Big referral fees lure agents into second-home market
New developments vie for baby boomers’ business
Friday, October 26, 2007

By Bernice Ross
Inman News

Would you like to receive $5,000 or more for a single telephone call? If so, there’s a great way to make more money if you’re willing to step out of your normal real estate market area.

The market may be in the doldrums, but there’s one part of the market that seems to be going strong — that’s the second/retirement home for the baby boom generation. If you’re willing to make a referral outside your area, you can make a substantial amount of money for doing nothing more than making a phone call.

Baby boomers are flush with cash. In 2006, boomers between the ages of 50 and 60 reportedly spent $1 trillion. We also know from the demographics that people are most likely to purchase a second home between the ages of 50 and 60. If you examine the birth statistics, the peak of the baby boom occurred in 1960. Peak spending occurs at age 46. Consequently, the demographics suggest that the market for second or retirement homes should be hitting its peak over the next 10 to 15 years.

Because of the substantial increase in property values and corresponding increases in property taxes and insurance, many older clients are wondering how they will live on a fixed retirement income. In many states, property taxes go up as properties appreciate. This poses a difficult situation in that many owners will be forced out of their current homes because they cannot afford the increase in property taxes. A second issue is that many can no longer afford the increased rate of insurance. Consequently, many retirees are looking for opportunities to find great places to live that have appealing amenities, a warm climate and a lower tax burden.

I recently spoke with John Chin of Land Resource. They have an intriguing model that is attractive to both brokers and clients. The Land Resource model is designed specifically for people who want a second home or a home for their retirement. The Land Resource developments are located in North Carolina, South Carolina, Tennessee and West Virginia. According to Chin, they’re selling “a lifestyle — coastal, mountain or lake living in warm-weather climates with health and financial peace of mind.”

When Land Resource selects a property to develop, it must meet a number of important criteria. The most important is keeping the cost of living at a minimum. Consequently, their developments are in relatively warm locations where residents can minimize the amount of money they spend on heating and air conditioning. They also look carefully at minimizing the total tax burdens their owners have to pay. Their current developments have both low state and property taxes. They also select locations with “medical friendly” services and prices. An additional requirement is that each of their developments be no more than 30 minutes from a major airport and city. Residents have the benefit of enjoying a relaxing lifestyle with access to major services.

Another important criterion is conservation. “With each of our properties, we strive to strike a perfect balance between master-planned-community design and the natural areas that surround it. By protecting natural, open space on our properties, we help maintain stream and water quality, as well as providing habitat for plants and wildlife in the area.”

From a brokerage perspective, Land Resource properties are quite appealing. Their referral fee is a full 5 percent to the referring broker. Like the Ginn Co., they require a $1,000 refundable deposit to visit their property. They cover up to $350 of your clients’ airfare, and provide hotel accommodations, a guided tour of the property, and a concert or other fun event. If you have a number of clients in your local market area, they will host a dinner in a nearby fine restaurant. You can invite clients who may have an interest in a second home or in relocating when they retire. Their current conversion rate is 40 percent.

If you serve the luxury market, the Ginn Co. is niched specifically in the boutique or luxury market. The Ginn properties are located in Florida, North Carolina, South Carolina and St. Thomas. Plans are on the books for future resorts in Eagle-Vail, Colo., Grand Bahama Island, and Burke, Vt. Ginn provides lots for custom building and a wide variety of custom homes. The referral fee for the Ginn properties is 2.5 percent. Agents must register their clients prior to showing them the property. Ginn also invites agents to tour their properties prior to referring clients to them. Clients are invited to a Ginn event where Ginn picks up most of the transportation, hotel and entertainment costs. Like Land Resource, Ginn clients are asked to post a $1,000 refundable deposit. The broker referral is protected for 365 days.

If you have people in your sphere of influence or past clients ages 45 to 60, it’s easy to ask them about whether they are considering purchasing a second home or a different home when they retire. Thinking outside your local area can be an easy way to earn a sizeable commission for doing little more than filling out a Web site form or making a phone call. That’s about as easy as real estate can be.

Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of “Waging War on Real Estate’s Discounters” and “Who’s the Best Person to Sell My House?” Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.

Oct. 24, 2007
(Crain’s) — The Chicago area saw 27% fewer existing homes sold in September compared with the same month last year.
A total of 6,794 homes were sold last month in the nine-county Chicagoland Primary Metropolitan Statistical Area, compared with 9,307 in September 2006, the Illinois Assn. of Realtors reported Wednesday.

The year-over-year decrease statewide was nearly 23%. A total of 10,476 Illinois homes were sold in September, the association said.

For the first nine months of the year, Illinois sales dropped 15.4% from the same period last year.
Illinois and Chicago-area September declines were higher than the national figure of 19.1%. A total of 5.04 million existing homes were sold last month nationwide, according to a National Assn. of Realtors report also released Wednesday.

Home prices fared better than sales numbers. The Illinois Assn. of Realtors reported the statewide median price last month was $200,000, up 0.8% from September last year. That means half the homes sold last month were below $200,000 and half were above.

The Midwest and the Northeast were the only two regions in the nation that reported a rise in September median housing prices. The Midwest median price was $170,700, up 1.4% from a year ago, according to the National Assn. of Realtors.

Nationwide, the median housing price fell 4.2% to $211,700 in September.

A Cooler Market, but Warmer by the Lake.

by Diane Ethridge Cannon

Anyone turning on the news or opening the newspaper will be confronted with stories about record foreclosures, falling home prices, excess housing inventory and lenders exiting the mortgage market. All of these factors are at play in Chicago and Cook County as well as the rest of the country. With nearly a quarter of all mortgages made in 2006 being sub-prime, that is to say mortgages made at relatively high rates to those with low credit scores, minimal assets and unverified or insecure employment, it is no wonder that foreclosures are over 50 percent higher in 2007 than 2006 and that Attorney General Lisa Madigan projects that about 20% of these subprime borrowers will end up in default.

The consequences of the credit problems on this end of the spectrum have spilled over to the other end, with reports of major lenders announcing that they will sit on the sidelines and simply not make loans, including loans to high net worth individuals.

But, as in every other housing downturn, the housing market in Chicago is less affected than in most other regions and metropolitan markets. The area didn’t heat up as much as other areas and it won’t have to cool down as much in the current environment.

The following graphs provide a snapshot of the current situation and make comparisons over the past fifteen years.

The columns in Figure 1 show the current inventory of attached single family homes (condos for the most part) listed in MLS in the 25 community areas predominantly served by Rubloff, grouped within $100,000 ranges. Over 3,600 units priced in the $200,000s, and over 3,000 priced in the $300,000s are listed today. As we would expect, the columns make up a skewed curve, with the number of properties listed declining for each price range higher than the $200,000s, dropping to only 119 listed in the $900,000s. But the really startling fact shown in the graph is the last column on the right: nearly 700 units priced above $1,000,000 are being marketed. And as the solid blue line shows, the median number of days on the market is significantly higher for these properties than for more affordable units.

As to what actually sells, as Figure 2 illustrates, the median sale price has risen steadily over the past 15 years, but even so, half of all attached sales in the first half of 2007 ranged between $232,000 and $420,000, and a quarter of all sales were below that range. Also, when you see increases or decreases in median sale price you need to remember that this does not reflect increases in individual house prices when the inventory is changing, and that is certainly the case in Chicago. Nearly 50% of all houses sold in the first half of 2007 were built after 1978, and these newer homes had a median sale price of $375,000, while the older homes had a median sale price of $260,000.

Across the country and in the region as a whole there are reports of falling home values, but in the core Rubloff areas along the lakefront median sale price at the midpoint of the year is modestly up (to $314,000) after having been flat at $302,000 for two solid years (see Figure 3); properties are selling at very close to their asking price, with less than 3% discount being typical. On the other hand, the volume of sales has declined to levels of at least three years ago, on both north and south parts of the study area. (Figure 4).

