A year ago, Inman News provided a list of real estate predictions for 2005. Here’s how we did:
Prediction 1: Homestore will start a lead generation program and quickly become one of the leaders in the space.
Homestore launched an online lead-generation product for Realtors called Top Marketer, offering consumers free home sales comparison reports in exchange for their contact information. Realtors who sign up receive a call on their cell phones when consumers sign up online.
Prediction 2: A major mortgage company will purchase a big real estate company, setting off a legal battle with the real estate industry.
We haven’t heard of any major mortgage lenders buying a big real estate brokerage, but many lenders this year continued to create affiliated partnerships with real estate companies, aiming to offer consumers a one-stop shop for real estate and mortgage services.
Prediction 3: A movement to privatize the MLS will take off like wildfire as brokers move to control their listing inventory.
There hasn’t been a widespread movement to privatize the MLS.
Prediction 4: The Justice Department will come down hard on the real estate industry for antitrust.
The DOJ launched a multilevel attack on alleged antitrust practices in the industry this year, including a lawsuit against the National Association of Realtors over its online property listings policy, a lawsuit against the Kentucky Real Estate Commission over its anti-rebate rules (which have since been lifted), and several letters of opposition to states considering implementing minimum-service laws for real estate.
Prediction 5: There will be a huge security breach at a large regional MLS, causing the National Association of Realtors to step in and create a tight data security policy that all MLSs must follow and police closely.
No huge security breaches reported this year, but more MLSs and Realtor associations started getting serious about data security and some have implemented token systems to curb password abuses.
Prediction 6: Google will beta test a special real estate search engine that crawls the Web for available home listings. The search feature will be local in nature, but will enable Web surfers to set their own search parameters and look in multiple ZIP codes.
Google hasn’t launched a “real estate search engine,” but it did launch a new service in test mode called Google Base that enables people to quickly and easily create a free post that will appear online and can be located by searching on specific terms, such as “real estate for sale.”
Prediction 7: NAR will end the year with fewer members than it had on Jan. 1. As the housing market eases and other sectors of the economy pick up pace, thousands of real estate newbies will exit the industry to try on other hats.
NAR’s membership swelled to an unprecedented 1.2 million members at year-end. However, the housing market did start to show signs of major cooling in some markets in the second half of the year.
Prediction 8: Interest rates will fall as President Bush takes action on the trade deficit.
Interest rates increased this year, though they still hover at historic lows. The U.S. trade deficit has increased more in the first nine months this year than it did in 2004, reaching a record $66 billion in September.
Prediction 9: Bush will ease the pain of his tax-reform proposals, which will eliminate the deduction for property taxes, by increasing the capital gains caps on housing sales.
Just the opposite has happened this year. The federal tax reform panel has made recommendations that would drastically reduce the mortgage-interest deduction, causing major protest among real estate industry groups including the National Association of Realtors and the National Association of Home Builders.
Prediction 10: Fannie Mae and Freddie Mac will go private and eliminate the ceiling on home loans that they will purchase.
The two government-sponsored mortgage giants did not go private this year, although proposals to reform the companies are still on the table. They didn’t eliminate the ceiling on home loans this year, but upped the amount to $417,000 for 2006.
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