Wow! What a summer – blew by fast. And now…
Back to school. Back to rush hour. Back to normal.

Same can’t be said for the financial markets – the roller coaster ride continues.

In July, the Investment Bankers of the world recognized that the sub-prime mortgage paper they’d been filling investment portfolios with for years was iffy. And suddenly there was international turmoil – “Liquidity Crisis” became the official term.

More simply, Investment Bankers, nervous about how they leveraged, overleveraged and hedge funded the heck out of the mass mortgage pool amalgamations took notice. They’d “bet on” inflation and economic stability. They discovered their “bets” weren’t doing as well as expected.

The ensuing loss of values was blamed on a deteriorating US Real Estate Market. True enough the market had gone soft in may geographic areas – but the news spread and like most stories of ill – say it loud enough and long enough and actions will follow stories. True, the US real estate market is not right now a picture of prime health. But it’s a big market, and not all areas have experienced a drastic downturn.

The underlying base was an increase or doubling of the number of properties in foreclosure. Given some of the creative mortgages – notably ARMs or Adjustable Rate Mortgages with artificially low interest rates, that ballooned the missing interest onto the principal balance of the mortgage its not a surprise to see ‘affordability hits’ showing an increase across the market. Combine this with ‘rating agencies’ that now face calls of miss-rating, not understanding the risk etc – Investors lost confidence in almost all manner of mortgage money investing.

The attitude toward over-leveraging because of mortgage tax deductibility has often made the US real estate market more susceptible. Keep in mind, tempting financing, foreclosures and ‘walk-aways’ have always been higher, and an accepted component of the US marketplace.

In contrast, the Canadian economy and the real estate market in Canada both continue to steam along, seeming somewhat oblivious to the challenges and market changes in the US. Both sales volumes and prices across Canadian Real Estate Association (CREA) reporting areas are statistically powerful. In fact, both CREA and CMHC have recently revised their ’07 forecasts upward – to account for sales increases.

Real estate continues to be a solid, proven long-term investment. When the fear in the US marketplace subsides, buyers will again recognize opportunity and value.

A more rested review of Inman RE Connect San-Fran July 31 - Aug 2

Just back from Real Estate Connect in San Francisco. Billed as a “networking think-tank” it was a gathering of Brokerage CEO’s, Brokers, Salespeople, Web Guru’s, Web Millionaires and Venture Capitalists. It’s become a big show - three years ago it was a get-together of 300 hundred individuals. This year, it welcomed a crowd of 1900.

If we weren’t already convinced that we live in a world of real-time, compressed time, it was certainly clear here. No longer should we see the world as a place of next year’s trends…today, reality is – “present trends” are now. Our world moves at web speed. What used to take months and even years to implement grows now in hours, days and weeks. A business that doesn’t, or can’t keep pace is out of business just as fast.

The new “Phenoms” that are shaking the world of Real Estate Sales: Conglomerators. Essentially these are websites offering listings of every kind, providing sales comps, price trends, real estate Broker listed properties, private sale properties – even properties that are not for sale, but where an owner can put their home out with a “make-me-sell” price.

These “private conglomerators” are already working with millions of dollars in Venture Capital and are already offering a complete array of very sharp resources for both buyers and sellers. All wanting to be viewed as Broker Friendly –it was an interesting Conference as NAR and Zillow sat on the same stage trying to publicly figure, “so where is this meeting of needs”.

For Zillow, Trulia, Home Values.com etc. the model is easy – have the most listings, give the consumer the best and fastest access to value estimates, sales charts and statistics. They do recognize that buyers eventually get confused and want to work with a Professional Realtor to get through the home-buying maze. So, a strong part of their revenue model is to sell “qualified” leads to willing “subscriber” real estate agents.

Change is occurring.

Used to be you placed an ad, hoped for a call, developed a relationship and so the story went. As newspaper ads become less relevant, these new websites are beginning to control and decide who they’ll sell leads to, and how many leads, and on what basis. It becomes a game of luck. No relationship, no affinity, it becomes random chance as a computer chooses which Realtors get the leads to succeed. Blind luck.

What’s it all mean to Realtors? As Dr. Richard Flint said at NAR ’06, “either turn your real estate sales into a Referral Based Business by 2008, or perish.” Did he see what’s going on with the web, or did he foresee the “present trend” of the business in general?