The Inman Blueprint
for winning in 2023
Reflections after Inman Connect Las Vegas and CEO Connect
There has never been a year in real estate quite like the last twelve months. Thanks to rising mortgage rates, the lingering effects of the pandemic, and a persistent lack of inventory, the housing market has been brutal for brokers and consumers alike.At the same time, home prices are high and the people who have listings are able to sell them. And on top of that, technology continues to reshape the way people find, explore and buy homes. Tools like ChatGPT are only months old, but have already swept the world.All of that is to say we haven't had a crash, but it's also not exactly high times for everyone in the housing business. It's a period of change, of some uncertainty, and of anticipation about the future.Against that backdrop, a gathering of industry leaders recently convened during Inman Connect Las Vegas. The gathering, CEO Connect, included executives from companies big and small, and from across many different housing verticals. And both during and after the event, Inman asked participants for their insights on what this present moment means for the industry.What follows are industry leaders' most salient points — shared on stage at Connect and CEO Connect, via email, and in group discussions — regarding the market, bombshell commission lawsuits and more.
What's going on with the market?
There's no question that the market over the last year has been challenging. But where it goes from here is another question entirely. Will rates go down? Will inventory ever actually bounce back?In that context, Inman's first questions for real estate leaders were straight forward: What's happening with the market? Where is the recovery? And how can brokers and agents take advantage of conditions as they swing in a new direction?
The market
Paul Hurst
Chief innovation officer, First American
Unfortunately what's good for the broader economy — a soft landing — is bad for real estate because it means rates are going to be higher for longer. Barring an abrupt change… 2024 and 2025 are going to see marginal increases in transaction volume vs the low point of 2023.
The market
James Dwiggins
CEO, NextHome Inc.
Not to be over dramatic but this is about having the grit and focus to get to February of 2024. This isn't a time to worry about timing. This is a time to get to work, work harder and smarter and focus on capturing market share as companies and agents drop out of the business.
The market
Damian Eales
CEO, Move Inc
I’m optimistic — cycles turn and this one will too. Green shoots are evident, including lowering core inflation, recent growth in mortgage applications, and still strong buyer demand that’s being reflected in annual new home sales growth.
THE MARKET
Ginger Wilcox
President, Better Homes & Gardens Real Estate
People ultimately do need to make moves and we’ve started seeing some of that happening throughout the markets.
The market
Chris Heller
President, OJO
I don’t see anything in the near term that will significantly increase supply and/or decrease demand.
The market
Wendy Papasan
CEO, Papasan Properties Group
I don't think it's possible to time the market, so our agents will continue to focus on doubling down on lead generation and scripting around lead conversion, which is where our pain points are right now.
The Market
Russ Cofano
CEO, Collabra Technology
My gut tells me that agents should be doing all they can to cultivate relationships that will be ready to transact sometime in 2024 as the balance of 2023 will likely be more of the same…few listings, low inventory and extreme pressure on buyers to fight for what little there is on the market.
The Market
Natalie Hamrick
Executive Vice President, Christie’s International Real Estate
Now is the time for agents to invest in themselves by focusing on relationships and gaining market share, so that when the market recovers, they will come back more successfully than their peers.
The market
Thad Wong
Co-CEO, @properties
Now is the best time to grow…. Now is the time to severely focus on all of your competition and gain share.
The Market
Deborah Shipley
Vice President, REColorado
We are currently in the trough phase of the economic cycle as far as housing is concerned. It is difficult to say when the recovery will begin – lower interest rates, more inventory – but it is important for agents to keep prepared during all market conditions.
The Market
Alex Toth
Head of business development, Opendoor
We’re entering the fall and winter months, so we’re typically going to see a shift to a buyer’s market and a potential slow down overall. And if interest rates remain high and sellers stay on the sidelines with locked lower interest rates, we may see even less inventory become available. With an optimistic viewpoint, more consumers may begin accepting higher interest rates as the "new normal" and proceed with moving before the end of the year to avoid the holiday season.
the market
Sarita Dua
Owner-Operator, The AskSarita Team
There isn’t going to be one single event that jolts the market back to where we were.
