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CEO’s Message: Are You Tracking the Storm?

Jim Harrison: MLSListings Inc CEO and President

Jim Harrison
President and CEO, MLSListings

Summer means many things to many folks in our society. For school teachers, it is time off from work and an opportunity to pursue other interests. For those in agriculture, it is a time to monitor crops as they grow to a successful harvest in the fall. For socialites, it is a time to switch wardrobes and join one’s friends in summer parties. For most, it would seem that summer represents some manner of ceasefire from the daily challenges of the day to day grind and an opportunity to spend a few months at a lower pace.

Such is the case for those in the real estate industry. The spring rush is over and the fall sprint is months away. It is time to take it easy. Indeed, based upon the atmosphere of the statewide and national meetings I have attended over the past month such seems to be the case. Moreover, one gets the sense that there is some manner of agreement within the industry that everyone will return to his or her village for the summer and that the disruptive battle will resume in the fall.

The fact is that something quite different is happening. This year the disruptive forces are not taking the summer off. In fact, it is possible that they are moving to take advantage of everyone else’s retreat to move even faster towards their goals and objectives of re-configuring our industry.

It is interesting to note that in this case, the industry’s literature is actually providing a warning that we should all be paying attention to. A number of the industry’s more seasoned observers are calling our attention to circumstances that should put us on notice that this summer is different. However, it would appear that by and large, the industry seems to be ignoring them.

Of the several examples that I am referring to there are three that deserve special attention. The first is a June 20, 2017, piece written by Mir Haque that appeared on the website venturebeat.com entitled Can Zillow “Uberize” the hundred billion dollar real estate brokerage? The second is a June 7, 2017, piece written by Brad Inman entitled From This Moment On, Nothing Will Be the Same in Real Estate. (An excellent follow-up to this piece was published on June 26). The third is an article entitled Amazon’s Grocery Ambitions Spell Big Trouble for Big Food Brands published in the Wall Street Journal on June 26

Taken together these three articles provide a vividly clear portrayal of what is currently happening within the real estate industry dynamic. More to the point they establish the fact that the time to counter these efforts has probably passed and that the smart money today will be on doing everything possible to co-exist with the new world that they are creating. None of these three presentations meet the relaxation requirements of that great summer novel read at the beach. In fact, they suggest that this might not be a good year to take the summer off.

The Haque article is a great read. In a mere five pages, the author provides an excellent review of exactly what Zillow has accomplished over the past ten months. Those who will want to throw up their arms and declare that they are tired of hearing about Zillow need not bother reading this piece. For them, it will be a historic tale that they probably missed. However, for those whose real estate careers and businesses lie before rather than behind them, it is an excellent way to get up to speed and contemplate an appropriate response plan.

Mr. Inman’s article skillfully points out that what Zillow has done on the buyers’ side of the house a group of well-funded investors backed by Wall Street are now doing to the Seller’s side. The motivator for this movement is the apparent fact that many consumers would rather buy their way out than suffer through the pain of listing and selling their property in the traditional “agent centric” manner. He points out that mere months after their introduction the instant offer, the iBuyer and the iBroker appear to be in the position to totally disrupt the traditional selling consumer/agent relationship. He suggests that seller leads will now be processed like buyer leads, that the entire home selling process will be re-engineered and “streamlined in a “seller focused” manner, and that brokers who wish to be competitive and perhaps relevant best undertake a significant redesign of their own operations. It is his sense that process efficiency will replace marketing as the “differentiator of choice.”

Lastly, the WSJ article on the Amazon and the food industry provides us with a glimpse into the mid term future of what we can expect as a direct result of the above disruptions. Real Estate folks reading this piece can gain a giant dose of reality by merely substituting the word “Zillow” for Amazon and “real estate brokerages” for grocers.

Of course, some in the real estate community will counter these thoughts by offering up reasons why the comparisons and analysis provided above do not constitute exact parallels to our industry’s current situation. This is the historical equivalent of suggesting that the outcome of the Battle of the Bulge in WWII would have been different had the allies had the benefits of the “Tiger” tank versus its lesser cousin the “Sherman.” At this point, it just doesn’t matter. The boat was probably always going to be missed. The one thing we can be sure of is that these folks will have neither analysis nor solutions of their own.

So, in conclusion, while our industry is, by and large, out fiddling this summer, Rome is experiencing some historic flames. If there ever was a treaty that counseled taking the summer off, that agreement has obviously been unilaterally canceled. You may be assured that MLSListings is not taking the summer off. We are working on meeting what promises to be the industry’s greatest challenge in recent history. We will be there for you.

 

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