Real estate industry insights, hopes and predictions for the year ahead: Part 1

Editor’s note: This is the first of a three-part series in which real estate industry leaders share their insights, hopes and predictions for the year ahead. Part 1 is focused on issues affecting multiple listing services, Realtor associations and real estate brokerages.

Marty Frame, president, Realtors Property Resource (RPR)

What are the top items on your real estate wish list for 2014?

• Focus on innovation in the transaction. So much of our energy as an industry is directed towards customer acquisition, but despite the ubiquity of real estate information online, the business is still driven overwhelmingly by referrals. Meanwhile, opportunities abound to increase the speed and reduce the cost to deliver services during the transaction, automate decisioning, and expose products and pricing through the agent to the consumer.
• Better mobile apps for the professional. For all of the elegant, even beautiful, mobile apps for the consumer, there are very few utilities for the real estate practitioner that are anywhere nearly as nice. Our devices have capabilities that professionals need to do their jobs — really good GPS, cameras, microphones, accelerometers — and our industry has a lot of room to grow in terms of design and usability as well.
• Smaller data. “Big” data — intelligent, inferential algorithms traversing troves of digital artifacts, trying to find meaning — has captured our imagination, but our industry has such a unique and expansive presence at the “point of sale” — at ground level — there are many opportunities to develop a unique and vast catalog of facts and observations, and put that to work to develop a better customer experience.

What do you expect to be the top trends and hottest issues in real estate in 2014?

Someone, with a lot of money — it might be smart money, or it might be dumb money — is going to try to parachute into the real estate industry this year. This isn’t a particularly novel prediction, given past history and the economic cycle that we’re in right now. But it is always interesting to watch and learn from how it plays out.

Bob Hale, president and CEO, Houston Association of Realtors

 

What are the top items on your real estate wish list for 2014?

1. Maintain HAR.com as the No. 1 real estate website in Houston.

2. Develop and offer a virtual office website (VOW) product for all HAR brokers.

3. Develop and offer an agent/broker-branded mobile app to HAR members.

4. Survey consumers and educate members about consumer expectation and how to meet them.

 What do you expect to be the top trends and hottest issues in real estate in 2014?

1. The Realty Alliance will continue its efforts to limit services an MLS may offer its members.

2. The portals like Zillow and Trulia will fill the void by offering more services to members.

3. Gen Y consumers with a do-it-yourself mentality will increasingly seek limited brokerage services.

4. Agent ratings will become even more ubiquitous.

Russ Bergeron, CEO, Midwest Real Estate Data LLC (MRED):

 

What do you expect to be the top trends and hottest issues in real estate in 2014?

Big independents (like The Realty Alliance and Leading RE Companies) plus some major franchises may join forces and pool their listings to:

• Create their own public-facing listing portal (even though their agents will continue to use back-alley sites to feed the other big portals).
• Create a mobile app.
• Create a product storefront through which to sell software to their agents.
• Might see attempts at broker MLSs — probably calling them listing clubs, but most will fail if agents are required to make a sudden change.
• They may also pull listings out of IDX and VOWs.

You might see a couple big independents merge. You will continue to see Berkshire Hathaway cutting a swath across the country. Realogy/NRT will get off the bench and start a buying spree.

[Among MLSs, I] hope to finally see some progress in creating larger MLS databases that serve multiple MLSs through different front ends.

We will continue to see MLSs and brokers quarreling over who is their respective customer, and no one wins except outside third parties.

Mobile delivery of MLS services finally get around to some real responsive design techniques.

[My market predictions are for] interest rates to rise to between 5.5 and 5.75 percent, with gradual inventory increases to come back to “old normal.” Not in every market.

Prices will adjust due to the inventory normalization. Again, this will vary from market to market.

Craig Cheatham, president and CEO, The Realty Alliance

 

What are the top items on your real estate wish list for 2014?

1. Rising labor force participation rate.

2. Continued gradual growth in property values and home equity.

3. Legislative fix for the “3 percent cap” feature of Dodd-Frank that discriminates against mortgage and title companies affiliated with real estate firms and denies consumers the savings and convenience they have enjoyed for years with “one-stop shopping.”

4. Growing consumer confidence.

5. Successful launch of broad-based, industry initiative to address real estate data/content issues.

6. Consumers returning to brokerages as the source when seeking the most accurate, comprehensive real estate information, and for the best interpretation of that data.

