SAN FRANCISCO–Home listings used to be the real estate equivalent of the “black box,” said Bob Hale, president and CEO of the Houston Association of Realtors. And Realtors were the only ones who held the keys.
Things have changed. There is more competition these days, and there is a more pressing need for Realtors and their associations to keep up with trends and to work more efficiently, said Hale, who spoke on a panel today at Inman News‘ Real Estate Connect 2004 conference in San Francisco. The panel, “The progressive Realtor association: What does it take to innovate?” included discussions ranging from new agents to industry nightmares.
“The consumer often has more information in their hands than the Realtor does at their first meeting,” said Hale, who leads one of the largest local associations in the nation. And the challenge is in ensuring that consumers realize the value that Realtors bring to the table, he said. The Houston association has about 18,000 members, making it the second-largest association in the country behind New York’s Long Island Board of Realtors.
“You can’t stop new business models and you shouldn’t try to stop them,” said Hale. Instead, he said, it’s better to understand the new models and to learn from them. But the rank-and-file Realtors don’t always have a broad perspective on industry-changing trends, he said. “They are totally oblivious, for the most part, as to what’s happening,” he said, and the forces that are “totally changing this industry.”
Industry competition is not only a matter of new business models vs. traditional business models, panelists said. There are battle lines forming among multiple listing services of different sizes, and between brokers and their agents.
“We do have brokerage firms at odds, quite frequently, with the sales community,” said Joel Singer, executive vice president for the California Association of Realtors.
And, Singer said, “We need to make sure as an association and as a business we reflect the business (profile) of our members,” Singer said. “We hear it from our largest brokers, ‘My markets have changed and your structure hasn’t.'”
Bill Malkasian, president of the Wisconsin Association of Realtors, said that the rapidly growing population of Realtors is a good thing for the industry. “I have more faith in the ones coming in,” he said, because of the energy and skills they are bringing to the market. “There’s going to be a major turnover,” he said, as a large number of Realtors are approaching retirement age.
And responding to a question about apathy within the industry, Malkasian said that Realtors these days may not be as visible at association luncheons or elections, but they are in more contact with their local association than ever before. New Realtors, he said, “want solid, basic business services.”
Singer said he is confident about the newcomers, too. He said that on paper, the latest group of agents “is the strongest we’ve seen,” and the industry “is as competitive as I’ve seen.” In California, new agents are a more diverse bunch than their predecessors, Singer said, and they are beginning to mirror the home buyers and home sellers who they represent. Competition and house prices are driving down profit margins, and efficiency is key in remaining competitive, he said.
Panelists noted that even as the number of Realtors has swelled, the number of associations has decreased in some states through mergers. Hale said such mergers “just make sense–you get economies of scale,” while Singer said to expect even more consolidations among local associations as the housing market begins to turn. He said he expects a “soft landing” rather than a hard fall for the housing market in California, though housing affordability is a growing worry.
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Commenting on the real estate presence of Barry Diller, CEO of InterActiveCorp, Hale said, “I don’t know that Barry Diller is in the real estate business.” The LendingTree model is more about capturing leads from online consumers and selling those to Realtors, he said. And it’s important for people in the industry to be aware of LendingTree and its aims, he said. He said there are more than 1 million Realtors in the country, and he joked, “I don’t know that any of them is lost. They’re pretty easy to find.” But models such as LendingTree represent “a whole new world” of change and should not be overlooked, he added.
Malkasian said Realtors don’t know enough about Diller, a keynote speaker at the Connect conference. “They don’t know that much about him. They don’t understand the business model of really what he’s trying to do. They need to learn more. They’ll think it’s some law they need to pass…to make it go away.”
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