Property slump makes realtors shift strategies

Mayfield, a St. Louis real estate agent, writes how-to books with titles such as "Five Minutes to a Great Real Estate Meeting" which were selling briskly at this week's National Association of Realtors trade show in Las Vegas.

Their sales underscored how many real estate agents are looking for fresh ideas given a lengthy downturn in home sales following a boom -- some say binge -- in home-building, sales and financing.

"Today agents are spending more time rethinking their business plans, their marketing plans," Mayfield said. "You just have to keep charging through."

Las Vegas realtor Devin Reiss said agents in his market no longer expect business to fall into their laps as it did during the recent boom.

"At that point it was absolutely crazy," Reiss said, noting it was not unusual to receive up to 15 telephone calls on properties the same day he listed them for sale. "Properties were just flying off the shelf."

Amid that gangbusters business, the ranks of the National Association of Realtors swelled to a current nearly 1.4 million from about 766,000 in 2000. Thus, many real estate agents are experiencing their first market downturn.

Declining demand and falling home prices have dashed previous irrational expectations in many markets. The challenge now for real estate agents is to guide buyers and sellers to come to terms with that, said realtor John Mike of West Palm Beach, Florida.

"Those 30, 35 percent annual rates of appreciation couldn't be sustained," Mike said. "It didn't make any sense and now sense is returning."

A BUYERS' MARKET?

The reckoning has dazed the Las Vegas market, like the city itself one of the flashiest of U.S. real estate markets in recent years. Investors who gambled hot growth and relatively inexpensive home prices would fuel ever-stronger demand now must contend with a glut of homes pulling prices down.

Local realtors are working to convince sellers the market has turned decisively in favor of buyers, said Reiss, also president of the Greater Las Vegas Association of Realtors.

Yet many sellers have not accepted the shift and are holding out for top dollar even if they must leave properties vacant -- a vestige of the boom mentality. "I've seen a lot of properties sitting out there for a year," Reiss said.

At the same time, convincing buyers to take the plunge is a challenge, said Long Beach, California agent Dick Gaylord, the National Association of Realtors' 2008 president.

"Headline nervousness, I'm finding that more than anything," he said, noting it is eclipsing the lure of favorable long-term mortgage rates of about 6.5 percent.

Mayfield said he is surprised by the hesitancy given financing is so cheap. Rates on 30-year fixed-rate mortgages were as high as 18 percent in the early 1980s, he recalled.

With many sellers stubborn and many buyers on the sidelines, the Realtors group aims to press its members to stress to both that houses are not assets to be "flipped," or turned for quick profits, a view that gave the national housing market a casino feel in recent years.

"It's just a matter of seeing that there is a long-term value in ownership," said Lawrence Yun, the Realtors group's chief economist.

(Editing by Adam Tanner and James Dalgleish)