Is the real estate search war starting to heat up again? Answer = I hope so.
Inman’s Real Estate Connect SF 2010 has come and gone.
It was perhaps the best Inman show ever, thanks to new Inman CEO Tim Smith and his team. The event has never been produced more thoughtfully.
This was my 13th Connect SF event. This year, more than ever, I enjoyed seeing so many people who have, like me, hung around this industry through boom, bust, success, failure and years of work in a business environment that might charitably be called unique.
All because real estate just really matters.
It was a great week.
Below I’ve shared just a few of the things I took away from the event.
The online real estate category is overdue for realignment
The fact that it’s hard to make an online consumer play work in real estate has been plainly obvious for years. There were only three big Web success stories to come out of the first Internet boom (LendingTree, HomeGain and, for a time, HomeStore). The second wave of online real estate innovation â€“ that which commenced in 2005 â€“ is now overripe. Investors are eyeing the exit doors anxiously. No one’s killing it on revenue. The model of selling ads on top of listings promoted for free isn’t going to support 8-10 large Web properties much longer.
We’re going to see consolidation in the coming year. Some thinning of the herd.
The Zillow/Yahoo! Real Estate partnership is just the beginning. I initially dismissed this deal as a product of Yahoo’s effort to unload non-core properties to partners. It was this, but it’s also more. It begins the climactic battle between Zillow, Trulia, Move.com and a handful of others to write the denouement to online real estate’s Web 2.0 era.
I don’t know who wins this battle, but I think we will see casualties in the coming year.
MLS is where the action is
I realize this is like saying that the future of American fashion can be found at a Rotary luncheon. But here’s the thing: the MLS isn’t sexy, but at this point it’s just about the only thing that matters if you care about the future of real estate.
I have long thought of the MLS as the dorky kid on the schoolyard the cool kids pick on one day then sweet talk the next for help with their homework.
And now, after the internecine discounter battles, after the DOJ, after the RPR freak-out, everything â€“ from the future of online real estate innovation to the real estate compensation model â€“ hinges on the ability of those dorky kids to stay out on the yard.
This really hit home for me during the MLS session I moderated.
Mike Wurzer, an MLS software vendor, rejected the notion that the MLS system is broken, arguing that what we have now is the rational product of a free marketplace.
Joel Singer, the CEO of the California Association of Realtors, who spent the past three years trying to change what he perceives to be a flawed system only to fall short of that goal, made a gutsy and passionate argument that the MLS is inefficient to the point of jeopardizing the long term interests of practitioners.
But it was Simon Baker, an outsider, who crystallized the discussion. As someone familiar with real estate around the world, he pointed out that the American MLS system’s cooperative dynamic holds together a compensation structure anomalous in its plenitude and potential for conflict.
It was a moment that took the discussion just far enough outside the usual lines to make it clear what’s really at stake in the seemingly esoteric debate about the future of MLS.
The brokerage discussion is finally cleansed of political poison
The discussion about innovation and disruption in real estate brokerage reached its nadir on January 10, 2007.
It was on this date that Allan Dalton, who was then President of Realtor.com, “debated” Glenn Kelman of Redfin at Real Estate Connect New York. It was a showcase of real estate’s most regressive, insecure and irrational tendencies.
Dalton won the battle on stage but lost a lot of hearts and minds.
That was a good thing, because when Kelman appeared on stage last week in a discussion with Greg Rand of Better Homes and Gardens Rand Realty, he was able to participate in a useful debate about the brokerage business model.
Kelman and Rand talked about operational performance. Agent productivity. And the core value a brokerage provides. Imagine that!
There were some interesting moments. Rand argued that brokerage companies must purge their offices of unproductive agents while failing to explain the messed up incentives that keep almost all of them, including his own, in place. Kelman talked about customer service and trust while having to acknowledge that he hired a Russian spy.
The next day, Sherry Chris, CEO of Better Homes and Gardens Real Estate, a Realogy brand, stood on stage to highlight a new website she had built to index and explore just the sort of small, innovative brokerages the industry used to demonize.
These were moments of leadership and sanity.
If you want to innovate in search, forget almost everything but mobile
Yes, you and I both know it by now: “Mobile is huge!”
I won’t belabor that point. But I will share one observation: As a tech executive demoed his company’s latest mobile app (it’s fantastic, but still weeks from release) it hit me just how little time it took for the real estate search experience on the handset to become better than that on the desktop Web.
Think about it: How much difference is there, really, between the Realtor.com of 2000 and the Realtor.com of 2010? Aside from map mashups and some data overlays, the experience is basically the same.
But the mobile experience just keeps getting better, faster, than anything we ever saw on the big screen. I don’t think that’s going to change. I think it’s going to keep accelerating.
Mobile is “huge,” but it’s also going to be the platform on which the future of online real estate will be written.
More to come
I took a lot more from last week, but I’m over 1,000 words now and you’re probably fading. I’ll be working through other thoughts from Inman right here in the coming weeks.
If you were at the event, what did you come home thinking about?
Disclosures: I used to be president of Inman News and they are also a 1000watt Consulting client; Better Homes and Gardens Real Estate is a 1000watt Consulting client.
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