Industry Visionary

The major change right now is the condition of the housing market, and the challenges that everybody is facing in what is arguably the toughest real estate market in the past twenty-five years, and learning to deal with a market that right now on a national basis has contracted by forty-two percent from it’s high on new home sales, thirty-one percent on re-sale and twenty-nine percent on condominiums.  Everybody in the real estate industry whether you are a brokerage, franchisor, an appraiser, a vendor, or a title company, whatever your relationship is to helping buyers and sellers in the real estate industry you have been directly impacted by the current housing market. From remodelling and retail outlets like Sherwin Williams, Lowes, and Home Depot, to government agencies that make fees on property transfers everybody is feeling the sting of the housing market.

Our industry has been going through consolidation for the last few years. Consolidation has been driven primarily by the fact that historically real estate has been a cottage industry, a fragmented industry, an industry that didn’t rely a lot on technology. With technology and the scalability of marketing and customer service applications, the ability to consolidate the industry has increased, and with the current economic conditions, the opportunities to consolidate are increasing.  I think you are going to see, whether it is through franchising or acquisitions, a continued increase in stronger regional and national brands.

Real Living is on the top of the list. I do think we are trying to do the right things to provide value to franchise owners, agents and consumers to take advantage of the changing market.  I think Realogy doesn’t get a lot of notoriety for being innovative and aggressive, but they should. Richard Smith should get the credit that Realogy deserves, and I think they’re going to continue to be a major player in this industry.

Our industry has not fully embraced the change to provide full information to the consumer in the most transparent and consumer friendly way possible.  Until our industry is really more proactive in this area, not reactive, we are going to continue to be challenged by outside business models that recognize that there is a need that is not being fulfilled by the industry. Specifically speaking, when you look at some of the web-sites that are emerging like zillow.com, it serves as an example of where they feel they have a value to bring to the consumer that is not being fulfilled by the industry, and this suggests that the industry as a whole is not doing the job they need to in this area.  How many people sit with a local real estate web site open on one hand, and have zillow.com open on the other to enhance the properties? Touch points and the quality of information are not being sufficiently addressed by the industry.

That’s a great question because that’s really where it starts. Let’s begin with the notion that it’s not the trade associations or the MLS systems job to provide a solution to real estate brands and companies in this area. However, it is their job to make sure that the sharing of data and information is as extensive as possible so that the brands and companies can take that information and build the right tools and resources around it to support consumer’s desires. 

Historically, our local trade associations and MLS’s have tended to put bells and whistles on the data they provide to their local broker network, versus providing the data as easily and as detailed as possible and then allowing the brokers and the brands the flexibility to co-mingle that data, and build their own bells and whistles and tools on that data platform that are specific to the consumer experience that they want to provide. In other words, give us the information, the raw data and let us dress it up to reflect our brand and how we want to support our customers. 

From a regional and national perspective, the National Association or Realtors (NAR) is doing some creative thinking in this area as to how they could aggregate data from multiple sources. Not just MLS systems, but multiple sources across the country that bells and whistles then can be built off of depending on the brand’s desired and the value proposition to the consumer. That is pretty darn exciting if our trade associations and NAR are successful in doing that!  What would happen if the NAR pulled together all the MLS’s, all the county recorders, all the kinds of information you would find in a zillow.com and elsewhere,  and packaged it in a concise, cohesive, creative, easily downloadable, and usable data base for real estate companies and brands out there? Is that of interest?  Absolutely yes!  I can take that data which is now very extensive (not just a snap shot of today’s current market environment) and has deep information regarding properties, and I’m able to enhance that with community and lifestyle information with a demographic data base that is specific to any geographical area that I am working in.  This significantly improves the customer experience, and I think that this is where as an industry we can then control our future in a much better way than we do right now.

If a brokerage firm regardless of its size has not been actively revamping their cost structure they are awfully late to the game.  In the current market there are only three things you can do: increase revenue, reduce expenses and improve margins.  Companies that haven’t significantly reduced expenses over the past couple of years should probably be looking for a merger opportunity, because I’m just not sure if they’re going to make it. If they are looking for specific places to cut expenses, the number one place to save money is in print advertising, because it’s the biggest waste of money.

At Real Living, we dialogue about the changes we would like to see in the industry on a broad spectrum of topics. We consider the trade associations, the MLS’s, how brokers and franchise systems can improve their services to the agent, and the services that agents provide to increase the consumer experience. We are constantly engaged in the process to make sure that we are having a positive impact either in the outcome or at least in getting the discussion going. 

Of course, the only book I would recommend for 2008 is Real You Incorporated by Karia Sturdivant Rouda, president of Real Living!  Visit www.RealYouIncorporated.com for more info.

I think the biggest thing they should do, and continue to do, is to really communicate extensively at all levels of their membership to get just that question answered. The answer of how to stay relevant in the future evolves and changes and you’ll get different answers and perspectives depending on who you ask.

The two things that I would say Trade Associations and MLS’s can do to improve are:

1. To engage in real communication not e-mail blasts every week about what’s going on at the MLS or the Associations, but pertinent and relevant two-way dialogue communications.

2. To engage in dialogues with all segments of the marketplace they are servicing.  It’s important to reach out and get more of a sense of what’s going on from those who are active in the business, and talk to people from all facets of the industry. Sit down, and ask those questions.

Email Harley, Jr.