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Sober brokers plan to cut costs as real estate downturn deepens

(Boonton, NJ, December 29, 2008) — It’s hard to escape the harsh reality that the housing market is in one of its toughest spots in decades.

Home prices in 2008 saw their steepest decline since the Great Depression. Sales volumes have plummeted. The broader economy is reeling, too, with the stock market falling and unemployment soaring.

In that sobering environment, we asked real estate professionals how the economy and housing market are affecting their business plans and budgets for the New Year.

The responses weren’t surprising. Brokers plan to hunker down until more profitable times return. Among the findings of our survey:

• Marketing. More than half of brokers (55 percent) will spend less on marketing in 2009, while 33 percent will keep marketing budgets the same and 12 percent will spend more. One common theme: Brokers continue to move away from pricey print ads.
• Overhead. More than half (54 percent) of the brokers responding will cut overhead in 2009, while 24 percent plan to spend more and 22 percent will spend less. Respondents said they’re closing offices, cutting staff, and pushing for better deals on phone service, supplies, and copiers.
• Staff compensation. Two thirds say staff compensation will stay the same, while 19 percent say it will decrease, and 16 percent say it will increase. Many of those citing decreases note that some portion of staff compensation is transaction based, which has been declining. However, some brokers are cutting staff positions while others are adopting flexible work arrangements to avoid layoffs.

The full text of the report, Sober brokers plan to cut costs as real estate downturn deepens, is available online at the Real Estate Broker’s Insider website, http://www.BrokersInsider.com/rebitrends.php.

About Real Estate Broker’s Insider

Real Estate Broker’s Insider provides agency broker/owners with actionable news and information on managing their businesses for greater profitability.

Website: http://www.BrokersInsider.com