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by Sid Cameron
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uld undoubtedly start a feeding frenzy of banks buying out real estate companies to capture the largest amount of market share they could capture as quickly as possible. Once the first few deals were done, there would be tremendous pressure on other banks to follow suite. Ironically, the real estate industry giants trying to keep banks out of real estate would probably fare quite nicely selling out their businesses!
Doing a quick Google on the nation’s largest banks, I discovered that the largest, Chase Manhattan, is worth $270 Billion dollars. What I found interesting is that Banker’s Trust, the nations 5th largest bank, is only worth $95 Billion- or roughly 1/3 the size of Chase. There’s a huge drop off once you get past the first four banks (Morgan, the number four bank, is worth $173B or almost twice the size of Banker’s Trust). So which four banks do you think will succeed in buying out the largest real estate companies? What do you think will happen to the Banker’s Trust’s of the world when a Chase or a Bank of America gets 5-6 times their size instead of 2-3 times? You guessed it, another round of bank mergers!
So now we’ve established what will happen- mass acquisition and name changes; fewer banks and real estate companies. But what about the average Joe who just wants to buy or sell a home? Realistically, a change probably wouldn’t change the number of real estate agents on the street. Unlike other industries, agents are basically self-employed- so their numbers are regulated by the supply and demand of sales, not by the large companies looking to get into the business.
But fewer agen |
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