Friday, January 2, 2009

Top 2008 real estate events?

Stefan Swanepoel, RETrends
Real estate trends guru Stefan Swanepoel has his pointed finger on the pulse of the housing market, but the motivational speaker also has a flair for marketing dramatics. His "Top 10 Events Impacting Real Estate in 2008," billed as a "Sneak Peek into the 2009 Swanepoel Trends Report," reveals both sides of the author and educator.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - Real estate trends guru Stefan Swanepoel has his pointed finger on the pulse of the housing market, but the motivational speaker also has a flair for marketing dramatics.

His "Top 10 Events Impacting Real Estate in 2008," billed as a "Sneak Peek into the 2009 Swanepoel Trends Report," reveals both sides of the author and educator.

Let's take a critical look at his "Top 10 Events Impacting Real Estate in 2008."

• Emergency Economic Stabilization Act of 2008 -- Swanepoel says the "Emergency Economic Stabilization Act of 2008 (EESA)", was "most notably the one single event of the year." Perhaps he's a little confused by a market in turmoil. A myriad of efforts to plug the gaping hole in the housing market can be quite confusing.

While the EESA does contain some provisions for housing relief, it more broadly targeted the general economy rather than housing.

Conversely, the "Housing and Economic Recovery Act of 2008 (HERA)" contained more provisions aimed at the housing market's ills. The EESA actually shored up provisions in the existing HERA, already in effect when Congress finally got around to passing EESA.

HERA created the Federal Housing Finance Agency (FHFA), which later took control of mortgage giants Fannie Mae and Freddie Mac; HERA created Hope For Homeowners (H4H) a Federal Housing Administration (FHA) refinancing approach to save homeowners from foreclosure; and HERA laid the groundwork for the widespread use of loan modifications to help struggling homeowners avoid foreclosure.

Other differences are obvious in "$700 Billion Bailout Overshadows $300 Billion 'Hope' ". Read. Then, you make the call.

Most experts agree, when it comes to helping cure housing ills, both EESA and HERA have been relatively ineffectual. After both federal laws were in place, the projected number of housing crisis foreclosures soared from 2 million to as many as 8 million.

• The Presidential Election -- C'mon. While it was a historical election, the president-elect Barack Obama has little if any discernable impact on residential real estate, despite his good intentions. Obama has specifically reiterated "There's only one president," revealing his relatively powerlessness to effect change thus far. After January 20, maybe. What's more, a Harris Interactive poll earlier this year said less than half of Americans, only 44 percent, believe the housing market will improve once the U.S. has a new president. Any president. Most experts also believe the chances of a real housing correction in 2009 are slim to none.

• In Memory Of: Countrywide, IndyMac, WAMU, Wachovia And Others -- Companies that were once household names and financial giants are now history. Chalk one up for Swanepoel. The failures are part of today's tight mortgage money market.

• Facing The Foreclosure Frenzy
-- The subprime collapse, easy mortgage money and unsustainable home price increases, all contributed to staggering numbers of foreclosures in the U.S. With an estimated 8 million foreclosures now a distinct possibility, Swanepoel got this one right, but it should have been No. 1 on the list.

• Home Prices Spiral Downward -- With foreclosures comprising 50 percent or more of the sales in many communities in recent months, with sales down by 50 percent or more in many communities, with tight mortgage underwriting from risk averse lenders and with buyers leaving the market in droves, prices have crashed like never before in many communities. With prices not expected to bottom until late 2009, at the earliest, this should have been No. 2 on the list.

• National Association of Realtors (NAR) -- Department of Justice (DOJ) Settlement -- The long and protracted two-year legal battle between NAR and the Department of Justice (DOJ) was put to rest validating NAR's longstanding Internet Data Exchange (IDX) policy, reinstating an updated version of NAR's Virtual Office Website (VOW) and preserving the multiple listing service system. Now it's back to business. If only there was business to go back to, this would have, could have made the list.

• Brokers Go Bust -- Changing names, merging, consolidating, filing bankruptcy and closing branches was 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. National franchise Help-U-Sell also went bankrupt. Right up there with failing lenders, when it comes to less choice for consumers, brokers going bust is indeed a major event.

• 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," Swanepoel writes. WTF? OMG! ROFL. LOL. LOL some more. Dumbed down is as dumbed down does. Marsha Stewart's bedroom sheets are more significant than Twitter's "tweets" to the real estate market. GMAB.

• ActiveRain Explodes Past 100,000 Members -- 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," writes Swanepoel. Yawn. If Swanepoel's list was "Top 10 Events Impacting Social Networking In Real Estate in 2008," fine, make ActiveRain No. 1. One plus to this nod: An ActiveRain watchdog is taking a bite out of copyright crime committed by real estate professionals. The dogged consumer advocate put the heat on realty pros who become federal copyright violators and then hide under a flimsy "I didn't know" cloak of ignorance.

• NAR Celebrates 100 Years In May 1908 -- Becoming the largest professional trade group in America is quite an achievement, but longevity isn't a trend. NAR is, on the other hand, showing its age.

The industry went kicking and screaming into IT (information technology) in terms of public access; has frequently taken a monopolistic approach to selling real estate (see "Under-Reported Concerns Of Buyers Exposed", as well as related stories tagged at the end); and most recently, frequently blamed a real estate (and mortgage sector) industry-spawned housing crisis on the media.

Denial and playing the blame game was a significant 2008 real estate industry trend as it often mislead consumers into thinking not reporting the news would somehow make it go away.

Not only are some of Swanepoel's "top trends" not so "top," he also missed a few, including:

• Shift. The shift from mostly federal to much more local housing relief from the foreclosure pandemic.

• More regulations. The too-late, but future-hopeful stiffer mortgage regulations.

• The rise of credit unions. Less impacted by unbridled assembly-line mortgage lending, credit unions continued to open doors for home buyers even as other lenders shut doors.

• The recession. It was spawned by the economy's housing sector.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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Toronto condos said...

Perfect summary. I have been Toronto realtor but I can hardly remember such crazy year in the world's real estate. You mention events in the USA, I would add also the world ones - RE collapse in Spain, Britain, Ireland, boom in India and China, record-low interest rates by FED and Bank of Canada and of course events on the Canadian market - end of the unbelievable boom and the big amount of nervousness what will happen next..
Take care and best wishes
Elli Davis

Toronto condos said...

I have been realtor...for 25 years ...I intended to say :)