The graph that best illustrates the potential for problems going forward is Figure 5. Here we see that on both the north and the south, we are getting into uncharted territory for time on the market. Even in the post-gulf war days of 1992 median time on the market was around two months. Today, on the north side of town median time on the market is over 3 months and the MLS data do not for the most part reflect the huge increases in new inventory developed or being developed. This is a particularly acute problem on the south side. The combination of these factors send a strong signal that those who need to sell their property will need to consider lowering the price.

Forbes.com has generated a list of the most expensive blocks in 10 affluent cities across the country. They are:

1. Boston, Louisburg Square: A private square in the middle of Beacon Hill, Boston’s most exclusive neighborhood. The block has long been home to the most expensive homes in the city.

2. Chicago, between Willow, Howe, Burling, and Orchard: A once middle-class area that, due to zoning changes, has seen the rise of mega-mansions.

3. New York City, between Madison Avenue, Fifth Avenue, 70th St., and 69th Street: This Upper East Side zip code is the most expensive in Manhattan, so it makes sense it should contain the city’s most expensive block.

To access the full article, go here: http://www.realtor.org/rmodaily.nsf/f3c66d0c6457c1e1862570af000cb13b/0d2d997098d411cc8625734d0053f02a?OpenDocument

Happy Anniversary

Congratulations to the Evanston office, which celebrated its one-year anniversary on October 6!

The past year has been successful for our latest Rubloff office and our competitors are definitely aware of our presence. Having opened its doors with 15 agents, the office has almost filled its desks, growing nearly 100 percent to 28 highly-trained and experienced professionals, many from our five local competitors.

Branch Manager Mary Ellen Tainer said “It has been an exciting year; I am so proud of our agents and am looking forward to greater success 2008.”

With news of a slower market circulating, we gathered advice from a few of our most tenured top performers on how to handle the changing times. “The most important thing to remember is that this too shall pass,” said 27-year veteran Eudice Fogel. “Keep being aggressive, stay ahead of the marketplace and remember that communication is more important than ever.”

Carol Ann Edwards-Nasser concurred, “Review pricing with your sellers on a weekly basis; its easier to address price adjustments when you consistently stay on top of pricing and communicate back to your sellers.”

“It is a tough market,” agreed Judy Howard. “But if people need to sell and their houses are priced right – the houses will sell.”

Getting back to basics helps. “Keep going to broker open houses, further familiarize yourself with neighborhoods and continue aggressive self marketing,” said Suzan Bramson. “Be sure to work hard on behalf of both your sellers and your buyers; that is how you win referrals.”

Walter Stunard suggested to market as much as possible. “Work to collect as many listings as you can and if you hold onto them and serve them well, as the market shifts, they will sell,” he said. “You must keep your clients realistic and push for a six-month listing.”

Simply keeping a positive attitude can help promote success. “I try to keep my mind on being successful,” said Joanne Shapiro. “Even when the market is in doubt, I know that with time things will change.” Perseverance could be the key to growth.

Each agent stressed that keeping ahead of the market and anticipating pricing shifts is key. Communicate to your sellers what may be happening down the road – although they may not want to hear it, if you back up your advice with facts, their houses will sell.

Agents & Employees,

Welcome to the second issue of The Rubloff Review, the quarterly newsletter from Rubloff Residential Properties.

Despite continued market softness, Rubloff continued to do better than the market, with our sales volume down only slightly from last year’s record performance. Luckily, Chicago continues to maintain its ranking as a stronger market than most other areas in the country. In general, the Midwest markets have been less volatile than most of the nation, especially the west coast and Florida. At our recent all-company meeting, Diane Swonk, Senior Managing Director & Chief Economist for Mesirow Financial, predicted a likely turn-around by the summer of 2008, but did warn of some painful economic times between now and next summer.

Swonk also indicated that, even though we are experiencing a market correction, there is no reason to panic; this is a normal business cycle and it will be good for the long-term health of the real estate community (of course, it may be difficult to convince our clients!)

