A year ago, Inman News provided a list of real estate predictions for 2004. Here’s how we did: (Click here to see Inman News’ 2005 Real Estate Forecast.)
Prediction 1. Interest rates on the 30-year fixed-rate mortgage will jump to near 7 percent, cooling the pace of housing sales.
Interest rates stayed in the 5 percent range this year, increasing in the spring, but not enough to significantly cool home sales. 2004 will end up recording more single-family home sales than 2003.
Prediction 2. The Justice Department will close its investigation of the National Association of Realtors’ virtual office Web site policy without taking any action against the organization or MLSs that implement the policy.
The DOJ investigation is still ongoing, and the NAR has extended the date for MLSs to comply with the policy until July 1, 2005.
Prediction 3. HomeServices of America will go on a brokerage company buying binge. At least one major realty brokerage will be bought by a major bank holding company.
As expected, HomeServices continued to buy brokerage companies in 2004. But no major bank holding companies have purchased a major realty brokerage.
Prediction 4. Former Homestore executives Stuart Wolff and Peter Tafeen will remain unscathed by the Justice Department and Securities and Exchange Commission investigations into wrongdoing at the company.
So far, we’re right on this one.
Prediction 5. A major white-collar crime incident will unfold in the real estate world.
Several real estate fraud incidences involving millions of dollars were uncovered or prosecuted this year, and the FBI announced that it has put real estate fraud high on its priority list. In one case, the Texas Attorney General recently asked for a restraining order on a company that allegedly defrauded more than 150 homeowners by keeping their mortgage payments.
Prediction 6. Real estate lead companies will prosper as home buyers and sellers move even more aggressively onto the Internet. But the major lead-generating and lead-selling companies will consolidate among themselves or be bought by InterActiveCorp, which already owns LendingTree.
Real estate lead companies did prosper in 2004, as evidenced by HouseValues’ recent successful IPO. The online company generates home buyer and seller leads for real estate agents and brokerages. HouseValues has a market capitalization of about $375 million, and the company reported revenues of $33.3 million for the nine months ended Sept. 30, 2004.
InterActiveCorp bought ServiceMagic in July, and LendingTree purchased iNest, an online home builder referral network, in November. But we haven’t heard about any other major lead generation company consolidation.
Prediction 7. Cendant Corp. and RE/MAX International will get into the online lead-generation business.
Cendant entered the online lead generation business in November with the purchase of LeadRouter, a technology for generating leads. RE/MAX hasn’t yet made a move and hasn’t leaked any plans to do so.
Prediction 8. LendingTree will purchase a real estate brokerage company, sign deals with brokerages to use their data or obtain its own realty licenses to join MLSs for access to data.
LendingTree bought a consumer-direct mortgage lender, HomeLoanCenter.com, but hasn’t purchased a brokerage.
Prediction 9. Membership in the National Association of Realtors will pass the 1 million mark and those Realtors will donate record sums to political action committees and charitable causes.
Dead on. NAR now has 1 million members, and the trade group’s political action committee donated $3.8 million to federal candidates during the 2003-2004 period.
Prediction 10. The American Bankers Association will break ground on a new building in Washington, D.C., to rival NAR’s new capital city digs.
So far, we were wrong on this prediction.
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