Realtors Eye Rebound – The Morning News, Northwest Arkansas
Last updated Tuesday, February 3, 2009 5:23 PM CST in Business
By Kim Souza
THE MORNING NEWS
ROGERS — Despite a significant drop in overall company home sales, Crye-Leike Realtors have found at least one growth market: Northwest Arkansas.
More than 120 Crye-Leike agents gathered at the John Q. Hammons Center in Rogers on Tuesday to rehash 2008 and look forward to a better 2009. As the nation’s fourth-largest real estate company, Crye-Leike reported total company sales in 2008 were $4.2 billion, down 26.3 percent from a year ago, and 31.1 percent from 2006.
“I know that $4.2 billion looks like a big number but there was no profit in it,” owner Harold Crye said.
However; one bright spot in the discussion was the progress the company said it is making in efforts to grow marketshare in Northwest Arkansas.
When Crye-Leike came to town in early 2007, Crye hoped to hire 150 agents by that year’s end, increasing that number to 400 by 2011. On Tuesday, he said the company has grown its agent base to 144 agents, well short of the original goal but very close to the 150-agent goal reset a year ago.
“We are pleased with our growth in this region, but our original goals were compromised by the slower economy of the past year or so. That said, we are happy to be gaining regional marketshare at a time when the home sales in Benton and Washington counties were down 25.1 percent overall,” Crye said.
In 2008, the company grew sales volume in Northwest Arkansas to $130 million, up 71 percent from the previous year, Crye said. He credits the healthy growth to the recruitment and hiring of additional agents in the past year.
According to Moundata.com, the total regional sales volume was $935.79 million last year. That gives Crye Leike a 13.8 percent piece of the local marketshare. He said the company plans to hire 50 more agents this year and complete several building projects underway in Bella Vista, Siloam Springs and Bentonville. The company’s $15 million capital spending spree on buildings in this market is an investment Crye said would pay off in time.
“We have no plans to scale back in this region, it’s actually doing better than other areas,” Crye said.
The industry is battling a two-front war fighting low consumer confidence and tighter credit requirements with respect to buyer demand, he said.
On the flip side, he said sellers are facing declining home values.
Conditions provide a “perfect storm” of sorts for those who earn a living selling houses. This has prompted the regional agent pool to shrink by 361 licensed agents in the past year, a 14.8 percent decline, according to Ethan Nobles, spokesman for the Arkansas Realtors Association.
Statewide, Nobles said 5.2 percent, or 458 fewer agents, left the business.
With 126 offices in eight states Crye-Leike has 3,574 agents. Located primarily in the south, Crye-Leike has tightened its belt and tried to control overhead costs during these challenging times, outside this region.
“We have consolidated some offices in poorer performing areas of Memphis that was hit hard when the subprime loan market collapsed, when two plants closed near Springfield, Tenn. we closed an office and moved those agents to another location,” Crye said.
The company is not scaling back expansion efforts in Northwest Arkansas, because this market is showing resilience and outperforming other regions, he said.
Crye told the group that next year they would likely look back at the presidential inauguration as the bottom of the market.
“Not that we would turn up right away, but more likely run along the bottom of the trough for at least another quarter or so. I am hopeful that a stimulus to help buyers will come sooner than later,” Crye said. “But until bankers want to lend again and buyers regain confidence the industry won’t be able to recover.”