7. MLSs working with brokers to “reset” to locally appropriate governance and product/service mix with opt-out options and passage of a sensible national MLS policy free of “tying” with a decision-making body made up of active brokers.

8. Adequate inventory levels.

9. Ample, available credit for a broad spectrum of homebuyers.

10. Tax reform that boosts the real estate industry, not harms it.

What are your top New Year’s resolutions for real estate in 2014?

1. Restore the agent/broker to his or her rightful place in the consumer’s eye as the best and most appropriate source for real estate information and guidance … not an app or site.

2. Restore the mission and activities of the organizations founded to serve industry practitioners to those that serve and support industry practitioners — not compete with them, take business decisions away from them, use their money for purposes they oppose, pursue unrelated goals/projects, etc.

3. Restore control of real estate data to the broker, where the responsibility lies.

4. Streamline the network of boards/associations and MLSs for maximum efficiency of process and cost for agents.

5. Implement additional levels of technology to streamline and simplify the real property transaction for the public.

What do you expect to be the top trends and hottest issues in real estate in 2014?

1. Mortgage interest deduction under serious threat (really), along with other issues important to real estate, during the tax reform effort of 2014, setting the stage for passage in some form after Congress is safely beyond the 2014 midterm elections. (Unless Senate Finance Committee Chairman Max Baucus is appointed ambassador to China, then tax reform may be dead altogether.)

2. Top real estate Web portals struggle to meet investor expectations, causing significant shake-ups/changes.

3. Launch of industry owned and controlled data solution organization starts ripple effect, giving agents everywhere hope of saving wasted money, time and effort with inefficient systems/organizations.

4. Sales rise in anticipation of higher interest rates, and thanks to growing consumer confidence, lower unemployment and rising property values.

5. Continued consolidation of firms/brands that retires familiar industry names.

Dale Stinton, CEO, National Association of Realtors

 

What are the top items on your real estate wish list for 2014?

At the top of my real estate wish list for 2014 is strengthening and broadening the housing recovery, which starts with a return to sensible lending standards. Consumers must have access to affordable mortgage products so they can attain homeownership. We continue to hear from our Realtor members across the country that tight credit restrictions are preventing qualified buyers from becoming homeowners and making it tougher for some homeowners to sell their homes.

Another real estate wish for 2014 is a greater inventory of homes for sale; inventory levels have shifted dramatically during the past five years — from a record high of 11.9 months in July 2010 to a recent low of 4.3 months in January 2013. While inventories have started to increase, Realtors are reporting that the reduced supply is holding back sales and pushing up home prices. Greater new-home construction will also help relieve inventory pressures and moderate price gains.

What are your top New Year’s resolutions for real estate in 2014?

On my agenda for next year is identifying innovative technologies and resources to help Realtors stay ahead and succeed in business. We will continue to do that by investing in game-changing partnerships that will help bring our members new tools to facilitate transactions, and by giving Realtors a competitive edge through greater market information and resources — most specifically through predictive analytics. That’s why we’ve put resources towards NAR’s new predictive analytics group, which is leading the examination and analysis of a variety of data sets with plans to develop services and resources that bring value to our members.

Another goal is to continue to build a meaningful, long-term relationship between the Realtor family and America’s 75 million homeowners. We aim to leverage the common interests of Realtors and homeowners to increase our advocacy efforts and to expand Realtors’ role from the buy-and-sell transaction to the life cycle of homeownership.

What do you expect to be the top trends and hottest issues in real estate in 2014?

While the national housing market is showing signs of a recovery, some critical housing industry issues must be addressed before a full recovery can take place. One thing I expect to see is that regulatory uncertainty will continue to impact the cost and availability of mortgage credit in 2014 and that lawmakers will continue the discussions about federal tax and mortgage finance market reform.

Other hot topics next year will be mortgage interest rates and how high they might go; the Affordable Care Act and its impact on agents and small businesses; and the control of listing data and how agents, brokers and MLSs share property and market data with third-parties and aggregators. The midterm elections will also be the topic of much discussion next year, and many of our members will be participating in the political process to ensure that the Realtor’s point of view is heard.

Despite some challenges ahead, I’m feeling very confident and optimistic about the future for our Realtor members and real estate markets, and I believe that tremendous opportunities remain available to real estate buyers, sellers and investors in 2014.

