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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (15022)	11/13/2003 5:33:01 AM
From: biometricgngboy	Read Replies (1) \| Respond to of 306849

Realty recovery depends on jobs, panel says Falling interest rates mitigate rising vacancies, flat prices as renters buy homes By Kristi Arellano , Denver Post Business Writer Denver's real estate power brokers on Wednesday dissected the struggling market and ventured to predict how and when it will recover. Their conclusion: A full-fledged recovery hinges on job growth. Panelists at the Rocky Mountain Commercial Real Estate Expo and University of Denver Fall Economic Forecast said rising vacancies and flattened prices have cut across all sectors, but falling interest rates have dulled the pain. Low mortgage rates have buoyed the investment and residential markets, but that has resulted in an exodus from apartments. Hendricks & Partners' Chuck Sweeney estimates 40 percent to 50 percent of the renters who are leaving apartments are doing so to buy. To fill each vacant unit, about four new jobs must be created, he said. At that rate, it will take 60,000 new jobs to fill existing metro-area vacancies. Since 2001, Colorado has lost more than 70,000 jobs. Apartment building sales have fallen from their record levels, but investment demand is still steady, Sweeney said. He predicted at least two record-setting sales before the end of the year. The market for homes priced below $300,000 remains strong, but Peter Kudla, president and chief executive of Metropolitan Homes said above $700,000, sellers are taking a beating. Rich incentives from sellers are indicative of a price correction occurring in the market, he said. New-home sales through the first three quarters of the year are down 9.7 percent compared with the same period in 2002, according to a report issued this week by the Genesis Group. The average price of a new, detached home was up 12 percent to $302,356 in the third quarter. The report also showed that a resale home worth $100,000 in the first quarter of 1996 would have sold for $186,000 in the third quarter of this year - the same price it would have sold for a year ago. Kudla said future housing development will be shaped by projects similar to the Lowry and Stapleton redevelopments, mixed-use projects that encourage walking known as new urban communities, and transit-oriented development. While Kudla was bullish on housing's prospects, experts in other sectors weren't quite as positive. Frederick Ross office brokers Nathan Johnson and Phil Ruschmeyer said the metrowide office vacancy rate is close to 25 percent, but that the downturn has been driven by a decline in demand rather than by overbuilding, as it was in the 1980s. They estimated it will take three to five years for the office market to return to balance. Demand for prime retail locations will remain high, said Phil Hicks, president of David/Hicks Brokerage. Quick-service restaurants like Noodles & Co. and Qdoba will help boost demand, but Hicks anticipates a decline in demand from the traditional fast-food sector, particularly burger chains. Hicks said the anticipated closing of nine Cub Foods stores will provide an opportunity for landlords and developers to bring better tenants into some prime locations. So far, six of the nine Cub locations have been sold or leased. The industrial market, which had an 8.3 percent vacancy rate in the third quarter, is expected to become a serious battleground as large developers with new projects near Interstate 70 and E-470 compete for tenants, said industrial broker Randy Hertel, vice president of Majestic Realty Co. He anticipated that construction and absorption of industrial space would increase in 2004 while vacancy rates decline and lease rates remain flat. denverpost.com

To: marginmike who wrote (15022)	11/13/2003 7:37:08 AM
From: Elroy Jetson	Respond to of 306849

As you point out, real estate brokerage is an oligopoly in most major markets. Some, like the ever clueless Tradelite, claim not to know what an Oligopoly looks like. Here's an example from the current issue of the "Los Angeles Business Journal." The two largest residential real estate brokerage firms in Los Angeles County, NRT/Cendant and Berkshire Hathaway, do more sales than the next largest 25 firms. I stop at the 14th largest firm, Nelson Shelton, because we are already dealing with a single office firm. Sales __________ Ownership $17.2 Billion __ NRT dba Coldwell Banker (Cendant) $_5.0 Billion __ Prudential California (Berkshire Hathaway) $_2.7 Billion __ Re/Max All Cities (Franchisee) $_2.2 Billion __ DBL Realtors $_2.0 Billion __ Re/Max Palos Verdes (Franchisee) $_1.8 Billion __ Dilbeck GMAC (General Motors) $_1.6 Billion __ Shorewood Realtors $_1.3 Billion __ Realty Executives Santa Clarita $_1.1 Billion __ Re/Max on the Boulevard (Franchisee) $_1.1 Billion __ Re/Max of Valencia (Franchisee) $_1.0 Billion __ Prudential California Mulhern (Franchisee of Berkshire Hathaway) $__.8 Billion __ Pinnacle Estate Properties $__.7 Billion __ South Bay Brokers $__.7 Billion __ Nelson Shelton & Associates What sort of superior service is provided by the largest two brokerages? Nothing special, they just bought all of their largest competitors. Cendant used their Appolo Partners acquisition structure until this was disallowed by the SEC. Berkshire on the other hand simply has a lot of cash. Is it any wonder why Warren Buffet likes the business? In how many industries could you easy acquire an oligopolic position?

To: marginmike who wrote (15022)	11/13/2003 10:31:35 AM
From: Tradelite	Read Replies (5) \| Respond to of 306849

Just did a Realtor.com search for New York City....found 1,001 home-sale listings by many different brokerage firms and prices ranging from very low to $13.5 million. If the brokers in New York are making their properties available for everyone to see on the internet, they must also have a local MLS system whose member-brokers cooperate with each other to show and sell homes--same as in most other areas of the U.S. Doesn't this enable a buyer to browse for available listings on the internet, then contact one brokerage firm and ask to see listings of not just that broker but other brokers, too? If so, I'm not sure what you mean about "controlling the listings." It's a matter of law that property offered for sale on behalf of an owner has to be sold by a licensed broker. Are you saying you don't like this law and don't want to work with licensed brokers to shop for homes? Please define what you mean by "controlling" and what you think needs to be done to change this?