NEW YORK—The real estate market has become a focus in the current financial crisis. On Wednesday, real estate agents, brokers, and business owners from across the nation came to Manhattan for the three-day-long Real Estate Connect conference to find ways to revamp the way business is done.
Rationality in viewing the current market’s situation and an increase in honesty while working with clients were among the primary subjects of the conference.
Lawrence Yun, the chief economist and senior vice president of the National Association of Realtors, said that the solution to the economic crisis rests in real estate. Yun explained the current situation of the market.
“Real estate is the principle source of the economic downturn and it will be the key to economic recovery as well. Without home price stabilization I don’t see the economy recovering,” said Yun. “As home prices decline many of the consumers are losing wealth in their homes so they cannot go out and spend. So spending contracts.
“Furthermore, as home prices decline the foreclosure rates rise, so the banks then deteriorate because banks cannot lend anymore. In a capitalist society lending is part of the entrepreneurial system, and that stops. For the U.S., again, it is the real estate that has brought the economy down and it is the real estate that can bring the economy back up.”
Honesty the Best Policy
A problem that is blocking the economy from recovering, according to Yun, is that consumers have lost confidence in the market.
“Some people have the financial capacity to buy a home but they don’t want to do it. They are afraid,” Yun said. “During the boom, the home prices were outrageously high. Things were completely out of whack in relation to income, in relation to income generation.”
According to Yun, aside from a government stimulus package for the real estate market and offering benefits to encourage people to buy homes, home sellers should also place emphasis on doing business honestly.
“Most real estate is based upon referral and repeat business. Any companies who are cutting corners and looking for a quick buck are in it for one or two years. They are not going to survive the long term. Any real estate company looking to survive in the long term really has to look after their consumer’s interest over the long term,” said Yun.
The conference was hosted by Inman News, a real estate media company focused on providing brokers with information on the market.
Inman News President and CEO Don Belanger explained that in order for a real estate company to survive the current economic downturn, there needs to be a change in business practices so as to better serve the needs of the consumers.
“It’s not just bricks and wood,” said Belanger. “You’re talking about people’s lives.”
“Part of this fallout, the way I see it, is that the average consumer is questioning the value that they actually perceive going through the sale or actual purchase of a house,” he said. “It’s one of the most valuable purchases you could make.”
Belanger said that companies need to pay more attention to the needs of their customers and their current situations and to move away from the view of selling a home as solely a way to make profit.
“That’s where the market has to switch more, I believe, rather than going for a quick sale.”
Serving the Digital Marketplace
In addition to discussions on changes in the market, workshops were held throughout the day to better prepare brokers to enter the new, digitized market. Subjects such as blogging, internet marketing, and video were among those discussed.
Pierre Calzadilla, manager of Strategic Partnerships, said that businesses often have many misconceptions when getting into internet marketing.
“One of them is that every visitor is going to turn into a lead. That’s probably one of the biggest misconceptions. So they lose faith in the online consumer,” said Calzadilla. “That’s probably the biggest mistake, thinking that every lead and every email is a deal.”
According to Calzadilla, even with the use of social networking sites and high-tech web pages, companies still need to remember the basics.
“Just being online isn’t enough, just like just being a real estate agent isn’t enough. You actually have to go meet people and meet community groups to be a top agent. Being online is the same thing.”