Read Inman's exclusive Roadmap to Real Estate's Future

A letter to the real estate industry

From Brad Inman
Founder, Inman Group

Dear Real Estate Industry,

Does your future feel muddled? No wonder — bank failures, a war in Europe, sky-high inflation, rising interest rates, aggressive Central Bank intervention, and a wobbly global economy all play their part. And who knows what the next shoe to drop will be. 

Our professional and personal lives have been shaken by these unpredictable, rapidly changing events. 

Where will it all shake out for us as professionals, and as an industry?

Imagine for a moment if you could see clearly:

Life After the Market Correction: Will we return to robust transaction volumes, and when? Will there be more or less inventory? How much lower will interest rates go? 

Life After the Industry’s Megalawsuits: What does life look like after buyers agents take on a new role and will it spawn a new business model for brokerage? How will commissions change and how will agents be compensated?

Life After the Proptech Meltdown: Who will survive and who will thrive? Where are there opportunities in the aftermath? Has the digital transformation stalled as innovators struggle to stay alive?

Life After the Messy COVID Fallout: How have we changed — the good, the bad, and the ugly?

In the desert of Palm Springs, California, from February 27- March 1, that is exactly what 70 industry leaders tried to figure out together at this year’s Inman Disconnect.

This was a serious three-day discussion at a serious time for our industry.

The collective wisdom of this savvy group mapped out what the industry will look like within a year — as well as how it must act to confront the inevitable changes that are coming. 

Some highlights:

• 2023 will continue to be uncertain and volatile. The industry should brace itself for a sputtering housing market as interest rates stay high through the summer. 
• Opportunity is harder to come by, but less so for brokers and agents who help their customers navigate the changes.
• Recovery is waiting in the wings for 2024, as pent-up demand is released on the market.
• Home prices will fall in many markets, but sellers will become more realistic as inventory remains tight.
• Industry consolidation will heat up as weaker brokers face failure. Agents, teams and brokers who are liquid, manage their costs and lead with their culture will survive. 
• The fallout from COVID has subsided, but the value of home has never been more important. 
• The great geographic reshuffling has ended, but the value of relocation has never been more important as people search for safety and areas that align with their values.
• Affordability, tax policy and the work from home phenomena will continue to pace the geographic realignment.
• By the end of this year, we will have a clearer picture of the aftermath of the industry lawsuits. The litigants, the DOJ and the FTC are working furiously to reshape how real estate is bought and sold.
• The broker cooperation tradition, as we know it, will be threatened with one outcome being buyer agent fees baked into settlement documents.
• Fees and agent relationships will be more transparent. There will be confusion in the short term, but new models with more clarity will take shape in the long term. 
• The proptech meltdown is not over as these emergent tech companies race to get profitable. Many will shut down, while others will merge as follow-on funding remains challenging.
• Innovation will not end as AI breakthroughs reshape real estate marketing, help deploy property data and make agents and brokers even more productive.
• AI will lead to an end of many administrative jobs but make companies more efficient and profitable.

The entire industry is being tested. Never has collaboration, partnerships, technology and realism been more important.

In the aftermath, the industry will be leaner, but stronger, and better equipped to create a positive consumer experience.

Each time the industry gathers at Disconnect, I am blown away by the sincerity of real estate’s leaders — and their true desire to enact the change they want to see. This year was no exception. 

Even as a light emerges, perhaps distant, at the end of the tunnel, we all need each other more than ever. I’m grateful to everyone that spent three days in the desert with us at Disconnect 2023, and urge everyone to read the full Roadmap to Real Estate’s Future that Inman is publishing this week. 

The road ahead is clear. Let’s go do this. 

Sincerely,
Brad

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