1995

Henry Silverman, CEO of Hospitality Franchise Services, acquires Century 21 (C21) from Metropolitan Life Insurance. This overlooked acquisition (at that time) would turn out to be the start of what many consider the “Most Significant Real Estate Acquisition of the Century”. Longstanding industry tradition is shattered when outsider Bob Pitman, MTV whiz kid, unexpectedly becomes the new CEO of C21, draws major attention when he officially introduces the Internet into mainstream real estate in November at the NAR Convention in Atlanta by announcing, “Click a Mouse and Buy a House.” Unbeknownst to most agents 1995 is likely the genesis of the huge amount of change to come.

1996

As national franchisees enjoy a-merry-go-round ride, the largely ignored acquisition of C21 by HFS the previous year is followed by the acquisition of ERA, Coldwell Banker and PHH. A name change to Cendant and a move of corporate offices to unknown Parsippany, New Jersey soon follows. (In 2006 Cendant renames its real estate brokerage division Realogy.) An unsettling fear begins to set in and leaders begin to realize that the rules are changing. Meanwhile, another real estate baby, was founded in Ontario, Canada by Steve Morris. Previously a large RE/MAX franchise, Morris decides to create a new residual program to provide retirement benefits to agents, and christens the company EXIT Realty. In the short span of 4 years, the company enters the US market, and by 2005 hits the top 10 list of the largest real estate franchises in Northern America. Like RE/MAX, it appears that EXIT is ordained to re-define the real estate broker/agent relationship for many years to come. Few notice when the Real Estate Buyers Agent Council founded in 1988 becomes a NAR affiliate. In the following 10 years buyer agency explodes and drives REBAC with 50,000 members to become the largest council in the NAR family.

1997

NRT, Inc., the Cendant-owned brokerage-holding company, proves that size does matter when, with a steady diet of acquisitions, it begins to dominate the national rankings, making it the world’s largest real estate brokerage company. This position continues today, with more than 1,000 company-owned offices. In 2005, NRT posts a real estate industry record with $230 billion in closed sales volume. Microsoft starts what in the end is to be a very brief stint in the real estate industry with the launch of HomeAdvisor.com. What was to become the landmark book in real estate is published, when Real Estate Confronts Reality identifies the key changes that will impact the industry. Reflection on the predictions made in this book would later prove to be very accurate. (PS: I am somewhat biased as I was co-author of the book).

1998

It appears that it was a year in which common sense, profits and good management were out of style. The real estate industry surpassed every other industry, including retail, technology, legal and pharmaceutical markets by registering the most URLs. Predictions that new Internet companies are going to topple traditional real estate companies flourish. Popular forerunners include IRED, HomeSeekers, HomeWeb, HomeAdvisor and Homes.com. It is, however, the once still-born NAR baby RIN that is revived into Realtor.com, and HomeStore ends up grabbing the spotlight while unlikely LendingTree.com becomes one of the most successful dot.com startups to emerge from the real estate industry. Meredith Corp. sells its BH&G franchise to GMAC Home Services, Inc., a subsidiary of GMAC Financial Services.

1999

Following the real estate “dot.com” madness of the previous year, creating new brands in real estate reach new heights. Ideas are ridiculously expensive, frequently creative, and almost always amusing. ZipRealty introduces a new era of real estate company names while a home-based, lead generation start-up, HouseValues.com, quietly opens its doors and in December 2004 turns heads when it raises almost $100 million in a successful IPO. Watch this company become one of the industry’s largest influencers in the industry. Back in traditional real estate, college hockey star Ronald Peltier consolidates nine prosperous real estate companies and propels the new corporate parent, HomeServices.com, to the No. 2 spot in sales in the US. Widely perceived as a discount brokerage, 70’s Help-U-Sell is revived to allow customers to choose what they would like to pay for real estate services through unbundling. This company has a strong boost when industry insider and leader Steve Ozonian becomes a shareholder and CEO in 2005. Congress finally completes the long-anticipated revocation of the Glass-Stegall Act, creating a furious debate on whether financial institutions may enter the industry as owners and operators of real estate firms.

