Friday Flash: In brief

The practice of getting to the point is woefully uncommon. Editing is everything. 

I learned this early in my career from Brad Inman, who insisted on “verbal economics” always.

How many hours, weeks, months, years have we wasted on keynote speeches, videos, reports, etc., that seem intellectually nourishing in the moment but leave us without even a resulting excreta as evidence of their having been consumed?

So… with that in mind, here’s my mercilessly brief take on what we should look for in the real estate industry this year:

The market’s gonna be strong. You know that. But that means brokers and agents will be heads-down stacking paper and largely too busy to pay attention to the change swirling around them. This is good if you are Zillow or CoStar, not so good for most everyone else. 

Compass will go public. Because they have successfully sold their “tech company” framing, their financials will be perceived as awesome by investors. Their valuation will soar. They will go back to buying brokerages and begin feeding shares to agents like Cheerios to park pigeons. Competitive mayhem in many large markets will result, the intensity of which will make the last few years look like a light scuffle. 

Nothing big will happen at RE/MAX or Keller Williams. These companies both hung their hat on the tech story a few years ago, and that has now largely played out. It’s back to recruiting basics.

Lots of real estate brokerages will get bought. Aside from whatever Compass does, this will be of little consequence for the industry at large. 

EXP is a runaway train and will continue to mushroom. The power of the downline compounds with every new agent. Their purchase of Success Enterprises was an under-noticed story. Rock on. 

Many more low-cost/low cap/flat-fee brokerages will launch to chase a little of what EXP grabbed hold of. These efforts usually plateau into franchising after a while (think JPAR and Realty One Group), which saps some of these models’ power, but that won’t stop new entrants from taking a shot. 

The competing pressures at once forcing listings onto the MLS (Clear Cooperation) and sowing the seeds of MLS entropy (DOJ settlement) will produce a rising anxiety. This will result in a dramatic acceleration of MLS consolidation. 

CoStar will set up shop on and compartmentalize the BPP on the Homesnap domain. It’s possible they buy from Dominion, which comes with its own set of MLS agreements. In any event, CoStar is going to do some raucous stuff that will impact, directly or indirectly, almost everything above. 

iBuying will pull back onto the highway after being run into the ditch by Covid in 2020. I doubt iBuyer share at a national level will impact many agents’ day-to-day lives, but those agents will nonetheless be having the “iBuyer conversation” with sellers with increasing frequency as a sales tactic. This will, ironically, lay the long-term tracks for iBuying much the same way the “portals” benefitted from millions of living room conversations about syndication a decade ago. 

OK, that last one wasn’t so brief, but I tried. 

We’re off and running, folks. Hold on tight!

Have a good weekend.