Editor’s note: This Q&A is a part of Inman’s future-focused Roadmap to Recovery editorial project, which focuses on steps the industry should take to rebuild in the aftermath of the financial crisis. Click here for more details.
The following is an Inman News Q&A with Ira Luntz of ListingBook.com, a company that integrates with multiple listing service systems to offer tools that connect agents and their clients.
Q: How will the real estate industry be different when we recover from the current downturn?
A: Since the onset of the Internet, for the very first time, we have a unique intersection of significantly different market dynamics, access to real estate data — both real-time and historical (thank you, U.S. Department of Justice) — and an Internet-enabled, savvy consumer. More than ever the "Web survivors" will need to focus right now on providing a Web presence that is totally consumer-centric and focused on solutions, not just data.
Thus, I predict there will be a new Web landscape on the recovery side of the downturn, hopefully with the multiple listing service organizations at the center.
Q: How will the business model or business practices of the title, brokerage or lending industries change in the future?
A: Unfortunately, not much will change. Due to economic pressures, consolidation in the title companies should take place and they will shed the less-profitable technology components they acquired over the last eight years. Some regulatory oversight in lending practices will take place, such as the Freddie and Fannie "Code of Ethics" — but it is doubtful that the RESPA (Real Estate Settlement and Procedures Act) regulations will change.
Q: Will the industry be regulated differently in the future? If so, how?
A: Probably not.
Q: What must the industry do now to prepare for this new direction?
A: Real estate brokerage must reinvent itself. For too long, brokers have operated on slim margins, being squeezed by agents, fighting new Internet business models, and now coping with recession. It is not healthy for the industry and has forced brokers to live on affiliated business revenues. That fact alone may have been a contributor to the housing bubble. It is time for brokers to move to employee-based models.
Q: What technology trends will change the industry in the future?
A: Real estate is a local business best done locally. It is less a matter of technology and more a matter of reaching consumers and distribution. The MLSs have a fantastic opportunity today to become the hub and owners of local real estate business by embracing technology and putting forth rich content to worldwide consumers.
Q: What skills will the real estate agent of the future require?
A: About the same as today — only younger!
Q: How will real estate advertising dollars be spent in the future? How will real estate marketing be different?
A: Print is dead … long live the Internet! Advertising dollars will move rapidly to more targeted, Internet-based models, where effectiveness can be measured and highly targeted audiences will produce a great return on investment on advertising dollars.
Q: Will sales activity in your local housing market contract or expand in 2009? Will national sales activity contract or expand?
A: Sales activity will go up although median sale prices will go down. I live in Florida, where the trend will be accentuated. Foreclosures are rapidly turning into REOs (bank-owned homes) and lenders will need to dump properties at an accelerated rate in the first two quarters of 2009.
Q: What will drive the expansion or contraction?
A: More bank-owned properties.
Q: Will local home prices decrease, increase or remain stable in 2009? In 2010? Will national home prices fall, rise or remain flat in 2009? In 2010?
A: I see a decline in national home prices throughout 2009 averaging about 17-20 percent. Of course, this varies by region, with the worst hit still in California, Florida, Nevada and Arizona. I think prices will bottom out in most areas by the third quarter of 2009. The following year (2010) should see price stabilization but little in the way of price increases until inventory levels decline by at least 30 percent.
Ira Luntz is executive vice president for Listingbook LLC, an online service that integrates with multiple listing service systems and offers tools for agents to connect with clients.
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