2000

The year starts with a major announcement that RE/MAX Associates the previous year were involved in more than 1 million sales transaction sides within a single year in the United States. Size and economies of scale become key factors in residential real estate and the race is officially on. During January, HomeStore.com becomes the newly born real estate dot.com darling and peaks at $138 per share. Two years later, after the resignation of founder and CEO Stuart Wolff in the wake of an accounting investigation (which results in a substantial restatement of revenues) the company’s share price hobbles at a decimated 32 cents. Today the share price is between $6 - $7 and the case against Wolff continues. What starts as “an investigation into potentially anti-competitive conduct involving the online realty listings industry” by HomeStore, the U.S. Department of Justice (DOJ) gradually widens the investigation into numerous facets of organized real estate brokerage. The DOJ formally files suit in 2005 against the National Association of Realtors”?. It is evident that the industry is undergoing a lot of fundamental change.

2001

Early in the year, realty dot.coms burn due to irresponsibly funded, single revenue, difficult-to-implement one-page business plans. Seizing the opportunity with an almost military precision, Fidelity National Financial (FNF) beats other major title companies to the MLS arena with various key acquisitions. During the following few years however powerhouse First American Title and Stewart Title both follow with numerous important MLS and transaction related acquisitions. The various components of the real estate transaction is truly starting to officially integrate.

2002

A well-promoted real estate book, “The Millionaire Real Estate Agent: It’s Not About the Money,” by Gary Keller, Dave Jenks and Jay Papasan is published. Consumer adoption of the Internet explodes and numerous studies show that searching for a home is going online. By 2005 this fundamental shift will significantly change the way in which the entire real estate marketplace operates.

2003

Another big name enters the real estate industry, when influential media mogul Barry Diller purchases LendingTree. In the following years his company, InterActiveCorp, also acquires other real estate assets such as RealEstate.com, ServiceMagic, iNest and Domania. Keep close track of RealEstate.com as they innovate new ways to expand into real estate brokerage industry. London-based Foxtons buys New Jersey-based Your Homes Direct (YHD) and although the acquisition is relatively small, it is the first UK-based real estate company to officially expand into North America. They now operate 27 branches, saddling the Atlantic with both arms operating under a 2% commission.

2004

NAR achieves an unprecedented milestone in Association history by exceeding one million members for the first time, while RealtyU”? becomes the nation’s largest educator by surpassing 250,000 real estate agents trained in one year. During the strong housing market membership number will continue to surge but will most likely level off and decline as the housing market cools down. The first national non-profit charitable organization focused exclusively on helping new licensees in the real estate industry to succeed is formed. Within two years The Real Estate Apprentice Foundation announces the ability to award 5,000 grants totaling $1 million per year. ZipRealty draws attention when, in what was touted as the first initiative of its kind, the company reserved up to five percent of the it’s common stock for purchase at the launch price for anyone who bought or sold a home with ZipRealty prior to September 30, 2004. The IPO raises $68 million. The amount of new business models in real estate is at an all time high.

2005

Celebrating five generations, Illinois powerhouse Baird & Warner (founded in 1855), celebrates 150 years of continuous real estate business as the oldest real estate company in the country. Longstanding RELO network, the organization that encompasses 650 of the foremost local and regional brands in residential real estate, collectively sells 1.4 million homes annually valued at $380 billion, and announces a name change to Leading Real Estate Companies of the World. Watch this group as they expand and solidify their position as the most significant alternative to real estate franchising models. Homestore’s EBITDA for the full year was up for 2005 to $5.4 million, compared to $2.6 million for the full year 2004 despite having to pay legal expenses related to reimbursement of defense costs of former officers. The year ends with a high level of buzz as companies such as Google, Yahoo, eBay, Craigslist, Interactive Corp., WalMart and Zillow explore possible participation in the real estate and mortgage brokerage business.

2006 and Ahead

Exciting times!!

During the next couple of months we on RealBlogging be delving into numerous individual trends that will not only impact hundreds of thousands of brokers and agents but also millions of support service providers (loan officers, title reps, appraisers, home inspectors, etc.) as well as tens of millions of home buyers and sellers. For those brokers and agents that are really serious about a career in the real estate industry I recommend you read my 114-page Swanepoel TRENDS Report just published last month by RIS Media. It will open you mind to both the benefits, negatives, challenges and opportunities change will bring.

Let’s blog.