CENTURY21.COM OVERTAKES REMAX.COM

You have probably heard that the CENTURY 21 brand is turning up the heat on our web presence in 2009 – we got word of the first payoff this week.

Century21.com has overtaken Remax.com as the most heavily trafficked real estate website on the Internet, according to .comScore, which tracks online activity. During the last four months of 2008, Century21.com outperformed Remax.com each and every month, bringing over 5.5 million unique visitors to our site. We outpaced our nearest competitor during that time by more than 900,000 unique visitors.

Century21.com is leveraging its #1 position on the web in 2009 by increasing online display advertising employing the most sophisticated SEO (search engine optimization) programming in the industry.

The result – more exposure for your listings, more credibility for the brand and, ultimately, more leads for you!

ALL REAL ESTATE IS LOCAL

Interesting article in the U-T this week about certain neighborhoods holding up better than others in terms of price erosion.

Specifically, the article cited Solana Beach and coastal communities which saw an increase in median price last year, and questioned if they would be immune to the housing crisis.

While there’s no “certain” answer as to how well specific areas will hold up over time, there are clues.

First, high-end communities west of I-5 like Solana Beach and Del Mar have a sizable number of vacation or rental homes – and financing on these types of properties almost always required higher down payments, even before the credit crisis. People with a larger equity stake have more to lose in a downturn, and thus they are more inclined to hold out for a market recovery.

Second, it’s undeniable that price erosion has been driven by foreclosures. The more foreclosures, the more price erosion, the more foreclosures. It’s a vicious cycle. The higher-end communities have mostly avoided this spiral. Again, this is large part to the equity stake it took to initially get into these communities.

According to the US Census Bureau, between 1965 and 1995, the home ownership rate in America grew just two percent - from 62% to 64%. Between 1995 and 2005, however, the home ownership rate in America spiked from 64% to 69%, an annual rate of growth that was more than seven times the average of the preceding 30 years. There was only one way this could happen – the systematic loosening and removal of traditional underwriting guidelines.

What you see today is the fallout from that loosening of credit. Nationally, we are headed back toward that 62 - 64% benchmark that stood for so many years. But because the growth in home ownership was mostly at the lower end of the market, that’s where the greatest losses in value are taking place.

This entire conversation directs us back to the title of this posting – and that is that “All Real Estate is Local”. Understanding what’s happening in your neighborhood is vitally important, because discussing the “Southern California Real Estate Market” can mean 10 different things in 10 different neighborhoods.

But understanding the fundamental breakdown that caused our foreclosure crisis is critical to being able to make better decisions today. And knowing what factors are influencing activity in your neighborhood will give you a much better measuring stick of what is likely to happen in the future.

LOWER PRICES AND SURGING SALES ACTIVITY

What does it mean when prices fall 34% from one year earlier but sales increase by more than 50% at the same time?

It means there are some incredible deals out there and a new generation of buyers is back in the market place.

DataQuick reported this week that the median home price in San Diego stood at $300,000 in December, down from $425,000 one year earlier. For all of Southern California, the median price was $278,000.

In the hardest hit areas of Southern California, such as Riverside and San Bernardino, the sales bounce has been even more dramatic. Sales activity in Riverside was up 77% in December and San Bernardino was up over 88%.

So here’s what the market looks like today:

Foreclosures are still driving the market. As we’ve talked about before, the vast majority of our foreclosures have been at the lowest price points. With an abundance of lower priced homes on the market, first-time buyers who may have been renting the past three, four or even five years are now pouring back into the market.

The other big driving factor is interest rates. As you know, 30-year fixed rate are available in the low 5’s right now, creating almost a perfect storm of discounted housing with the lowest possible payments for first time buyers. If your marketing is at least somewhat focused on this group, you’re missing a huge opportunity.

Finally, I believe that help is on the way. The Obama administration has promised to do whatever it takes to restore confidence in the housing market, and I expect to see both incentives for buyers to get back into the market and help for those who have lost value on their homes.

Two other encouraging pieces of news in the DataQuick report: the number of resales in San Diego involving foreclosures fell from 52% in November to just over 50% in December. That means half our sales are for private owners with enough equity to sell.

The other interesting statistic is that DataQuick found the average payment on homes sold regionwide in December was $1,239, down from $2,060 just one year ago. After adjusting for inflation, payments are now down 54% from the peak of the market in July of 2007.

