Seeing back to the 70’s Sears envisioned an office in their stores where a customer could buy stock and even real estate. It was a bold look at the future from a single of the world’s most significant retailers. Every they had to do was to get the consumer to come to their stores to work. This was quite a challenge thrown right down to both Wall Street and Primary Street USA. Most of us probably never noticed or remember this strategy, and it never received off the ground. Persons just did not associate Sears with stock or real estate; they were a department store. advogado advocacia imoveis em leilao de imoveis rio de janeiro
In fairness to Sears, the technologies and conveniences would not exist to permit the master plan. Sears may have also thought themselves too big to fail. That theme does seem to be to become constant.
Hmm, it shows up that history does indeed repeat itself, and perhaps at shorter and not as long intervals. It may be ironic that by racing up processes and the rate at which things can change, the lessons of history are lost at a quicker rate. Did that make sense? Whether it did, you may well be considering somewhat like me – you’ve been cautioned.
In the 1980’s the successful real estate agent became more independent and needed fewer services from the securities firm. As they claimed a higher and higher portion of the brokerage fee, margins for real estate brokerage commenced to shrink. Some extremely high interest levels had a similar impact on the mortgage banking industry. Except if buyers had no choice, they were doing not take on these filled with air mortgages. The mortgage industry literally shrunk along with their income. We all know that real property cycles; it goes up and it goes down. The curve is seldom smooth, and it is punctuated by sharp turns in one direction or another. Just about all features of the real estate industry react quickly to the conditions on the market that affect it. We now have the background for the next attempt to make a commodities market from real estate process.
In mid 1970s, real estate Settlement and Procedures Act (RESPA), as amended, was passed. That opened the doorway for consolidations within the industry. To foster competition, companies were regulated in order to avoid violations in the industry and keep prices to the consumer lower. It was almost ironic that the particular act that was exceeded to prevent abuses, in a way opened the door. I don’t know that this has empirically recently been indicated that RESPA actually lowered costs or avoided abuses. With HUD as a watchdog, there was little real enforcement, and although fines were accessed, industry practices finally were still left to the states to manage. It took many years to sort it away, and Stock market only a few months to make it yesterday’s concern.
The purpose for mentioning RESPA is that it allowed what was called “controlled business entities, ” a term later converted to “affiliated business entities. very well The home builder and real estate brokerage could now have an attentive mortgage and title business. The theory was that this may somehow create efficiencies and economies lowering the cost and improve service to the consumer. That didn’t. With all of this vertical integration, each one of the on their own managed businesses was trapped in the same financial wringer.
What was not taken into consideration was your pro-cyclical nature of the model. When one business was down so were the others. The upside was champagne and roses, but the disadvantage left little room for beer and carnations. There have been other oversights as well. Not understanding the risk models for businesses outdoors of their core skills was seldom given the focus it deserved. Few also embraced managing the company with the same enthusiasm they had for their core model.
The effect was that many of these affiliated arrangements have failed, and the industry model for how orders are managed remains much the same as they have since the post WORLD WAR II era. Certainly technology has improved systems, but not practically to the level that it could. The competitive natures individuals areas of the real property business keep the technology proprietary and for that reason parochial. A 21st Century model for the industry may come from somewhere outside of the core real estate industry. Next came a significantly a more organized and systematic attempt to create a commodity market in the real estate market.