Connect with consumers in the new media


2/22/10        David R. Phillips, RCE, CAE   53
                     Quote
 “It is no longer about being licensed. It is no
    longer about being a member of the NAR.
   Few consumers understand the difference.
   It is no longer about the letters behind your
        name. The consumer doesn’t care.”

               Stefan Swanepoel


2/22/10          David R. Phillips, RCE, CAE   54
                         Quote
           “We used to call it education and
          training. Now it is called knowledge
                and skills enhancement.”

                   Stefan Swanepoel




2/22/10              David R. Phillips, RCE, CAE   55
          Rated by Consumers
• Houston Association implemented in 2009
• Initial skeptics, but only 200 have opted
  out of the program
• 26,000 survey responses
• Mostly positive feedback
• Satisfaction with value received took a
  nose dive when the market tanked

2/22/10        David R. Phillips, RCE, CAE   56
                    Quote
 “Professionalism has been defined in many
      ways, but they all have one thing in
    common: it’s a mindset. It is not about
  what one does but rather how one does it.”

              Stefan Swanepoel




2/22/10         David R. Phillips, RCE, CAE   57
    Characteristics of Professionalism
•   Driven by purpose, meaning and values
•   Constantly seek ways to improve
•   Focus on what you do best
•   Focused on people
•   Consistent and committed




2/22/10          David R. Phillips, RCE, CAE   58
      #3 Franchising Mix Modifies

          Do You Want to Sit Up Front?




2/22/10           David R. Phillips, RCE, CAE   59
               Franchising
• 40 years since it entered residential real
  estate
• Has shaped and re-shaped the industry
• Its impact ranks with the MLS and the
  Internet as the top three game changing
  strategies since WWII
• Expanded significantly since the 1990’s

2/22/10         David R. Phillips, RCE, CAE    60
                   Quote
      “There is an obvious need for
       consolidation in the number of
    franchisors just based on the size
               of the market.”

              Stewart Wilson
              Sr. VP, Realogy
2/22/10        David R. Phillips, RCE, CAE   61
          Changes to Franchising
• The roll-up of multiple brands under one
  owner
• The evolution of the real estate business
  model
• The adoption of franchising by historically
  independent brokers



2/22/10         David R. Phillips, RCE, CAE     62
          Franchise Roll-up
• HFS (now called Realogy) changed the
  game in 1995
• Acquired multiple brands
• Paid companies to join franchise system
• Acquired firms as company-owned stores
  and then signed them to long-term
  franchise agreements

2/22/10        David R. Phillips, RCE, CAE   63
      Evolution of Business Model
                       Quote
“What has happened…is that every time someone
 comes up with a better way or different approach
  to solving the real estate business model, a new
   franchise is usually born and offered up as the
                    next big thing.”

                 Stefan Swanepoel



2/22/10          David R. Phillips, RCE, CAE    64
  2009 Franchise Moves of Note
• C21 Town and Country (largest C21 in the
  world) filed for bankruptcy
• Schwetzer (Huge CB franchise) was
  acquired by much smaller Weir Manuel
• Metro Brokers (largest GMAC) moved to
  Better Homes and Gardens
• Brookfield RPS (Canadian firm) acquired
  Real Living (2008’s most promising new brand)

2/22/10          David R. Phillips, RCE, CAE   65
          Categories of Franchising
               •   Traditional
               •   Managerial
               •   Collaborative
               •   Residual
               •   Regional
               •   Niche
               •   Discount

2/22/10             David R. Phillips, RCE, CAE   66
                   Quote
 “(the bad market) has caused many of
      them to cut back on the services
    offered…causing many to question,
    legitimately or not, why are they still
           paying franchise fees.”

              Stefan Swanepoel

2/22/10        David R. Phillips, RCE, CAE   67
           #2 Time for Market
             Fundamentals
    Is the Tax Credit All It’s Supposed to Be?




