Overview of the last 10 years in the Real Estate Industry (1995 – 2005)
SWANEPOEL REAL ESTATE TRENDS REPORT 2006/7

General Overview
April 19th rocked the nation as the US experienced its first serious attack on our own soil, when a massive bomb inside a moving van destroyed the Federal building in downtown Oklahoma City, killing 168 people. Timothy McVeigh became a symbol of hatred, while the world glued to the “Trial of the Century” and waited for what was ultimately a "not guilty" verdict for O.J. Simpson, in a murder trial that lasted for 16 months.

Netscape goes public, thereby launching the Internet stock market boom, while “life is like a box of chocolates” made Tom Hanks only the second actor to win two consecutive Oscar’s as Best Actor with his memorable performance of Forrest Gump.

Real Estate Overview
The letters HFS, speculated by some to stand for Houses For Sale, are introduced to the real estate industry when Henry Silverman, CEO of Hospitality Franchise Services, acquires Century 21 (C21) from Metropolitan Life Insurance. This overlooked acquisition (at that time) would turn out the be the start of what many consider the “Most Significant Real Estate Acquisition of the Century”. Longstanding industry tradition is shattered when outsider Bob Pitman, MTV whiz kid, unexpectedly becomes the new CEO of C21, and after only 13 months at the helm, draws major attention when he officially introduces the Internet into mainstream real estate in November at the National Association of Realtors® (NAR) Business Convention in Atlanta by announcing, “Click a Mouse and Buy a House.”

General Overview
Bill Clinton becomes the first Democratic politician since FDR to serve a second term as US President, while in Great Britain the Royal family is forever changed when Prince Charles divorces Princess Diana. On July 17th TWA flight 800, bound for Paris from New York, crashes, driving 1996 to a record year with 1,187 passengers killed on commercial flights, 200% more than the previous year.  A bomb also explodes during the Summer Olympic Games in Atlanta.

The box-office success of Independence Day validates the theory that the larger the budget, the larger the box office take.  Quake and Doom spawn a new era of generation of computer games, allowing users to add more levels of difficulty, thereby creating games that are now almost impossible to master, and World Chess Champion Garry Kasparov defeats Deep Blue, the most advanced chess computer in the world.

Real Estate Overview
As national franchisees enjoy a-merry-go-round ride, the largely ignored acquisition of C21 by HFS the previous year is followed by the acquisition of ERA, Coldwell Banker and PHH.  An unsettling fear begins to set in. A name change to Cendant (NYSE:CD) and a move of corporate offices to unknown Parsippany, New Jersey soon follows.

Meanwhile, another real estate baby, unknown to most, was founded in Ontario, Canada by Steve Morris. Previously a large RE/MAX franchise, Morris decides to create a new residual program to provide retirement benefits to agents, and christens the company EXIT Realty. In the short span of 4 years, the company enters the US market, and by 2005 hits the top 10 list of the largest real estate franchises in Northern America. Like RE/MAX, it appears that EXIT is ordained to re-engineer the real estate broker/agent relationship for many years to come.

1997

General Overview
Dolly becomes the first cloned mammal, sparking a worldwide debate over human cloning. After a journey of 390 million miles, Pathfinder breaches the outer limits of human space when it lands safely on Mars and begins to transmit amazing pictures back to Earth. The world’s brightest comet, Hale-Bopp, makes its closest approach to Earth in more than 400 years.

Britain cedes Hong Kong back to China after 155 years.  The US, UK, and France agree to freeze Nazi’s loot and the US space shuttle docks at the Russian Space Station.  J. K. Rowling's first Harry Potter story is published in the UK and quickly becomes a global phenomena, not to mention one of the five most valuable movie franchises of all time.

Real Estate Overview
NRT, Inc., a Cendant-owned brokerage-holding company, proves that size doesn’t matter when, with a steady diet of acquisitions, it begins to dominate the national rankings, making it the world’s largest real estate brokerage company.  This position continues today, with more than 1,000 company-owned offices.  In 2004, NRT posts a real estate industry record with $204 billion in closed sales volume. 

