- The Washington Times - Friday, July 28, 2000

Interest rate increases by the Federal Reserve apparently have done their work in slowing the economy just enough to stave off inflation.

The National Association of Realtors (NAR) is predicting a slowdown in sales of existing homes this year by about 9.3 percent, to 4.71 million but that still marks the third-highest sales year ever.

Meanwhile, new-home sales also will drop by about 6.5 percent, to 848,000, with housing starts following right along down 6.3 percent, to 1.57 million units.

While the Fed has raised interest rates several times over the past year, the NAR still predicts a small rise in 30-year, fixed-rate mortgages by the end of the year to about 8.6 percent, with one-year adjustable-rate mortgages hitting about 7.2 percent.

The economy is still strong. There are still plenty of job openings and housing prices will continue to rise, at least in the near future. But all this talk of slowdown is having a trickledown effect on realty Web sites.

In the wake of the great Internet stock quake of the past few months comes a report from Web researcher Giga Information Group Inc., saying the dot-coms that hang on till 2001 should be OK for the next several years. The analyst group even goes as far to say real estate Web sites will do nothing but grow along with insurance, auto sales, grocery, toy, gift and government sites.

Well, somebody forgot to tell that to the folks at HomeSpace.com, which is up for sale. Inman News Service reports the group is about to select a buyer after sustaining heavy losses, employee layoffs and just downright sorry returns. Even though Web site traffic and revenues are up for the company, it seems it's too little, too late.

The Inman story says Lehman Bros. analysts indicate that on-line real estate overall will see more consolidations in the near future.

On another horizon, iOwn.com has withdrawn its initial public offering (IPO) plans, saying it "does not believe it is in the best interests of its stockholders to proceed with a public offering of the shares." At the end of last year, when the on-line group filed for its IPO, Securities and Exchange Commission records showed iOwn had $4.6 million in revenues and losses of $45 million.

But the woes of these two big sites wasn't enough to scare off a new group announcing itself as "the most comprehensive real estate information Web site." That declaration came from HomeScape.com's new site, which offers information in buying, renting, selling, financing and moving very original, wouldn't you say. And one of its primary partners is none other than iOwn.com. Good luck, guys.

Despite the cold financial realities of start-ups, venture capital and IPOs, when it comes to real estate, there's something that never goes out of business: the warm grip of a good agent who offers nothing more than just plain, good service.

M. Anthony Carr has written on real estate issues for 11 years. Direct your questions and comments to 8411 Arlington Blvd., Fairfax Va. 22031 or e-mail [email protected]

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