Swanepoel
Trends Report 2011

2010 was the year that everyone continued peering through the keyhole in an attempt to see where the economy and the real estate market were headed. Unfortunately the view was much as it was at the end of 2009, albeit there was some improvement in certain quarters. Those who favor government intervention got another look at the impact - or lack of impact - via the first time homebuyer tax credit extension and a plethora of government programs. Those who are critics of loan modification programs and believe that the only answer is to move through the foreclosure process as quickly as possible have plenty of indicators to support their belief in the lack of meaningful results from any of the government's programs.

As we brought the decade to a close little has been accomplished to overcome the fallout of the recession. Household incomes are lower than they were at the beginning of the decade and the number of households overburdened with debt is higher. In the face of the looming federal budget deficits the resources the economy needs to prime the housing market are not yet on the horizon. In the interim we have millions of homeowners caught in limbo, continuing to live in a house they are no longer paying for and wondering what the lender will do; a lender that most likely doesn't have the answer either. In this Trend we'll take a brief look at where we are and attempt to draw a line in the sand.

Commentary from: the National Association of Realtors®, the Mortgage Bankers Association, the National Association of Home Builders, Case Shiller and more.

The commercial sector continues to sink under the weight of overleveraged owners who overpaid and are now facing the consequences of a hot market gone south. The federal government meets, talks and wrings its hands while the Federal Reserve continues to keep interest rates artificially low to prop up the banks and the banks take in all that "free money" and sit on it in anticipation of the time when they are going to have to face the reality of the market. All the while, lenders continue to sit on "shaky" loans, which may be in default or completely upside down.

With lenders not seeking to foreclose, they end up taking the resulting losses. With that, they are forced to write down their portfolios, which in turn drastically impacts their liquidity. Like the government regulators, lenders continue to look the other way and play the "extend and pretend" game, while the cash-strapped borrowers hold their breath.

In Washington, the PR machine spins the tale that the banks are strong but just not lending and at the same time the Federal Deposit Insurance Corporation continues to pick up one failed bank after another; an FDIC that is quickly running out of money. In the meantime, The Time Bomb Just Keeps on Ticking.

The first half of the last decade saw the birth of the major players in Social Networking. At that time, it was nothing more than a social experiment that offered users the ability to make connections, rekindle friendships and build new relationships. At the time, businesses labeled it as a fad and left it to high school kids and college students. Since then, Social Networking has exploded to include hundreds of millions of users worldwide with sites such as Facebook and Twitter.

Access to Social Networking sites like Facebook and Twitter have increased through the availability of social sharing widgets. The formerly separate messaging and Social Networking spaces have begun a redefining process in terms of how we search for and interact socially online, in essence, redefining how we communicate with each other. Although Social Networking grew significantly in terms of reach and functionality during the last decade it wasn't until the transition to mobile devices that innovations such as Location-based Services (LBS), Augmented Reality and Social Reviews began to blur the line between what is considered offline and online. Innovations at the forefront of Social Networking in 2011 will further blur that line as the new wave seeks to integrate and internalize Social Networking, revitalize Social Searching and offer up new ways to take your offline shopping experience to the next level.

This is the new media, and it's starting to come together quickly. Find out what you need to know to be current.

As the world is shrinking through the impact of technology, transportation and global economics, we are being drawn into and more deeply impacted by international real estate markets than ever before. Overall, 2010 was better than 2009. In most countries, a modest recovery was in order with a stronger momentum in the first half of 2010 compared to the latter half.

Countries showing the strongest growth were Australia, China and Canada with the countries reflecting weaker results being South Africa, Italy and Japan. Some countries such as Germany were the same as the U.S., fairly flat. Many real estate companies, economists and political leaders point to a better 2011. Although there will be many markets that show positive growth, it does not appear that it will be widely spread or strong. Too many factors still hamper confidence, with the most common being high unemployment and financial debt. Join us as we delve into:

* Argentina
* Australia
* Canada
* China
* France
* Germany
* Italy
* Japan
* South Africa
* United Kingdom


And uncover how each of these markets operate and transact real estate.

Mobile technology is ramping up at a much faster pace that PC technology ever did. Its impact is also expected to be larger than PCs and you already know what PCs did to business and your life in less than two decades. Mobile phones have jumped from simple phone-dialing services to modern Smartphones with the ability to serve as small but powerful, portable computers.

