Prudential Homesale co-owner talks continued acquisitions, growth
The big keep getting bigger.
Last year, the region's top residential real estate firm — Homesale Realty Services Group Inc. — ventured into the Maryland market through a five-office acquisition.
A sixth Maryland office was recently added.
The Manor Township-based company, which does business as Prudential Homesale Services Group, is now eyeing new deals in Pennsylvania, said Doug Rebert, managing director and co-owner.
"We wanted to not only be survivors but thrivers," Rebert said, reflecting on a growth strategy that has included acquisitions nearly every year for more than two decades.
Prudential Homesale was the only local residential firm with more than $500 million in closed-sale volume in 2011, according to the 2012 Real Trends 500 ranking report.
Lancaster-based Coldwell Banker Select Professionals and Select Services and Hampden Township-based Jack Gaughen Realtor ERA, were No. 2 and No. 3 on that list, respectively. The 2013 report has not yet been released.
Rebert, a 36-year veteran of the real estate industry, has been a co-owner at Prudential since 1981. He lives in Manor Township. The Business Journal spoke with him last week about the company's recent moves and ongoing sales growth, as well as office plans this year.
Q: What changes have you or are you planning for your current sales territory in Pennsylvania?
A: We expect two (Pennsylvania) acquisitions — one in the spring of this year and another before the end of 2013.
We've beefed up our recruiting staff to recruit more agents into the industry. The average age of a Realtor in our industry is 58. Companies (must) recognize they need to add staff because a good portion of their current sales staff will be retiring in the near future.
The company completed transactions totaling more than $2.1 billion in 2012. How much did the Maryland expansion help? How do you continue the upward trend?
Maryland contributed $463 million.
(We need) to do all that we can to prepare and take advantage of current trends. There are at least five trends we're going to see in the real estate business this year. One, sales will increase again in 2013. Two, prices in most areas will go up.
Mortgage interest rates will be going up gradually. The Mortgage Bankers Association projects the 30-year fixed rate to be 4.4 percent at the end of 2013.
Four, in some price ranges and some of our regions, there will be competition that will require the buyer to act quickly. Fifth is that there will be plenty of mortgage money, but good credit will be necessary to purchase.
With mortgage rates starting to rise and prices not going backward, a person who acts now will either save a lot of money or will take advantage of increased purchasing power. What goes down will come up.
Acquisitions seem to be a major part of the growth strategy in residential real estate. Do you see that trend continuing, or is the focus starting to shift more to organic growth through new or expanded spaces in existing footprint?
We plan to do both. We want to grow organically, and we want to continue to grow same-store sales.
For Pennsylvania counties, I project we'll have great growth from organic through helping people get into the industry over the next five years.
We're back and above prerecession numbers. We have slightly more than 1,200 agents.
We have tried to strategically locate our offices in areas that we believe will continue to prosper and grow. Consequently, we expect growth in every one of our 27 locations.
In Harrisburg, we expect to relocate at least one office to larger quarters in 2013. And we're currently expanding our Carlisle office at its current location.
Are you seeing many career moves where folks are getting a real estate license and transitioning from a completely different industry?
We are seeing folks getting into real estate from all different age groups and backgrounds.
Homeownership in southcentral Pennsylvania has risen higher than the national average — between 70 and 75 percent. We've got a whole group of people below (the age of) 35 who want to own homes. There is opportunity for all age groups in the industry.
Due to the length and severity of this recession, we did not see a (high) number of people entering the business from other jobs compared to previous recessions. In this recession, negative news about what was happening to the industry and economy kept that group of candidates away until now. Now that there is positive news, some very talented people are considering getting into the real estate business.
Where does Prudential need to improve the most in the coming year?
Our industry has been slower than some in adopting technology.
As a company, we are unveiling a digital transaction platform this spring which will allow any participant in the transaction to review their part. Instead of having to go to a real estate office to meet the agent, (a buyer) can see counter-offers (online) and can sign a counter-offer in their bedroom.
What is the biggest challenge facing the housing market in 2013?
People want housing. After a period of time, the light goes on. I believe the natural forces are at play here.
Short of something that is a world disruption, like a major collapse of the world's economy, I see the real estate business continuing to improve.