It seems that every decade or so a year comes by that defines a period in our history - a date when looking back we may point to as a turning point - a date when innovation became mainstream - a date when it changed forever.
Like any other industry, residential real estate has also had a few such years, like 1973 and 1995 that were watershed years and the beginning of major fundamental shifts in the real estate chronicles of time. Well it is too earlier to say for sure, but 2007 may be one of those that we will be adding to the elite list of extraordinary years in real estate.
Think back to 1973 - the year that the industry was introduced to national expansion, franchising and the value of real estate branding on a national scale. Within a 12 month period the industry saw the birth of Century 21, Realty World, Electronic Realty Associates (ERA) and RE/MAX. The latter a company that during the 70s and 80s would become the driving force in re-engineering the way the industry had managed real estate commissions for decades.
The next shaping saga started in 1995 - the year HFS (later Cendant, now Realogy) entered the real estate industry. Their entrance at the time could have been as inconspicuous or unimportant as that of previous entrants such as Metropolitan, Sears or TWA. But it wasn't to be. This time an outsider was going to be included in many a memoir. They have risen to the position of the world's largest real estate group, owning the Coldwell Banker, ERA, Sotheby's and Century 21 brands. 1995 could also be considered as the first year the Internet was formally introduced to residential real estate, when at the NAR convention we were told to "Click a mouse and buy a house." Meanwhile, a new real estate company was birthed that same year, EXIT Realty, and similar to RE/MAX two decades earlier, it was setting out on a course to reshape the distribution of real estate commissions.
So what makes 2007 a contender as a landmark year? Well, look back at a few of the substantial events of the year that could have, deep, far reaching impacts:
1. Let's start with Cendant/Realogy. Not because they're the biggest real estate group of all time but because of the interesting moves they made this year. Originally one large diversified group, the company un-bundled into three separate entities and spun off into separate companies. The real estate division, renamed Realogy, the proud owner of four of the countries top 15 real estate brands, found themselves owned by Apollo Management, who quickly added a fifth new brand by re-introducing a former 1980s brand "Better Homes & Garden" through a 50 year licensing agreement. One may be tempted to speculate as to whether Realogy will be the driving force in the re-engineering of the real estate industry or a casualty thereof?
2. Multiple Listing Service (MLS). In 2007, after being the life blood of the residential real estate industry for decades, broker frustration regarding data uniformity, duplication, costs and the continued advancement and growth of the Internet triggered a flood of announced and planned MLS mergers. Speculation regarding expanded access by anyone, specifically non-participating Realtors(r) and consumers, and relentless pressure from consumers and new paradigm real estate brokerages drew investigation by the DOJ (Department of Justice) and caused MLS to become the leading controversy of the year. Questions are plentiful and only a few have not been controversial as the debate over ownership and access continues. Will MLSs remain the golden thread that have held and financed many Realtor(r) Associations or will we see a different structure all together?
3. Web 2.0. Technology moved from the back office to once again take center stage. This time it built on the foundation laid down in the 1990s. The Internet was back with blogging, mashups, social networks, business networks, wikis, widgets and more. Although many of the new products actually started a year or two earlier it was as if 2007 really validated the new 2.0 technologies and innovations and brought them into mainstream real estate. If you don't already have a blog or at least read a blog, belong to a business or social network and have bookmarked a wiki on your "favorites," then you may want to consider adding it to your 2008 to do list. Involuntarily one's mind slips back to the dotcom bubble, wondering how long the wild ride is going to last this time?
4. Real Estate Enjoys Mainstream Media. We will definitely remember 2007 for collapse of the sub prime market, the troubles and woes of American Home Mortgage, Countrywide and many other lenders. But more directly entwined into the future of the residential brokerage industry was the fact that new paradigm brokerages seemed to grab the imagination of the "outside" media. Low cost Redfin, while really only a small local company, vaulted into national recognition when it was prominently featured in a segment of the CDS program 60 Minutes. New comer Zillow already enjoyed a higher profile due to its illustrious Expedia founders and it hit the jackpot when Zestimates made the front page of Fortune magazine, accompanied by an 8-page coverage describing how they were "changing" the real estate industry. Will we look back one day and point to Redfin, ZipRealty, Trulia and Zillow as the ones that led the change or will they, like eRealty and Foxtons, be a footnote in history?
So What's Next?
Use 2008 wisely to restructure your plans and incorporate anything new that may have an impact on your business, help you grow your market share (even during the declining market) and lay a solid foundation to build on. The years in which many changes occur always create huge, fortuitous opportunities. Don't miss the 2008-2010 window of change.
About Stefan Swanepoel and his Real Estate Trend Reports:
The above is a snapshot of just a few important events in 2007. Numerous other companies and events will shape 2008 and years to come. For an extensive review of the top 10 events, top companies and top 10 people that shaped 2007, together with the Top 10 real estate trends determined to have an impact on 2008, read the 170-page Swanepoel TRENDS Report 2008. |