The Market
Jordan Levine
Senior VP and chief economist, California Association of Realtors
The current economic cycle remains in expansion mode.... As for housing, the bottom may be 9 months behind us.
THE MARKET
Andrew Binkley
President, Constellation1
Inventory is lower this year as we’ve seen, but the market is stabilizing and housing starts are continuing. In slower and recovering markets, this is often the time for agents and brokers to assess their foundation, what’s working and what’s not? Reinvesting in what’s working, reallocating investment in new tools that will help with future growth, and retiring tools and processes that are no longer serving their business.
WHAT WILL HAPPEN WITH THE COMMISSION LAWSUITS?
Few things have roiled the real estate industry more in recent years than the so-called bombshell commission lawsuits.There are several different legal cases, but the basic questions the cases raise have to do with the way agents — and specifically those representing buyers — get paid. So Inman asked industry leaders how big a deal these cases are, and if they're likely to topple the status quo.
The commission lawsuits
Russ Cofano
CEO, Collabora Technology
Experience and competency will now matter in terms of compensation rates for both seller and buyer agents and it will prove more difficult for inexperienced agents to gain market share which will have significant impact on the number of agents in the business and brokerage and team models and economics.
The commission lawsuits
Molly McKinley
Co-founder and managing partner,
Redtail Creative
I believe the impact of the commission lawsuits will be significant. Savvy, service-driven buyers agents could productize packages to assist buyers in the home purchase process. A decoupling of commission from percentage of the sales price affords an opportunity to price their offering based on the needs of the consumer and the stage of life they are in.
The commission lawsuits
James Dwiggins
CEO, NextHome Inc.
I think compensation in the MLS will ultimately go away whether through these suits, or government involvement through the FTC. Buyers agents will need to articulate value differently than they do today, and will require buyers to sign a buyer broker agreement as is already required in 12 states. [...] In addition, buyers' agent compensation will have the ability to be financed through the loan with changes enacted by Fannie and Freddie.
The commission lawsuits
Eileen Romito
Vice president of Sales and Operations, Zenlist
An industry loss in these suits will force the bar to be raised. Buyers agents will compete with each other on the overall experience and outcomes they provide to their clients.
The commission lawsuits
Omer Granot
CEO, LocalizeOS.com
There will be a new equilibrium, though I'm not sure the overall will change. It will definitely force the big players to improve where there's an opportunity.
The commission lawsuits
Natalie Hamrick
Executive Vice President, Christie’s International Real Estate
We think the current system offers the most efficient environment for buyers’ agents and sellers’ agents to work together for their clients, while giving homebuyers the greatest access to the professional services of a Realtor. But the lawsuit is a reminder to everyone in the industry to make sure agents can communicate their value proposition and why it’s important to use a real estate agent when looking for a home.
How will artificial intelligence reshape real estate?
Artificial intelligence has been poking around the edge of the real estate industry for years in the form of things like chatbots and algorithmic property recommendations. But interest in the topic exploded late last year when a slew of just-launched tools broke new ground with conversational text and realistic imaging.It remains to be seen just how big a deal AI will ultimately be for the real estate business. But Inman asked industry leaders for their takes, and for their visions of how this cutting edge tech might change the lives of brokers and agents.
The Impact of AI
Sue Yannaccone
President and CEO, Anywhere Brands
Technology in any form is an enabler. It augments the relationship. It provides a greater connection… I don’t think of it as replacing, but amplifying performance, and streamlining and creating efficiencies.
The Impact of AI
Brad Bjelke
CEO, UtahRealEstate.com
The next 2 years will see visionaries emerge that will use this technology to solve pain points in the real estate industry. The dreamers will have enormous possibilities, and those that refuse to embrace these changes will miss out on the vast opportunities that will arise.
The Impact of AI
Carolyn Merchant
Chief Marketing Officer, eXp Realty
AI, used correctly, will give brokerages and agents a key advantage by enabling increased productivity, personalization and targeting. It's not AI that will win, but the agents and brokerages who use AI that will win.
The Impact of AI
Damian EalesCEO, Move Inc.
Generative AI is set to transform the industry in extraordinary ways.
The Impact of AI
Omer Granot
CEO, LocalizeOS.com
Agents and brokers who lean into it will experience efficiency at a yet unseen scale and will lead the next decade as the clear winners. Those who won't will be left behind.
