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Slump stalls Royal LePage plan
Move into the U.S. market is put on hold
The slump in the American housing market has stalled efforts by Royal LePage Franchise Services Fund to expand to the United States, according to the company's chief executive. Actually striking a deal has proved elusive, as U.S. real estate companies continue to price themselves based on a booming housing market that no longer exists.
"To a certain degree, we got slowed down by the mess that the U.S. market found itself quite unexpectedly having to deal with. We're focused on making the right deal not just a deal," said Royal LePage President, Philip Soper. "Essentially companies [in the U.S.] have valuations in their head based on 2004 earnings and if you look at 2007 earnings, they are a small fraction of what they were."
The U.S. housing slowdown appears to be getting worse. The National Association of Realtors said yesterday it expects existing home sales to fall 6.8% from a year ago to 6.04 million units. It had previously forecast only a 5.6% decline.
Despite the slowdown, Mr. Soper said that the United States remains in LePage's long-term plans for expansion.
August 12, 2007 in Agency Matters | Permalink
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