Brian Larson and Mitchell Skinner, attorneys at Larson/Sobotka PLLC

What are the top items on your real estate wish list for 2014?

Fix the unnecessary conflict — there needs to be REASONED work on friction between MLSs and brokers. There is no reason for the aggressive posturing we’ve been seeing. Hopefully there is acceptance that everyone loses if current systems are intentionally fractured.

Getting realistic about cooperation — Realistic expectations of the benefits of group legal enforcement (and pragmatic understanding of its drawbacks from a business standpoint). Groups with a narrowly focused mission (and similarly narrow costs) will deliver the most value.

Technological leaps: (1) potential leveraging of companies outside the industry — Amazon cloud services, Google, Microsoft; (2) “plug and play” software; and (3) move from RETS to API.

What do you expect to be the top trends and hottest issues in real estate in 2014?

The conflict between MLSs and associations of large brokerages will be a hot issue. It might get worse before it gets better.

Further realization and acceptance of (and more action based on) the fact that MLSs are the premier source of data in the real estate industry could include: more MLSs looking at direct syndication; drastic changes in (some) syndicators’ business practices; fair/reasoned negotiation by (some) aggregators with MLSs; use of badges to indicate data is from MLS, etc.

Similarly, distinctions among Trulia, Zillow and realtor.com may become more apparent to the industry.

There will be more MLS system conversions.

Saul Klein, industry principal, Point 2

What are the top items on your real estate wish list for 2014?

• Greater understanding by more people of the issues and value surrounding MLS data and information.
• More MLS consumer portals in those markets where they make sense.
• More MLSs syndicating through Point2 under our new data distribution contracts.

What are your top New Year’s resolutions for real estate in 2014?

• Bring an alternative to the current syndication (data distribution) rules.
• Work to give every MLS and association that so desires an opportunity to have a consumer portal their brokers, agents and the public will love, and that will generate revenue for the organizations.
• Continue to socialize the concept of protecting, controlling and monetizing MLS data.

What do you expect to be the top trends and hottest issues in real estate in 2014?

• Syndication/distribution of MLS data
• MLS data licensing
• MLS and association public search portals
• Copyright
• Off-MLS offerings
• Agent ratings
• Public display of sold data

David Charron, president and CEO, Metropolitan Regional Information Systems Inc. (MRIS)

 

What are the top items on your real estate wish list for 2014?

Increased inventory will solve many of the issues in the Mid-Atlantic region. Supply and demand still rules! Rising interest rates will temper prices and inventories will rise. As a result, the market will normalize.

What are your top New Year’s resolutions for real estate in 2014?

Continued focus on and leverage of core strengths. It’s easy to get distracted by issues outside of our control or seduced by “shiny objects” we think we can easily acquire/merge into existing operations.

What do you expect to be the top trends and hottest issues in real estate in 2014?

Analytics: The industry is awash with data. There is an incredible opportunity to turn this data into actionable information for real estate professionals.

Integration: MLSs provide extensive capabilities to their customers but not always in a seamless manner. Work-flow integration is essential regardless of whether the tool is developed internally or via a third party.

Collaboration: Search is important, but cannot stand on its own. Creating a convenient space for real estate professionals and their customers to discuss and debate housing-related issues should become a core function of the MLS. This capability will then logically accrue to all MLS participants.

Brokers flexing their muscle: It will happen, albeit incrementally. Brokers will weigh in even more forcefully on issues like syndication and third-party monetization of the content. Also look for some early efforts where brands that traditionally have been polar opposites test the waters with various forms of “coopetition.”

NAR will get its groove back: NAR will make great strides in advocacy and housing policy. Importantly, it will also begin to back away from those issues that consume far too much rhetoric, energy and resources resulting in marginal returns. Granted, this may be a reach, but it ties to the resolution for 2014 stated above.

James Harrison, president and CEO, MLSListings Inc

 

What are the top items on your real estate wish list for 2014?

My first wish would be a miraculous surge in inventory so that brokers, agents, buyers, sellers and on-the-fence browsers have more opportunity for successful transactions — and, of course, that they find those homes on MLSListings.com.

What are your top New Year’s resolutions for real estate in 2014?

1. Raising the bar for the performance of our service by facilitating new tools and services that improve consumer engagement for our brokers and agents.

