Looking at Realogy’s announcement this morning on their 2009 results makes me think that they should send a gift basket to the White House. The First Time Homebuyers Credit was the lifeline they needed.
With a rough year overall, the company lost 262 million dollars, the 4th quarter was strong posting an 18 percent increase in transactions. Pricing was still down for the 4th quarter as most of the homes were sold under the First Time Homebuyers Credit, but any port in the storm is one that the struggling franchise system can grab onto.
In the fourth quarter, Realogy’s core business drivers showed significant improvement, particularly home sale unit transactions, which increased 18% year-over-year at the Realogy Franchise Group (RFG) and 20% at NRT, the Company’s owned brokerage unit. These improvements were due to a combination of relatively weak fourth quarter 2008 activity and an influx of transaction volume in 2009, spurred by the original November 30 expiration of government tax credits for first-time buyers. The average home sale price declined in the fourth quarter by 5% at RFG and 3% at NRT. The fourth quarter 2009 average home sale price stabilized compared to more significant declines reported in the first three quarters due to fewer REO sales and increased home sales in the high end markets we serve.
On a full-year basis, RFG and NRT transaction sides decreased 1 percent and remained flat, respectively. RFG’s average home sale price decreased 11 percent during the full year 2009 while NRT’s average home sale price declined 18 percent. Average home sale price declines in 2009, particularly at NRT, were driven early in the year by a shift in mix of transactions away from higher priced homes and a greater level of distressed home sales. via Marketwatch
What interests me going forward is the meme floating around the real estate world that branding is less and less important for homebuyers as the internet is providing a more effective way to vet real estate agents than the associated brand.
According to a study from the National Association of Realtors excellently analyzed by Michael McClure of Professional One Franchising, we find that only 3 percent of home buyers and sellers chose their agent based upon the brand. For the Realogy stable of franchises this has to be some very scary news. Why pay all that overhead if it is not going to drive customers in the door…
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Interesting article. Thanks for sharing – I work for an independent real estate firm so this type of information is always interesting to me. Because my department handles all of our Internet requests for showing I am very aware of how important the Internet is to buyers today. Sellers are finally figuring it out as well.
"the real estate world that branding is less and less important for homebuyers as the internet is providing a more effective way to vet real estate agents than the associated brand."
I couldn't agree more. The big brands like Century 21, Prudential and Remax could find it difficult to keep their brick and mortar model successful. With more and more real estate agents looking to cut costs just to stay in business, these brand name companies will continue to lose agents as they move to other real estate firms who don't charge these high fees.