Microsoft starts what in the end is to be a very brief stint in the real estate industry with the launch of HomeAdvisor.com. What was to become the landmark book in real estate is published, when Real Estate Confronts Reality identifies the key changes that will impact the industry.  Reflection on the predictions made in this book would later prove to be very accurate.

General Overview
The media had a field day with President Bill Clinton and his attempts to cover up hie ‘sexual relationship’ with Monica Lewinsky. The year ends in drama, as the US Congress votes to impeach the President on charges of lying under oath to a federal grand jury and obstructing justice. Oddly enough, the headline was shared with a new drug Viagra, a pill developed by Pfizer to combat male impotence.

Not since the 1960’s has design, form and marketing dominated consumers’ awareness. Products such as Apple’s iMac and Mercedes-Benz’s MCC Smart Car rewrite the rules.
The number of Internet users worldwide reaches 150 million, while the movie Titanic remains unsinkable, capturing a record-tying 11 Academy Awards and becoming the highest-grossing film of all time, raking in more than $1.85 billion worldwide.

Real Estate Overview
It appears that it was a year in which common sense, profits and good management were out of style. The Real Estate Industry outspent every other industry, including retail, technology, legal and pharmaceutical markets by registering the most URLs. Predictions that new Internet companies are going to topple traditional real estate companies flourish. Popular forerunners include IRED, HomeSeekers, HomeWeb, HomeAdvisor and Homes.com. It is, however, the once still-born NAR baby RIN that is revived into Realtor.com, and then HomeStore.com that grabs the spotlight.

Meredith Corp. sells its BH&G franchise to GMAC Home Services, Inc., a subsidiary of GMAC Financial Services, as RE/MAX founder and CEO Dave Liniger becomes one of a three-pilot crew who attempts to beat Richard Branson, the Virgin multi-millionaire, in an around-the-world, stratospheric helium balloon race.

General Overview
Diamond launches Rio, the first portable music player for compressed digital files that can be downloaded from a computer and the Internet. The music world is introduced to what would become the MP3 phenomena in just a few short years. 1999 experiences 457 IPO’s, most of which were Internet and technology-related.  117 of those public introductions double in price on the first day of trading. Everyone suddenly seems to know everything about making money by picking the best stocks.

John F. Kennedy Jr. and his wife are lost at sea near Martha's Vineyard, while Nelson Mandela, the first black president of South Africa, steps down from leadership. The new single European currency is launched, while panic grows over global chaos as the time clock strikes 2000 at year’s end. The millennial anxiety over the supposed ‘Y2K’ bug is based on a meltdown of air-traffic control, banks, and power shutdowns. The century ends on a high note, as peace descends across the world with hundreds of thousands of people congregating in places such as Sydney Harbor, the Pyramids, Paris, London and New York to celebrate the new millennium.

Real Estate Overview
Following the real estate “dotcom” madness of the previous year, creating a new brand in real estate reaches new heights.  Ideas are ridiculously expensive, frequently creative, and almost always amusing. ZipRealty introduces a new era of real estate company names as a home-based, lead generation start-up, HouseValues.com, quietly opens its doors in  December 2004 after the dotcom crash, and turns heads when it raises almost $100 million in a successful IPO (NASDAQ: SOLD).

Back in traditional real estate, college hockey star Ronald Peltier consolidates nine prosperous real estate companies and propels the new corporate parent, HomeServices.com, to the No. 2 spot in sales in the US. Former C21 executive with Rick O’Neil revives 70’s Help-U-Sell. Widely perceived as a discount brokerage, the company is actually a full-service operation that allows customers to choose what they would like to pay for real estate services through unbundling. Congress finally completes the long-anticipated revocation of the Glass-Stegall Act, creating a furious debate on whether financial institutions may enter the industry as owners and operators of real estate firms.

General Overview
March 11, 2000 and a crack in the Stock Market is just the opening act to Friday, April 14, when Wall Street experiences its biggest one-day fall in history. This week US markets lose $2 trillion in value, mainly NASDAQ hi-tech companies.  Bill Gates sees his personal Microsoft fortune drop $30 billion in a few hours. It becomes abundantly clear that the dotcom crash is signaling a gross over-valuing of technology shares. In the following two years the NASDAQ Composite crashes 78% as it falls from 5046.86 to 1114.11.

