Housing Crunch Pushes Real Estate Offices To Close – Nashville Business Journal

Friday, December 5, 2008

 

Nashville Business Journal – by Jenny Burns Staff Writer

 

One of Greater Nashville’s largest residential real estate firms ? ERA Pacesetter Partners ? is closing up shop.

 

It’s only the latest casualty of tough economic times. About 100 residential real estate offices have closed, merged, changed names or canceled their listing subscription between January and November, according to the Multiple Listing Service.

 

“We just couldn’t continue month after month to keep seeing losses. It’s going to be another tough year” unless the government offers some kind of tax advantages to buy houses, says Tony Carletello, owner of the Brentwood-based ERA Pacesetter Partners. “It was hard to shut it down. I’m proud of our agents and our managers.”

 

The 25-year-old ERA ranked as the 10th largest firm in Music City last year based on company sides, the agency’s portion of a transaction. It had $246 million in gross sales in 2007, with an average home price of $190,034, according to Business Journal research.

 

Carletello bought the firm in 2003 and expanded to 250 agents and seven offices by 2006. It then started consolidating offices at the recommendation of Richard Smith, CEO of Parsippany, N.J.-based Realogy Corp., which owns ERA and three other real estate brands.

 

“He saw this coming,” says Carletello, who was named top selling agent in Nashville in 2001.

 

The consolidation cut the firm to about 100 agents and three offices this year, but it still couldn’t survive a 28 percent drop in home sales.

 

Carletello recommended the ERA agents join Coldwell Banker Barnes, which is also owned by Realogy, says David Barnes, owner of Coldwell Banker Barnes. The firm has taken on about 50 of ERA’s agents, including Carletello.

 

Barnes says all real estate companies are finding ways to operate as smart and frugally as possible, without hurting sales.

 

“We are making the decision that nothing really is going to change for 12 months,” Barnes says.

 

Coldwell Banker Barnes closed its Harding Place office because of slow sales in that area. Its other eight offices are staying intact. Most new agents from ERA Pacesetter will go to Barnes’ Brentwood and Cool Springs offices, he says.

 

The total number of offices that have closed this year isn’t clear, but the MLS reports about 100 firms that are no longer active in the system as of Nov. 3 for various reasons.

 

“Quite a few small offices have closed,” says Robb Campbell, owner of Re/Max Elite. There are “lots of closings, consolidations and mergers going on right now.”

 

Crye-Leike closed four real estate offices earlier this year. CEO Harold Crye says he expects more consolidations in the larger firms. While sales are down about 25 percent from last year, Crye says October and November of 2007 saw similar declines.

 

“You can’t pay your bills when your volumes are down 50 percent,” he says.

 

The real estate industry had geared up for a high volume of sales during the boom years, so an exodus of agents and offices may be necessary, Crye says.

 

Re/Max Colonial Realty closed in Clarksville as well as Re/Max Real Estate Partners in Chapel Hill, Campbell says.

 

Other offices have seen mergers and name changes. Re/Max Elite Pleasant View moved to Clarksville, and the company’s two Kennar Avenue offices consolidated into the Brentwood office, Campbell said. Re/Max Professionals in Columbia changed its name to Re/Max Elite because it was acquired.

 

Three EXIT Realty offices were on the inactive list. Two changed names with new owners, and one went out of business. EXIT Realty at Pirates Cove closed when its Alabama owner, which had two offices there, decided to focus on his home state, says Jean Marie Grumbles, owner of EXIT MidSouth.

 

And more consolidations are coming.

 

Zeitlin & Co. will combine its Brentwood and Franklin offices into a central office at the Meridian Cool Springs.

 

Prudential Woodmont Realty is closing its Nashville, Hermitage and Hendersonville offices and merging them with its Brentwood office. General Manager Marilyn Manka says technology has changed the real estate industry to make it more cost effective for agents to work from home or a central office.

 

jburns@bizjournals.com | 615-846-4276