Real estate firm Mel Foster Co. celebrates ‘local market’ success
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By Jennifer DeWitt | Friday, January 25, 2008 |
Against a bleak national housing market, Mel Foster Co. ended 2007 with solid real estate sales — down just over 1 percent in residential sales and up more than 15 percent in commercial sales.
Bonnie Sparks-Gray, the president of Mel Foster’s real estate division, said the housing market is a “local market,” which proved to be positive in 2007 in eastern Iowa and most of western Illinois. “We did go down a little bit, but it’s the outlying areas in western Illinois that pulled us down,” she said, pointing to the Kewanee market in particular.
In fact, “revenues were up
1 percent over those of 2006 which wasn’t the banner year of 2005, but a profitable year nonetheless,” she said.
More than 320 Mel Foster agents and employees will gather this morning at the Golden Leaf Banquet Center, Davenport, to celebrate the year’s accomplishments. During the company’s annual awards breakfast, a total of 164 associates also will be honored for achieving membership in the company’s different sales clubs, including Honor’s, President’s, Executive and Chairman’s clubs. Mel Foster also will host its dinner and dance Saturday at the Davenport RiverCenter.
In announcing the results Thursday, Sparks-Gray said the company reported total sales volume of $799.32 million in 2007, a decrease of 0.08 percent from $799.94 million in 2006. Residential sales alone totaled $700.73 million, down just 1.32 percent from $709.96 million in 2006.
Mel Foster’s commercial sales climbed 15.6 percent to $71.84 million from $60.63 million a year ago. Other sales activity, including some referral business and property development, added another $26.74 million.
Sparks-Gray said additional career development efforts with the company’s 13 commercial brokers helped boost sales last year.
Despite what is happening nationally, she said the local housing market has remained very steady. “I kept waiting for the other shoe to drop. But at the end of every month you look at the stats … and every single month we exceeded in market share what we did last year.”
The Quad-City real estate company’s saw the best growth in the metro Quad-Cities, where it closed the year with 45.5 percent of the market share. That compared to 43.2 percent in 2006. Of its sales, Scott and Rock Island counties accounted for $485.3 million in sales, which was up from $472.67 million in 2006.
“Not only do these numbers speak positively of our local economy in general, it shows we’re not a player in the national housing downturn,” Sparks-Gray said, adding that the foreclosure woes sweeping the nation have not proven as severe here. “But that doesn’t take away from the impact it has on each of those particular homeowners.”
Other signs of the local market’s strength, she said, include the fact that the company’s average sales price rose to $133,626 in 2007 — a 5.6 percent increase from $126,148 in 2006.
Citing statistics from the Quad-City Area Realtor Association, she said the average days-on-the-market for residential sales was 57 days last year, down from 61 days in the previous year.
Mel Foster did see a decline in the number of its closed sides — every sale has two sides. The company had 7.3 percent fewer sides, or 5,244 in 2007.
The list-to-sale price ratio was 97.02 percent, meaning buyers paid, on average, 3 percent less than the original asking price. That was down from 97.12 percent in 2006.
Sparks-Gray said new construction sales also were favorable in 2007, although far stronger in Iowa than in Illinois. Mel Foster Co. closed $127.23 million, or 51.3 percent of the new construction sales. That compared to 45.7 percent in 2006.
The company’s new construction sales totaled $103.72 million in the Iowa Quad-Cities, or 51.9 percent of the market, and $23.54 million in the Illinois Quad-Cities, or 48.7 percent of the market.
Mel Foster opened a new office in 2007 in Rock Falls, Ill., and now is planning another office in nearby Sterling. That market is beginning to see more activity as retirees from the Chicago area want small towns to retire in that still give them easy access to Chicago, she said.
Meanwhile the company’s insurance division saw a slight increase in premiums with its agents writing more than $45 million in premiums last year. Mark Fensterbusch, the division’s president since 1984, said 2007 saw some growth in the personal lines but strong growth in its employee benefits business, or health and life insurance.
He attributed to growth in sales of employee benefits to the addition of three agents in the past two years.
“The commercial property casualty industry is in a soft market, meaning we have a large number of insurance companies who are lowering premiums to acquire more market share,” he said. “That’s good for our customers because we are delivering lower renewal premiums, but not good for agents.”
The division employs 22 agents and 21 additional staff.
But across the company, employment is down slightly. Sparks-Gray said the National Association of Realtors has been predicting a decline in agents for the past four or five years. Mel Foster employed 368 agents in 2007, a 19 percent decrease from 2006 when it had 387.
“We’re beginning to see fewer agents doing more of the business,” she said. “Our agents must be as sophisticated and savvy as our consumers — it’s an expectation. The business isn’t for everybody and many times until they get in and try it, they don’t know what type of effort it takes.”
Looking into 2008, she expects a steady market. “I look for 2008 to be about like 2007. I’d like to see a rebound especially with the interest rate lowering and how pumped up the agents are. They’re really doing well.”
Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com.
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