We are dependent. These small devices consume our lives as we access and utilize an array of services beyond standard calling. With the addition of web usage, calendars, email, MLS, and mobile apps, etc. to mobile devices the way that people interact with each other has forever changed. Today, when we call someone, we focus on calling a person directly (i.e. cell phone) rather than opting to call him or her at a place (i.e. work or home). This has enabled us to be more spontaneous, and more on the move.

Homeownership has been one of the bulwarks of the U.S. since it's founding and continues to be the "American Dream" for the majority of Americans. Unfortunately, over the past decade that goal has turned into a nightmare for many homeowners. As unemployment remains high, the economy still in a struggle, and homeowners mired in a bogged down real estate market, homeownership and the "American Dream" is coming under attack.

In the face of it all, the real estate industry has to remain vigilant and protect the benefits of homeownership like capital gains, mortgage interest and property tax deductions. There will be growing pressure in the months ahead to use the money saved by eliminating these tax benefits to reduce the cost of other government programs.

Get the latest info on Freddie Mac and Fannie Mae, the banks, and of course, The National Association of Realtors®.

Few people and companies really stand out as true innovators that have strived to change the existing real estate brokerage paradigm, and then were able to actually do so. Trailblazers that stand out as the most as leading business model innovators over the half a century it would be:

* Century 21 (1971)
* RE/MAX International (1973)
* Keller Williams Realty (1983)
* EXIT Realty (1996)
* Redfin (2004)


We will remember leaders such as Dick Laughlin (introduced franchising), Dave Liniger (reshaped agent compensation) and Gary Keller (redefined broker and agent cooperation). Clearly, more recent innovators have not yet enjoyed the benefit of time to fully mature their innovations, so we will still have to wait and see how large their impact will be. In reviewing creative new approaches that were launched during the last decade (2000 - 2010), and excluding companies we have discussed before such as Redfin. We discovered an interesting cross-section of innovators; some are outside the box, while others offer a new twist on a current model. Only time will tell whether or not any of these companies will turn out to be successful. It is, however, encouraging and with great anticipation that we will track the progress innovators such as:

* @properties
* Allison James
* Connect Realty
* eXp Realty
* Nextage
* Pedal to Properties
* Professional One
* Your Auction Division

The Internet has evolved from a stark message board to an interactive, collaborative medium over the past 10 years, and so too will the frameworks of cloud computing, broadband, digital readers and Internet capable mobile devices. The groundswell in the rise of consumption is staggering.

Today, access to the Internet is deemed a basic human right by four out of five people and with the work place turning to the virtual realm; the demand on broadband is at the precipice. The Internet is constantly reinventing itself and evolving as a result of the unlimited amount of information that can be shared quickly (broadband), anywhere (mobile devices) and inexpensively (the cloud).

Another stage. Another buzzword. Another opportunity to slip further behind or jump ahead. Which one will it be?

If there ever were a time in the real estate industry to embrace that magic word "diversify" it would be now. Both the commercial and residential markets are going to continue to struggle as we move into the next decade. Lenders are delaying the foreclosure process through government-sponsored programs in an effort to regulate the flow of REOs into the market, creating what many view as a "false bottom" that will only prolong a meaningful recovery. On the other hand this distressed market presents an opportunity via the REO or Short Sale process that is going to be with us for the next several years as individual buyers, spurred into action by investors, begin to move into the market.

Join us as we discuss these different opportunities in the current real estate market that Realtors® should explore to increase their profitability.

It is no longer "just" about gaining market share; in many cases it's about "survival." Everywhere there is recurring evidence that the shifting parts and financial woes are forcing many players on all levels to consolidate. As a result, M&A became the hottest trend in the real estate industry in 2010. It doesn't matter whether the sector is title, mortgage, brokerage or associations, the concept of maximizing resources while minimizing costs applies to all participants.

As more and more brokerage companies come to grips with fewer sales and shrinking margins, the emergence of new approaches to the brokerage business is certain to change not only the complexion of the industry, but its market balance as well. Add in government regulation at all levels and it is going to become increasingly more difficult for many companies to remain competitive.

Find out what is happening behind the scenes in our industry.