2/22/10           David R. Phillips, RCE, CAE    68
          Tax Credit Confusion
• Facts are hard to find, opinions are not
• It is either the answer or the problem,
  depending on who you want to believe
• NAR’s Lawrence Yun believes it is a drop
  in the price of the home and not really a
  tax credit
• 1.4 million taxpayers have claimed credit
• 57% had Gross Income less than $50K
2/22/10         David R. Phillips, RCE, CAE   69
           Tax Credit Costs
• NAR claims it added $22 billion to
  economy so far
• $10 billion in tax credits so far and $15
  billion total expected by April’s deadline
• 94,000 of the 1.4 million claims are
  expected to be denied
• Most buyers would have purchased
  anyway
2/22/10          David R. Phillips, RCE, CAE   70
                             Quote
“In about 4 out of 5 cases, the tax credit
     went to people who would have
     bought a home anyway. So that
    means the real cost of getting that
  one extra buyer into the market is five
      times $8000 – about $40,000.”

          Andrew Jakabovics, Center for American Progress
2/22/10                  David R. Phillips, RCE, CAE        71
      #1 Protecting Your #1 Asset

          Mission Statement: To Organize
                All Real Estate Data



2/22/10            David R. Phillips, RCE, CAE   72
     Realtor® Property Resource
• Nickname – RPR
• All property data from every property in the
  United States mashed up into one giant
  database for Realtors®
• Plus, Realtors® can add opinions,
  observations, and insights on properties
• Available only to Realtors®
• Will it include your MLS data?
2/22/10         David R. Phillips, RCE, CAE   73
                                Quote
       “MLS and Realtor® Association
      Executives would be well advised to
      be reminded that Realtors® own the
        listing information, not the MLS.”

                             Walt Baczkowski

          CEO, Metropolitan Consolidated Association of Realtors®



2/22/10                     David R. Phillips, RCE, CAE             74
             Data in RPR
• Unlisted properties from builders and
  FSBO’s
• Mortgage and other lien information
• Foreclosure information
• Archived property photos
• Insurance claim information (CLUE)
• Environmental information

2/22/10         David R. Phillips, RCE, CAE   75
What’s Not To Like About RPR?
• Many MLS’s already have rich data
• Money – it will start as a free service, but
  many think it may have a cost later
• Money – RPR is projected to sell analytical
  information and raise lots of money –
  some think MLS’s and even brokers
  should get a piece of the pie
• Could become a National MLS
2/22/10         David R. Phillips, RCE, CAE   76
              RPR’s AVM
• Automated Valuation Model (AVM)
• Popularized by Zillow in 2006
• Not very good at first, but getting better
• RPR’s better data could present
  opportunity to create the “gold standard”
• Without MLS data, the gold standard will
  be impossible to achieve

2/22/10         David R. Phillips, RCE, CAE    77
          Our Own Worst Enemy
• We give our data away to strangers, but
  resist giving it to ourselves (RPR)
• 93% of listings are found on multiple sites
  and were provided to these strangers for
  the promise of more exposure
• NAR and RPR smelled gold and did not
  plan to share it with the rest of the family
• Can’t we all just get along?
2/22/10          David R. Phillips, RCE, CAE     78
   Possible Competition for RPR

          •   Zillow and First American
          •   Trulia and Google
          •   Google
          •   Realtor.com and First American
          •   Someone we have not heard of yet
          •   Ourselves

2/22/10               David R. Phillips, RCE, CAE   79
                      Quote
    “Whose ox gets gored, who benefits and
    where the money flows is anybody’s guess
      at this point. But what I can safely say is
     that this is a significant shock to a system
                     that needs it.”

                   Brian Lawson
                Consultant and Lawyer


2/22/10           David R. Phillips, RCE, CAE   80
          Questions and Comments

            David R. Phillips, RCE, CAE
                 Dave@caar.com
               @DRPnet on Twitter

2/22/10            David R. Phillips, RCE, CAE   81

								
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