Real estate downturns are nothing new to Rick Hoffman. He has seen them in four decades. Now, as in the past, the strong and the smart will survive.
Hoffman, president and chief operating officer of the Coldwell Banker Residential Brokerage in greater San Diego, Temecula Valley and the desert regions, oversees 2,000 employees and about 32 offices in San Diego County, Temecula and Palm Springs.
The regional brokerage outlet handled more than $5.7 billion in closed sales volume in 2005. While figures for 2007 weren't available, Coldwell Banker's earning power was augmented within the past year by the acquisition of One Source Realty, which resulted in three more offices and 200 new sales associates.
Hoffman, who predicts market consolidations, an exodus of agents and closures at some firms, said this is just part of the process.
"We consolidated a couple of offices last year, but don't have as many offices as some of our competitors. So we have done better," Hoffman said. "We have decreased our associates, but the new ones we have brought on have increased our dollar volume."
Hoffman can't deny the market is slower. He added, however, that there seemed to be a bit of an up-tick until the wildfires temporarily shut everything down.
Hoffman, whose firm lost three or four listings in Ramona during the fires, doesn't foresee any long-term damage to the fabric of the market in impacted areas such as Rancho Bernardo, Poway and Ramona. He said the 2003 fires are proof of that.
"It's not hard to market a property in Scripps Ranch," he said.
It also helps that homebuilders are building smarter -- fireproofing goes beyond having a tile roof.
"New construction has encapsulated eaves that can't catch fire," Hoffman said. These have become the norm in new home communities in the Rancho Santa Fe area such as Rancho Cielo, The Bridges and The Crosby, he added.
Irresponsible lending practices, which brought many thousands of people into homes they had no business owning, was in some instances more damaging than the fires -- both to buyers and to those firms making the loans.
"You're going to see more of an exodus from lending than you will from real estate," Hoffman continued.
While admitting the subprime mortgage mess has been a disaster, Hoffman asserted that there are somewhat risky mortgage vehicles worth preserving.
"The interest-only payment is a great product. I have one of those. It makes sense when you have historically low mortgage rates," he continued.
Above all, Hoffman said the real estate business, like any other, is cyclical.
"It was too good for too long," he said.
Hoffman predicts the real estate market will likely be soft for 18 to 24 months.
"It will gradually get better, but we will be bumping along the bottom for a while," Hoffman said.
Hoffman has had a varied career. He worked for a wine distributor in the early 1970s not long after graduating from San Diego State University. Bored with his job, Hoffman began selling real estate on the weekends. He would gain his real estate brokerage license later in the decade and purchase an ERA franchise in Scripps Ranch around 1979.
When ERA was acquired by Coldwell Banker Associates Realty in 1997, Hoffman became part of that team, and has been marching up the corporate ladder ever since.