By Jennifer DeWitt | Wednesday, January 28, 2009
Amid weak economic conditions nationwide, Mel Foster Co. weathered 2008 with a nearly 16 percent decline in home sales and an increase in commercial real estate sales.
Bonnie Sparks-Gray, the president of Mel Foster Co.’s real estatebrokerage division, described 2008 as “a stable business year” for the Quad-City real estate company. “We’ve grown to realize that housing is local, and the Midwest has maintained a positive market for real estatesales,” she said, adding that the real estate problems plaguing several major metropolitan markets and the coasts did not materialize here.
In reporting year-end sales figures, she said total sales volume reached $682.22 million, which was about 14 percent lower than the prior year. In 2007, the company had total sales volume of $800.046 million.
Residential home sales alone accounted for $589.06 million in sales — down nearly $111 million from $700.42 million in 2007.
“This is close to a 16 percent reduction,” she said of the home sales performance. “But when we talk to brokers around the country, we’re hearing how they are 40-, 50- or 60-percent down.”
Sparks-Gray said the Quad-City market got off to a slow start in 2008 with the bad weather last January and February. “We never were able to make that up in production last year, and as we got toward holiday time, we started hearing about the national economy and that added caution.”
Still, she is proud that Mel Foster maintained a 43 percent market share in its eastern Iowa and western Illinois market. That compares to a 45.5 percent market share in 2007.
“I really look for this year to be more solid by midyear. By late spring or summer, people won’t be nearly as cautious as long as we see a slowdown in the layoffs,” she said of the recent spate of Quad-City job losses.
The company will celebrate last year’s sales accomplishments today as about 400 Mel Foster agents and employees gather for the company’s annual awards ceremony at the Golden Leaf Banquet Center, Davenport.
Even with sales down, Sparks-Gray said there is plenty to celebrate including the annual increase in home values versus the drastic price reductions seen elsewhere in the country. “I credit the product knowledge of our agents and their ability to communicate with our clients so that properties are priced accurately in the market,” she said.
Mel Foster’s average home sale price increased from $133,577 in 2007 to $134,245 in 2008. In addition, the average home was on the market 62 days — the same as in 2007.
Commercial sales increased in 2008 to close at $74.56 million, producing the fourth best year for commercial sales in the company’s history. That compared to $73.33 million in 2007
Other sales activity, including referrals and auctions, added another $18.59 million to the $682.22 million sales volume.
While the number of new construction homes was down for the year, Sparks-Gray said the company controlled more than 51 percent of the sales market — up from nearly 48 percent in 2007. The company closed $105 million in new construction sales in 2008, down from $115.6 million the year before.
The Mel Foster Insurance Division also posted a strong year despite a 7 percent decline in written premium. Premiums totaled $42.56 million. The agency, which contracts with more than 20 major insurance companies, employs 43 agents who sell commercial property, casualty agents, employee benefit, life and personal insurance products.
In the real estate division, Sparks-Gray said the year saw a decline in the number of agents in the business. The company now has 368 agents, or 30 fewer than a year ago. Attributing some of the decline to retirements, she said the current market is causing only the serious agents to stay. “Our agents must be as sophisticated and savvy as our consumers — it’s an expectation.”
She added that the company will be recruiting heavily to return to 2007 staffing levels and may find new prospects among those recently laid off. “They’re looking for work, and in the real estate business an agent can be as successful as they want to be,” she said.
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