The Impact of AI
Paul Hurst
Chief innovation officer, First American
My hope is that AI is the technology bridge that enables us to finally automate the rote manual tasks in the transaction, so that agents, LO's and EO's can focus on the emotional aspects of the home buying and selling journey!
The Impact of AI
Errol Samuelson
Chief Industry Development Office, Zillow
I think we are on the verge of a revolution that is like the invention of the steam engine…. This is a once in a 200 years kind of thing.
The Impact of AI
Molly McKinley
Co-founder and managing partner,
Redtail Creative
As AI becomes even more pervasive, the need for community will also increase as we will crave the nostalgia of human connection and true conversation. People who become over reliant on using AI, could lose their competitive edge and eventually grow stagnant and dull.
The Impact of AI
Lisa Larson
Managing Director for North America, Restb.ai
Artificial Intelligence, and more specifically Generative AI, has the potential to revolutionize the user experience in the real estate industry by introducing personalized, immersive and efficient interactions.
The Impact of AI
John Garner
Co-founder and CEO, Freemodel
AI will allow agents and their service providers to effectively estimate the increase in home value, project costs and net homeowner profit from doing pre-sales renovations.
The Impact of AI
Jennifer Elia
Founder and CEO, BryteLearn
AI is going to take over every. single. process. Companies that dominate in the future are those that differentiate themselves by the one thing AI will never replace: humans.
The Impact of AI
Clelia Peters
Managing Partner, Era Ventures
Until AI can enjoy the refreshing taste of a cold drink of water on a hot day, or the joy that I get from holding the warm body of my child, or something refined, we can do things as humans the machines cannot do.
The Impact of AI
Rich Hennessey
CEO, HouseAmp
We will see a massive amount of increased productivity. The risk is losing the human touch that is important.
The Impact of AI
James Dwiggins
CEO, NextHome Inc.
Someday every agent will have a real estate assistant in their pocket to help them with a multitude of tasks via AI. But it will take longer than we think and will feel like it shows up suddenly. In the end though it will augment the agnet and their relationship with their clients not replace it.
The future for agents and
their clients
To wrap up, we're trying to synthesize everything: AI, the market, the commission lawsuits, and the state of the industry generally. Are we on the verge of major change, for instance, or are we looking down the barrel of more status quo? Will real estate agents go extinct? Will consumers change their preferences?To get a sense of what comes next and how folks are feeling, we looked at what leaders had to say about the future of agent life — and what it means for consumers. And while there are a lot of unknowns, of course, there is at least no question that we'll continue to live in interesting times.
What comes next
Tamir Poleg
Founder and CEO, The Real Brokerage
The reality is, all [people] want is a home. They don’t want a mortgage, a title company, they want a home. That’s what we need to deliver, a home, not a process that’s broken.
What comes next
Errol Samuelson
Chief Industry Development Office, Zillow
More people are using agents now post pandemic than pre pandemic…. I think on the buy side part of it has to do with the inventory shortage. And I think sellers increasingly realize they have lives to live and they’re going to hire a professional.
What comes next
Guy Gal
CEO, Side
In a world where people look the same, act the same, say the same, present the same, are the same color, are affiliated with the same brand — it’s the person who is different that stands out and gets the attention. And whoever gets the attention ultimately gets the opportunity.
What comes next
Sue Yannaccone
President and CEO, Anywhere Brands
I think the brokerage model of the future is a model where we continue to drive significant value to our agents and customers. I believe strongly in the brokerage model
What comes next
Ben Hess
Managing partner, Recruiting Insight
Now that transaction volume has subsided, professional agents and high-performing teams will capture a higher percentage of the smaller pie. This trend will continue for the next few years, and the firms with the best agents (not the most agents) will gain market share.
What comes next
Mike DelPrete
Real estate analyst
Compete where you can win. Tech can be a differentiator, maybe location too. Find that and throw your chips behind it.
INMAN SELECT
Become a member of Inman Select.
For independent, reliable news coverage at the forefront of the industry plus essential how-to advice for growing your business, join Inman Select today.
© 2023 Inman. All rights reserved.