Remember that a soft market increases the need for good real estate agents. It is now more important than ever for buyers and sellers to work with a professional. Although these times may be stressful, most experienced agents continue to do well in a slow market. Many Rubloff agents have actually seen an increase in their business over 2006!

In response to these market pressures, Rubloff is constantly improving our office and marketing support in order to make our agents more successful. Our web site continues to be a top priority and we are striving to stay ahead of the competition in marketing technology.

Rubloff is increasing its share of the market for development projects. Over the summer we saw an increase in interest from developers in having Rubloff represent them for both existing and new projects. The combination of a strong, experienced sales agent base and complete marketing support is an attractive combination for developers and we will continue to build these relationships.

Hopefully, you all had fun at the summer beach party and we look forward to another great holiday party in December. We hope that the remaining weeks of the year are prosperous for us all.

Regards,

Howard and Tom

For more information, contact:
Lee Winklepleck
Ruder Finn for Rubloff Residential Properties
312/329-3987

Rubloff Residential Properties Ranked Top 10
In the Nation for Customer Service
Rubloff Receives Two 2007 Quality Excellence Awards for Top 10 Companies and Top 10 Offices

CHICAGO (July 10, 2007) – Rubloff Residential Properties, Chicago’s premier residential real estate firm, today announced that Quality Service Certification, Inc. (QSC) and Leading Research Corporation have awarded Rubloff with two 2007 Quality Excellence (QE™) Awards. The awards recognize Rubloff as one of the nation’s top 10 real estate companies as well as one of the nation’s top 10 real estate offices for its Gold Coast location.

The QE Award for 2007 is based upon the detailed service quality results and satisfaction feedback of 200,000 customers from January through December 2006. Provided to top real estate companies and offices in North America, the QE™ Awards honor those organizations that deliver the best service quality and customer satisfaction according to consumers. Rubloff’s Gold Coast office, located at One Magnificent Mile, was the only office in Illinois ranked in the top 10.

“Since its founding in 1930, Rubloff has been dedicated to providing customers with unparalleled customer service, and being recognized as a QE company is a tribute to our hard work and outstanding dedication,” said James Kinney, president of Rubloff. “Our goal is to achieve excellence on behalf of our customers and to continue to improve and strengthen our client relationships.”

Rubloff agents average more than 14 years experience and consistently outperform all other Chicago-area real estate agents. More than 90 percent of Rubloff’s business comes from return visits and referrals, showcasing Rubloff’s unwavering commitment to customer service.

QSC provides specialized training on superior service delivery and requires Quality Service Certified agents to offer consumers a guarantee of service. Leading Research Corporation independently surveys every client of a QSC agent following the closing of each real estate transaction.

About Rubloff
Since its founding in 1930, Rubloff Residential Properties has been part of the fabric of Chicago and its outlying areas, offering some of the finest properties in the best locations. Rubloff’s seven sales offices are conveniently located across Chicago, the city’s North Shore and Michigan’s Harbor Country (New Buffalo).

Rubloff has been listed as the top-producing office in the Multiple Listing Service of Northern Illinois for the last seven years. In 2006, Rubloff agents averaged $6.6 million in sales, more than double that of their competitors.

For more information, please call 312-368-5300 or visit the award-winning Rubloff Residential Properties web site at: www.rubloff.com.

For more information, contact:
Lee Winklepleck
Ruder Finn for Rubloff Residential Properties
312/329-3978

On the Farm: Chicagoans Moving Towards Rustic Lifestyle
New Trend Reveals Harbor Country Homebuyers Choosing Homes Away from Lakefront

CHICAGO (August 7, 2007) – Harbor Country, Michigan – hailed by members of the media as “the Hamptons of the Midwest” – is only a 90-minute drive from Chicago and has long served as a favorite summertime destination for Chicagoans. But while Harbor Country is most often revered for its pristine beaches, quaint cottages on the dunes and lakefront homes, it’s now becoming extremely popular for its farms, vineyards and multi-acre country estates.

