A rare look at real estate finances

July 21st, 2008 at 10:15am Alex Gary

If there is a group of professionals that like lawsuits as much as attorneys it would have to be journalists.

Especially business journalists.

The beauty of public companies is every three months they tell us how well — or how poorly — they are doing. But the vast majority of companies that we cover are privately owned and don’t have to tell us anything.

Except when those companies become involved in a lawsuit.

Last week Nate Legue wrote about a lawsuit involving Jeff Petry and Frank Wehrstein, the co-owners of Dickerson & Nieman Realtors, the area’s dominant real estate firm.

The suit is interesting just because of the people involved — including Greater Rockford Airport Authority Board Chairman Mike Dunn — but it also gives us a look at Dickerson & Nieman’s finances and hints at how the home sales slowdown is affecting the company.

According to one exhibit, Dickerson & Nieman’s gross revenues grew from $12.6 million in 2003, to $13.6 million in 2004, $14.7 million in 2005 and then hitting $15.3 million in 2006.

Through eight months of 2007, though, the revenues were at $8.6 million, or on pace for $13 million. That’s a generous estimate though. Through August of 2007 home sales were down 16 percent compared to 2006, but in the final four months they fell 25 percent compared to 2006.

The copmany’s net income was taking a hit even before 2007 though. In 2003, Dickerson & Nieman’s net imcome was $1.15 million. That increased to $1.35 million in 2004 and $1.43 million in 2005. In 2006, it fell to $1.18 million and it was $682,000 through August 2007 or on pace for just over $1 million.

With sales down 33 percent in 2008 compared just to 2007, obviously real estate companies — and not just the agents — are taking a hit and now we know, at least in one case, how much.

Entry Filed under: Uncategorized