Industry expert predicts exodus of agents next year, business consolidation
A nationally recognized expert on the real estate industry told the Real Estate Services Providers Council Inc. (RESPRO) audience Wednesday that there will be a "sharp contraction in the real estate market next year and into 2006, when mortgage rates rise above 7 percent."
Weston Edwards, PhD., a consultant to some of the largest real estate brokerage firms, title companies and mortgage lenders in the nation, pointed out that the "contraction in home sales" will occur as interest rates rise and current "homeowners won't want to give up their low-rate, non-assumable mortgages."
"Major realty firms and homebuilders will use this period to dramatically improve market share, taking advantage of failed competitors and making acquisitions," Edwards said. "Realty firms will push for improved mortgage lending services, title and homeowners insurance to offset their realty brokerage losses. And, many marginal agents will leave the business, which may result in a slowing of the current commission erosion."
Presenting at the opening general session of RESPRO's Annual Fall Seminar, Edwards discussed his yearlong, landmark study on the consolidation of the real estate industry in which 220 of the nation's top real estate brokerage firms, 51 of the nation's top 150 builders and 3,000 recent home buyers were interviewed on the concept of "one-stop real estate shopping."