Affordability is back in our market for the first time in almost a decade, and it’s time for buyers (and their agents) to be decisive in the face of incredible opportunity.

PRESIDENT AND CEO ANNOUCEMENT

THE NEW 21ONLINE.COM SET TO LAUNCH

CENTURY 21 has announced that the new and improved 21Online.com site has officially launched!

The new 21Online.com has a number of new and upgraded features that should make this site both more functional and valuable to each of you. These enhancements include an improved search tool that makes it easier to find documents and other information within 21Online.com, and a "My Favorites" section which allows you to bookmark individual pages within the site and access them quickly when you login.

Upon logging into the new 21Online.com, you will immediately notice a more versatile and customizable homepage that will display the information you need. The new "My Contacts" tab will allow you to easily maintain relationships with both past and present clients, and is initially populated with the individual contacts that you had in your eGreetings/eNewsletters contact list on the prior version of 21Online.com.

Your listings can also be quickly and easily accessed directly from the 21Online.com homepage. Also, both eGreetings and the eNewsletter function have been updated under the new eCampaigns tab. The eCampaigns section of the site is a significant upgrade in style and functionality from the its predecessor, and CENTURY 21 has promised lots of regularly updated content under this tab to help facilitate your eMarketing efforts.

To allow time for you to become familiar with navigation and use of the new site, both the old and new versions of 21Online.com will be running until Sunday, February 15th. After this date, only the new 21Online.com will be available. To access the new site, visit 21Online.com and click on the top link featured in the "Alert Message" or in the main banner on the homepage.

Let me know what you think – your feedback is important and I want to make sure everyone is being served by the resources made available to us through the CENTURY 21 system.

THE BIGGER THE DROP, THE BIGGER THE BOUNCE

Interesting statistics from DataQuick about November home sales in Orange County. While the overall median price was off more than 31% from a year earlier, there was a 39% increase in the number of units sold. And if you take new construction out of the equation, resale activity was up over 50% from one year earlier.

Some of the biggest bouncebacks were in the areas with the steepest price declines. For example:

* Tustin (92780) median price down 51%, sales volume up 230%
* Santa Ana (92707) median price down 42%, sales volume up 358%
* Stanton (90680) median price down 47%, sales volume up 111%
* Foothill Ranch (92610) median price down 24%, sales volume up 100%

What we see here is a trend that has been playing out around the country. The vast majority of foreclosures are at the lower price points. Consequently, many of the biggest price corrections have taken place in entry-level neighborhoods. And with increased affordability, investors and first-time buyers are the ones rushing back into the market and snapping up discounted homes.

In some of the higher-end communities, the price drops have not been as significant.

* Anaheim Hills (92808) median price down 2%, sales volume up 20%
* Dana Point (92629) median price down 6%, sales volume down 40%
* Ladera Ranch (92694) median price down 9%, sales volume up 12%

Of course, it’s more important to look at individual neighborhoods than larger communities, but there are some interesting generalizations which can be drawn. This is a professionals’ market, which is why it’s more important than ever for motivated buyers and investors to be working with us.

THE PERFECT STORM

The economy is on everyone’s mind right now, and for good reason.

Since October, we have seen the stock market plunge, jobs disappear, and a culture of economic fear start digging into our national psyche.

And while it’s too soon to know how things will turn out, I do believe that there are going to be long-lasting cultural and economic changes that follow these events for many years to come. The consulting firm “Iconoculture” recently cited several areas where Americans are likely to change their behaviors.

For example:

CONTROL – Consumers (and home buyers, and agents) are clamoring for ways to reestablish a feeling of control over their finances.

SECURITY - Consumers are looking for partners in confidence like never before — brands and services that deliver reliability, trustworthiness and even an order of calm.

SAVVY - Consumers still want to find clever ways to beat the system, and they want our help.

STABILITY - Roller coasters were so last year. Today’s shoppers, more than ever, will value grounded practicality over the big ups and giant downs of chaos and uncertainty.


These changes in psychology will affect different groups in different ways, but all will be affected.

At CENTURY 21 Award and CENTURY 21 Superstars, we understand the times that we’re living in and we’re sensitive to what our clients are looking for. We are working collectively as an organization to empower our agents and our customers with information, data and strategies to bring a higher degree of certainty to the uncertain times we are living in.