Rubloff Residential Properties, the premier residential real estate firm in Chicago and Harbor Country, is seeing a shift towards homeowners purchasing inland real estate in order to enjoy a more rustic escape.

“Many of Harbor Country’s residents are Chicago transplants who are seeking a sanctuary away from the hustle and bustle and the often crowded confines of city life,” said Doug Horwich, vice president of Rubloff. “Finding that open land is a precious commodity that provides privacy and space that a townhouse on the beach or in the city cannot offer.”

Those who choose to live inland are able to purchase homes with more square footage and larger lots than controlled beachside quarters. In addition, inland living sometimes offers homeowners a more affordable alternative when residing in a resort community such as New Buffalo.

World-renowned architects are taking notice: Stanley Tigerman and Margaret McCurry have each designed one-of-a-kind homes for River Bluff, a new, 16-home development in New Buffalo, Michigan, that is situated on a quiet country road just minutes from various residential and recreational amenities including antique shops, galleries, restaurants in unique bed and breakfasts wineries and the pristine Lake Michigan shoreline. Tigerman and McCurry’s designs celebrate rural heritage and emulate pastoral and farm houses, while offering homeowners the modern amenities for which they are looking, including state-of-the-art kitchens and bathrooms.

Chicagoans are falling so deeply in love with Harbor Country that they’re even swapping their primary residences in Chicago for homes in New Buffalo.

“Many baby boomers are upgrading their houses in New Buffalo and downsizing in Chicago so that their Chicago residences is becoming their second home and Harbor Country is their year-round residence,” explains Karen Strohl, a seasoned sales associate in Rubloff’s Harbor Country office. “Harbor Country offers the best of both worlds – the ability to enjoy country living while just minutes from the wonderful amenities and city life in downtown New Buffalo.”

Chicagoans are familiar with Rubloff as a leader in premier residential properties in Chicago and the North Shore – but Rubloff has also been a leader in the Harbor Country area of Southwest Michigan since it opened an office in New Buffalo in 2000. Many of the buyers of vacation homes in this area naturally come from nearby Chicago. This plays well into the synergy established between Rubloff’s Chicago and New Buffalo offices. New Buffalo sales agents can easily tap into the valuable networks of their Chicago based colleagues and clients.

About Rubloff
Since its founding in 1930, Rubloff Residential Properties has been part of the fabric of Chicago and its outlying areas, offering some of the finest properties in the best locations. Rubloff’s seven sales offices are conveniently located across Chicago, the city’s North Shore and Michigan’s Harbor Country (New Buffalo).

For more information, please call (269) 469-8300 or visit the award-winning Rubloff Harbor Country web site at: www.rubloffharborcountry.com.

Note to editors: Spokesperson interviews available upon request

Economic outlook brightens
Better job, stock news sends leading index higher in Sept.
Friday, October 19, 2007

Inman News

A key barometer of future economic conditions picked up steam in September, The Conference Board reported this week.

The U.S. leading index increased 0.3 percent last month to 137.9, with seven of 10 indicators advancing. Although building permits and interest-rate spread continued to drag the index, improving vendor performance, fewer jobless claims and rising stock prices all pushed the index higher in September. As a result, the leading index is now at the same level as in March 2007.

The Conference Board reported that the leading index has been essentially flat throughout 2007, and the six-month diffusion index suggests that the strengths among the leading indicators continue to be only slightly more widespread than weaknesses in recent months. At the same time, real GDP, which measures the total value of goods and services produced by the United States in a given period, grew at a 2.2 percent average annual rate in the first half of the year, only slightly up from the 1.6 percent average rate in the second half of 2006. The current behavior of the composite indexes suggests that slow economic growth is likely to continue in the near term.

The coincident index, The Conference Board’s gauge of the current state of the economy, increased again in September, growing 1 percent from March (a 1.9 percent annual rate). This, however, is below its long-term average growth rate (about a 2.6 percent annual rate measured over 1959-2007), and down from the 2.5 percent average annual rate in 2006.

http://www.inman.com/printer.aspx?ID=64964