Taking a look at the Real Estate industry from the perspective of an involved real estate blogger who does a lot of reading, research and speculating about the industry, I can tell you that at times I have been excited, optimistic, frustrated, and hopeful about the “Revolution” happening in the business. But when I look at the reality of it all, without judgement, I’m mostly amazed and here’s why;
Everything is still the same
At least when it comes to listings. Sure, there are a few more companies and some new models, but when you look at the market share of these new models- they seem to be taking their business from other new models and smaller shops, not from the large brokerages. In my area the large brokerages are growing and although there are tons of small companies popping up every day, the don’t become relevant and they aren’t taking away market share from the established companies.
There is a pool of consumers (25%) that are going to use alternative models, go the FSBO route, and use the lowest-bidding agent they can find and that’s just the way they are. They would rather “save” on commission then make more money with a higher sales price.
And that pool of people are selecting between those smaller brokerages and new models, but the majority (75%) of consumers are just not buying into it. They are going to use a large full-service brokerage no matter what is going on in the industry and no matter what “special deals” there are. They don’t care so much about “saving” money- they care about the job that gets done.
So newer models and smaller shops are all competing over 25% of the market and the major brokerages are all competing over 75% of the market. There are some cross-overs here and there, but this is the same ratio we’ve probably had for the last ten or fifteen years and it doesn’t seem to be changing much.
I like the new innovation. In fact I happen to think I have the best real estate search on the planet (BlueRoof.com). I feel this way because I’ve been told this by a lot of people and my clients feel this way, but mostly because it’s just my own opinion. I’m building it to be what I want in a real estate search. Of course there are tons of things I am still adding to it and improving on it- that’s how websites are. But as much as I like the new innovation and the new sites popping up- the consumers are still listing with big brokerages.
Seattle seems to be a hot-bed right now of real estate tech, with Zillow and Redfin and about ten other new models, but isn’t JohnLScott and Coldwell Banker still the biggest and growing?
Buyers are finding agents on the internet, but sellers aren’t finding their agents that way- the RE 2.0 market is a buyers market- not a seller’s.
Used to be that you had to “List to Last”- meaning that to last in the business you had to get listings. Not so anymore- now you can have buyers come to you by using other people’s listings on your website. But the listings aren’t coming so much from internet.
At BlueRoof we’ve taken a lot of listings (about one every 2-3 days average) and we’ve had quite a few of the clients contact us from the website after reading about us or hearing about us or just finding us. But the amount of buyers we get compared to sellers is huge. My other website is even more so.
What thisall means to me is the consumer is enjoying the internet search and innovation when they look to buy a home, but when it comes to selling, the new “revolution” is pretty much the same as it has been.