The neck-and-neck presidential race continues beyond election day, when, on December 13th, 36 days after the election and the flurry of lawsuits, counter suits, appeals, and bitter partisan bickering, George W. Bush is declared President-elect. The 2000 election will go down in history, not only for the ‘hanging chads’ gridlock in Florida, but also for the way in which it split the Supreme Court, which had never before stepped in to rule on a federal election.

At 25, Tiger Woods orchestrates one of the most spectacular seasons in sports' history when he wins nine of the 20 PGA Tour events and becomes the second golfer in history to win three of professional golf's four major tournaments in a single year.

Real Estate Overview
During January, HomeStore.com (NASDAQ: HOMS) becomes the newly born real estate dotcom darling and peaks at $138 per share. Two years later, after the resignation of founder and CEO Stuart Wolff in the wake of an accounting investigation (which results in a substantial restatement of revenues) the company’s share price hobbles at a decimated 32 cents. What starts as “an investigation into potentially anti-competitive conduct involving the online realty listings industry” by HomeStore, the U.S. Department of Justice (DOJ) gradually widens the investigation into numerous facets of organized real estate brokerage, formally filing suit in 2005 against the National Association of Realtors®.

General Overview
The world is irrevocably changed when two commercial planes are hijacked and flown into the towers of the World Trade Center in New York City. Shortly afterward, another plane crashes into the Pentagon, while a fourth hijacked plane, heading for the Washington DC, crashes in a field near Shanksville, PA. Osama bin Laden, a millionaire fundamentalist Saudi, publicly takes credit for this atrocity, the world's deadliest act of terrorism, which causes the largest single-day loss of American lives in recorded history.

Real Estate Overview
Early in the year, realty dotcoms burn due to irresponsibly funded, single revenue, difficult-to-implement one-page business plans pay the piper. Seizing the opportunity with an almost military precision, Fidelity National Financial (FNF) beats other major title companies to the MLS arena with various key acquisitions.

General Overview
A wave of corporate scandals erupt when Enron, the country's largest energy trader, files for bankruptcy in December 2001 while under federal investigation for hiding debt and misrepresenting earnings. Arthur Andersen, Enron's accounting firm and auditor, falls next, after it is convicted of destroying Enron-related documents.  This debacle is followed by similar events with WorldCom, Tyco, Qwest, Global Crossing and ImClone.

A human-like skull that may be up to 7 million years old (twice as old as any others found) is discovered and named Toumai.  Poma, the first wearable personal computer for consumers, is announced.  It weighs 11 ounces and clips onto a belt.  A 2-ounce handheld knob takes the place of a mouse, and an inch-wide 3-ounce screen slips over one eye.

Real Estate Overview
A well-promoted real estate book, “The Millionaire Real Estate Agent: It’s Not About the Money,” by Gary Keller, Dave Jenks and Jay Papasan is published.

Consumer adoption of the Internet as a means to search for homes accelerates rapidly, and by 2005 will significantly change the way in which the entire real estate marketplace operates.

General Overview
Sponsored by an international consortium of six nations and considered by some to be the greatest scientific breakthrough in the history of medical science, The Human Genome Project announces the completion of the human genome sequence.  What amounts to a map of human DNA is finished more than two years ahead of schedule at a cost of $2.7 billion. Average life expectancy, which is already 77 years in the US, continues to rise.  With stem cells, cloning, and human DNA mapping, scientific advancements rapidly outpace the nation’s ability to deal with the ethical issues surrounding death or the delay thereof.

Not to be outdone, NASA scientists claim to have captured the most precise image of the universe, shedding light on its origins, age, and providing further evidence for the long-standing Big Bang and inflation theories. The Hubble telescope detects the oldest known planet, nicknamed Methuselah—apparently formed 12.7 billion years ago.  In contrast, all other known planets, including Earth, experience creation about 8 billion years later, roughly 4.5 billion years ago. President Bush launches the first preemptive war in US history, and shortly after taking control of Baghdad, signals the collapse of Saddam Hussein's oppressive regime.

