Fifteen years ago, Inman News founder and publisher Brad Inman brought together technologists and real estate professionals for the first-ever Real Estate Connect conference in San Francisco. Inman News is taking a look at how much has changed in technology and real estate since the event’s launch, and is reaching out to individuals who played a role in the early days of Connect.
Robert X. "Bob" Cringely is a tech personality who wrote a technology column from 1987-95 for InfoWorld, has been self-described as a "sex symbol, airplane enthusiast and adventurer" and more recently as "author, raconteur, TV personality, and pizza delivery specialist." He hosted a PBS special, "Triumph of the Nerds," which premiered in 1996, and later wrote a weekly column, "I, Cringely," for PBS.org. You can find his latest technological musings at Cringely.com.
Cringely served as the first keynote speaker during the 1997 debut of the Real Estate Connect event in San Francisco.
He responded to a set of questions posed by Inman News:
Q: What was most unexpected to you about how technology has transformed the real estate industry in the last 15 years, or has technology has transformed society in general?
A: Predicting the future is part of my job. I told the audience (at the first Real Estate Connect conference) that real estate would be changed forever by automation and the Internet, but most likely in ways that we couldn’t expect that day. Sure enough, technology has transformed real estate in many ways (the rise of multiple listing service websites and other listing websites, and buyer and seller tools), but nobody anticipated that mortgage automation would almost destroy it all.
Q: What current technological trend is most interesting to you, and why?
A: Disintermediation is continuing and with it the loss of bodies in the industry. That can be good or bad depending on whether you are one of those bodies, but in the long run technology leads to greater speed, transparency, and better price discovery — if it is done correctly.
Q: What has surprised you about things that haven’t changed as much for the real estate industry in the past 15 years? What do you believe are barriers to change, if any?
A: As always there are professional barriers set up by classes of workers trying to protect what they see as their turf. Sometimes there’s a breakout success like mortgage-backed securities or credit-default swaps, which, despite their current bad reputations, are really great products unless they are used by evil or stupid people. So the lawyers and the title companies and the big banks are all in place more or less forever and are for all intents too big to fail even if failure would be good for them.
But still there are things I expected to see that I haven’t. I thought surely by now we’d have crowdsourced mortgage pools, for example, where investors could kick the banks out of the way and lend directly.
Q: How has technology shaped or changed consumer behavior in the past 15 years?
Everything is faster than it used to be. There’s lots more information and it is harder to hide the bad news.
Q: How has consumer behavior shaped or changed technology in the past 15 years?
A: Buyers and sellers are still more comfortable with a real estate professional to guide them through the process. I don’t think they are really needed anymore for much more than psychological reasons, but it is hard to argue with psychology.
Q: If real estate consumers are much better informed about real estate than they were 15 years ago, why did the nation experience such a massive downturn in the real estate sector? What fatal flaws or gaps in real estate information for consumers remain, if any?
A: Are you kidding? Offer people easy credit and they’ll accept it. Take the credit away and they’ll crash and burn. Having crashed and burned, don’t expect the same mistakes again.
Q: How could technology be used to help prevent a future real estate and economic downturn of this magnitude?
A: Technology has been used for the most part against consumers. There was easy money, sure, and quick access to property information, but regulators, for example, never made any attempt to drill down to the individual consumer level to assist buyers and sellers to do the right things.
(Regulators) just don’t get it that they don’t just set rules, they can actually monitor and enforce them on an individual basis in real time. Where’s the Federal Housing Administration’s expert system that drags together data from all over the Net and says, "You probably shouldn’t be getting this loan on this property no matter what the bank says"? But regulators don’t see themselves offering that level of service, which is a shame because it can be automated 100 percent.
Q: How has the pace and cost of technological innovation changed in the past 15 years?
A: Moore’s Law continues at the same pace but what’s really changed is the emergence of powerful mobile technology that essentially turbocharges Moore’s Law because it is being applied on both the producer and consumer ends in an environment where everyone buys new hardware (a new phone) every 18 months instead of every three years.
Q: Will technology drive down the average cost of real estate services that consumers pay? Has it already? Will it improve the quantity and quality of real estate service that they receive? Has it already?
A: It has already. Take appraisals, for example. As a percentage of the property value they (previously) cost easily 10 times what they do today. This is just one example of many.
Q: What are the red flags with increasing use, reliance of technology in real estate and other industries, if any?
A: Whenever industries rely on technologies they don’t understand, can’t explain, and see as miraculous, it is time to worry.
Q: Because so many on the planet are connected to one another, what potential do you see for online networks on a global scale? What is the as-yet-untapped potential and what does it represent for technological innovators? For industries such as real estate?
A: We’re entering a period where real estate investors are going to be using technology almost exclusively to find the arbitrage opportunities where can be found huge profits. I’m thinking specifically of the foreclosure market and the kind of havoc that a largish hedge fund could wreak if it chose to. And eventually they will choose to.
Q: What are some overarching trends in technology innovation and adoption that you would expect to see continued, evolved or launched in the next 15 years?
A: More mobile, the demise of offices in general, fewer agents, more automation, and thinner profit margins in a struggling market.
The next Real Estate Connect event is scheduled from July 27-29 at the Hilton San Francisco Union Square hotel.