2. Facilitating greater broker integration into the governance of the MLS.

3. Continuing to support and advocate for better data integration of the multiple MLSs in Northern California to improve and simplify the MLS experience in Northern California for all brokers and agents.

4. Delivering solutions and opportunities for brokers to integrate their back-office solutions into our MLS for seamless data integration.

5. Adopting and delivering RESO standards as they become available.

6. Evolving our use of Salesforce.com for better back-office efficiencies.

7. Updating our UX on all our applications.

8. Advocating for, developing, and implementing a syndication utility which improves the brokers control over their data and addresses the quality issues at the portal level.

I believe that we should resolve to find efficiencies. The redundancy of services and technology in our business should be addressed nationwide. There are natural ways for those of us who provide multiple listing services to address the needs of brokers and agents limiting these redundancies; at the same time, there are emerging technologies and services that not all MLSs are currently providing that we could and should add to our standards of practice.

We are making progress in the area of standards of practice with RESO, but I believe our collective resolution should be to offer standards for the professionals who need consistency in our services.

What do you expect to be the top trends and hottest issues in real estate in 2014?

I expect 2014 to show us continued modest growth in market activity and that will require those of us who provide products and services to brokers and agents to bring them more relevant tools, increased consumer engagement and empowerment.

I believe that creating broker-to-consumer connections will be the backbone of emerging technology and services across a variety of MLS and vendor channels in 2014.

Ben Graboske, senior vice president of real estate and financial services, CoreLogic

What are the top items on your real estate wish list for 2014?

• Modest home price appreciation.
• Extension of affordable mortgages to those without pristine credit.
• 2o percent-plus home sales volume increase.

What are your top New Year’s resolutions for real estate in 2014?

• Empower real estate agents with more rich content (data, mashups, imagery) through mobile and Web technology to create a better buyer and seller experience while enhancing the agent’s brand.
• Help create value among real estate brokers, agents and mortgage lenders.

What do you expect to be the top trends and hottest issues in real estate in 2014?

• Further mobile enablement of the homebuying and selling lifecycle for agent and consumer.
• Online transaction management, digital mortgages and digital recordings.
• Drone notaries and drone-driven closing process (I just threw this one in for fun!).

Michael Audet, founding partner, WAV Group

What are the top items on your real estate wish list for 2014?

That the Prolist Multiple Listing Service I have been helping to roll out in Brazil continues its successful growth and becomes the “gold standard” for real estate transactions in Brazil, and that this model serves as a catalyst for other countries in South America and beyond to adopt the U.S. MLS model, the best real estate system in the world! I have had the pleasure of working over the years with real estate professionals around the world who, like me, are passionate about introducing the MLS concept to their respective countries.

Changing the way people have conducted business for centuries, even when it is obviously not working, is a challenge. People tend to do what they have always done. Fortunately, through the power of the Internet and the impact of progressive real estate professionals who have been exposed to our MLS model, and the technology that supports our industry, there is a growing call to change these archaic and inefficient real estate practices. I believe this paradigm shift has begun and will continue big time!

What are your top New Year’s resolutions for real estate in 2014?

My No. 1 resolution is to “think out of the box.” I think all of us need to continue to look at our industry with fresh eyes and be open to all possibilities. Changes are occurring exponentially and too often we are making decisions attempting to defend existing practices and beliefs rather than looking at things with a blank slate. A big part of that process, in my mind, is to really ask what is right for the consumers buying and selling real estate, not just the professionals working with them. Too often in our industry we make decisions based on our needs, the real estate professionals, and then try to justify them to consumers rather than “listening” and giving consumers what they need. Companies like Zillow and Trulia listened and gave consumers what they want and we all know the result … we need to do the same thing and reinvent ourselves continually.

What do you expect to be the top trends and hottest issues in real estate in 2014?

I expect the hottest issue in 2014 will be the ongoing push by large brokers to re-establish control over their data and the subsequent impact this will have on our industry overall. What that will look like is open for discussion, but clearly many brokers, especially big brokers, do not feel MLSs are always working in their best interest. The good news is some MLS leaders are listening; they heard The Realty Alliance’s concerns at the CMLS conference and in many cases are proactively reaching out to their large brokers to better understand the issues and to find resolutions. Of course, it’s a two-way street. Will brokers have this discussion or have the tensions that have built up for many years gone beyond that? Stay tuned!