In 1973, in the heart of the last worst recession, Dave and Gail Liniger started a small real estate company. They were frustrated with the way that agents did business and had this idea to start a different sort of real estate company, one that was "agent-centric."
Today, RE/MAX is one of the big four, including Realogy-owned Century 21, Coldwell Banker and ERA. About 1,000 of their top brokerage firm owners came to Chicago for a few days for their annual meeting. Liniger told them life is going to look a lot better, very soon.
But he admitted in a press conference yesterday afternoon, that his company has seen "shrinkage," even as the number of Realtors has fallen by hundreds of thousands. "Let's face it," he said. "There were a lot of lousy agents in the business." Those that are left, he said, have seen their earnings fall by "35 to 40 percent."
Liniger said 2008 was the "roughest year" for his agents. He expects 2009 to be slightly better and doesn't expect a double-dip recession. It will be slow going for the next few years as inventory is absorbed, but ultimately, everything will be fine.
It's the first time I've heard a Realtor sounding, well, optimistic in quite a while.
Liniger, a beefy guy with a wide smile, had plenty of other things to say to a small group of journalists who gathered at the Hyatt Regency, in Chicago. Among the highlights:
- On the fight over health care in Washington, D.C.: "Everyone is so focused on health care at the moment. It's crowding everything else out." A spokesperson tole me RE/MAX just started offering a health insurance plan to the 28 percent of its agents who don't have health insurance. Liniger told me the National Association of Realtors recognizes that a significant percentage of its members don't have health care of any sort and they will be offering a similar health plan soon.
- On the $8,000 first time home buyer tax credit: "From the folks we've talked to, it looks like there is support for an extension of the $8,000 tax credit, but not an expansion," he said, adding, "Personally, I'm in favor of a $15,000 tax credit for all home buyers." Liniger said that he believes Congress will act after the August recess, but if they wait too long, "there will be a mad rush of home buyers in October" and November 30th, will be hell for anyone connected with real estate.
- On Option ARMs and Alt A Mortgages: "The peak of failure for these loans will be September, 2010. It's going to make foreclosures worse." Liniger doesn't see foreclosures getting better any time soon, and his economists see unemployment rising into double-digit territory. "Last month, unemployment ticked down an notch, but it was a fake thing. It will go up again," he added.
- On the next great housing cycle: "It's going to start in two years, and will be good for 10 years," Liniger said. "It's going to be based on household creation and immigration." The Echo Boom has 74 million people in it, and that will fuel a long-term boom.