Technology and innovation is the hot topic in real estate at the moment with the proliferation of ‘world-first’ innovations being declared. What we have learnt over 30 years of investing in technology and innovation (and with a team of four full-time IT programmers in this space) is that no matter how exciting a new product looks, it must pass the most basic tests: “How will it add value to the stakeholders? Will it be embraced and valued? Is it simple to understand and to apply?”
Technology is running at such a fast pace worldwide that Silicon Valley releases more than 20 game-changing innovations every week! Some have potential to disrupt traditional industries, yet impact positively on consumers.
A recent standout example that has disrupted a traditional industry is Uber. The real estate stampede to stake out first turf in the technology playground is under way. No one knows where this will end, but a real estate Uber is sure to emerge.
Real estate is already changing fast and the big questions on real estate agents' lips are, ‘what type of agent is likely to prevail? How will a real estate agent look in 2020?’.
In the meantime, the question on consumers' lips is, ‘who is going to make real estate moves easier, cheaper and less stressful?’. I seriously doubt many consumers would be too concerned whether real estate agents survive, providing their selling, buying or renting experience continues to improve.
The great news is that technology that can be applied to our industry is moving at a rapid pace on several fronts. I am heading to Silicon Valley in August with a select national contingent of realtors. We'll see first-hand what is emerging and find out first-hand about the next generation of technologies that could have application to the new world of real estate.
In the meantime, 40 of our team attended the recent AREC conference. It is so obvious the entire industry, on an international scale, is struggling to work out how our industry will look in 2020 and how to adapt fast enough to new technology capabilities and changing consumer needs. One thing is agreed: real estate agents must adapt or they will become extinct.
With 30 years of innovation credentials under our belt, this is by far the most exciting era ever for us. So how do we see 2020? Well, agents by 2020 will split into three categories.
Category one agent. Highly trained, technology equipped, with sophisticated data marketing. Global markets will be mainstream for these agents, while Asia will become a massive influence. This agent group will have unprecedented capabilities and the cost of selling with these agents will fall, while their profits will soar through efficiency gains.
Category two agent. These will be traditional agents suffering fast-diminishing resources, using high-cost, low-efficiency and increasingly ineffective marketing channels. They will be subject to heavy discounting and lack of ability to deliver results.
Category three agency. The new one. The true disrupters. Public, big-scale business, like REA Group, Domain, CoreLogic RP Data, Google, Facebook – but probably a name that doesn't exist today. There are likely to be big moves on real estate from non-traditional players. A big chunk of the existing real estate pie will go to this category.
Consumers? By 2020, consumers will demand more, pay less and be highly litigious. They will be impatient, unreasonable and have expectations that today's agents would consider ridiculous. Full-service agencies will attract the more reasonable consumers who require high levels of personal expert service.
Real estate spin will not wash. Facts, knowledge and results will prevail and be the only currency. Crowd-based referrals will become the differentiator.
These are explosively exciting times.