Real Estate Overview
Another big name enters the real estate industry, when influential media mogul Barry Diller purchases LendingTree. In the following years his company, InterActiveCorp (Nasdaq: IACI), also acquires other real estate assets such as RealEstate.com, ServiceMagic, iNest and Domania.

London-based Foxtons buys New Jersey-based Your Homes Direct (YHD) and although the acquisition is relatively small, it is the first UK-based real estate company to officially expand into North America. They now operate 27 branches, saddling the Atlantic with both arms operating under a 2% commission.

General Overview
Terrorist attacks span the globe when 202 people are killed and 1,400 are injured in bombings at Madrid's railway station. Ninety passengers die when terrorists blow up two planes in Chechnya, and detonate a dirty bomb in a Moscow subway. Hundreds cheer as same-sex marriages become legal in Massachusetts, while hundreds of thousands stand in line to mourn the passing of Ronald Regan, the 40th and one of the nation’s most beloved Presidents.  Shortly thereafter three million Red Sox fans fill the streets of Boston to celebrate their first World Series win since Babe Ruth, over 86 years ago.

The largest earthquake in 40 years—9.0 in magnitude—ruptures the floor of the Indian Ocean off the coast of the Indonesian island of Sumatra the day after Christmas, triggering the most deadly tsunami in all history. Over 225,000 die, while millions suffer devastation and are left homeless in Indonesia, Sri Lanka, India, Thailand, the Maldives and even eastern Africa.

Real Estate Overview
NAR achieves an unprecedented milestone in Association history by exceeding one million members for the first time, while RealtyU® becomes the nation’s largest educator by surpassing 250,000 real estate agents trained in one year.  The first national non-profit charitable organization focused exclusively on helping new licensees in the real estate industry to succeed is formed.  Within two years The Real Estate Apprentice Foundation announces processing an astounding 5,000 grants totaling $1 million per year.

Zip Realty draws attention when, in what was touted as the first initiative of its kind, the company reserved up to five percent of the it’s common stock for purchase at the launch price for anyone who bought or sold a home with Zip Realty (NASDAQ: ZIPR) prior to September 30, 2004. The IPO raises $68 million.

General Overview
The Atlantic hurricane season becomes the most active in 154 years of recorded history. For the first time since the current naming system was introduced in 1953, all 21 names on the year's list are used, forcing the National Hurricane Center to name five later storms after Greek letters. Katrina becomes the most devastating hurricane, destroying towns in Mississippi and Louisiana, killing more than 1,000 and displacing a million people when levees in New Orleans are breached.  Soon over 80% of the city is submerged by the flooding. 
Terrorists continue attacks when London becomes their next victim with Britain's worst attack since World War II. Four bombs exploded in three subway stations and on one double-decker bus during the morning rush hour, killing 52 and wounding more than 700.
In March, paleontologists discover the existence of soft tissue in a 68-million-year-old Tyrannosaurus Rex fossil – an unprecedented find in a prehistoric creature.  Scientists assumed no such tissue could survive more than 100,000 years, but the soft tissue included cells and blood vessels.

Since 1978, Freedom House has published Freedom in the World, an annual comparative assessment of the state of political rights and civil liberties around the world. According to their latest survey, 44% of the world’s population is free (89 countries and 2.8 billion inhabitants),  19% are partly free (54 countries with 1.2 billion people) where political rights and civil liberties are more limited, and corruption and ethnic or religious strife is often the norm and 37% are not free (49 countries with some 2.4 billion inhabitants).

Real Estate Overview
Celebrating five generations, Illinois powerhouse Baird & Warner (founded in 1855), celebrates 150 years of continuous real estate business as the oldest real estate company in the country.

Longstanding RELO network, the organization that encompasses 650 of the foremost local and regional brands in residential real estate, collectively sells 1.4 million homes annually valued at $380 billion, and announces a name change to Leading Real Estate Companies of the World.