The future of real estate

Editor’s note: Looking ahead to 2010 we are optimistic that the real estate world will be better, but we also expect radical change. Paul Saffo, at the Institute for the Future, once said that in a two-year period less happens than we would have thought, and in a 10-year period more happens than we could ever imagine. This four-part series is a fun look at what the future may hold for the real estate industry. The predictions are not fact. (See Part 2: The mortgage debit card debuts; Part 3: REM: The Real Estate Marketplace and Part 4: Visionaries pull back curtain on real estate future.)

I gave myself an assignment. 2010? What will the future of real estate hold in five years? Go ahead Inman, be bold, be arrogant, and predict the future.

Ten years ago, I wrote a series dubbed “Robo Realty,” predicting that the MLS would be on the Internet, we would have a seamless digital transaction and three-dimensional pictures of every home would be on the Web.

This task is a little like predicting my weight in five years. My body frame provides a fairly predictable range of my weight gains or losses, so nothing radical in my weight is likely to occur over the next 60 months. I also can glom onto other irrefutable scientific facts, like metabolism decline for a man more than 50 years old, where I live and the odds of staying active and education and the likelihood that I will stay informed about my health and act rationally.

I can also infect my forecast with optimism, be hopeful about my health regiment and assume that I will weigh less.

Or, I can resolve that life will grow more tragic, staying healthy will be futile and so I will bloat up like the latest round of fat dads on television comedies. I can grow even darker and imagine being inflicted with a bizarre disease that causes me to lose half of my weight. That’s what some futurists do, citing cataclysmic events or trends, based on some facts, and invent a future that may seem unlikely today.

The gold standard crowd thinks like that. In real estate, Gary Keller has built his real estate empire around the notion that when the boomers run through their prosperous years later in this decade, the economy and the housing market will rupture like a water balloon hitting the sidewalk. He uses this prediction to warn Realtors to grab their nest egg now or risk their economic future later.

I have never been a fan of the dark side. In fact, I am inherently optimistic about the future. In the mid-1990s, I made a bet with my good friend Mitch Capor about what lies ahead. We selected five social indicators: crime rate, pollution, economic growth, poverty and unemployment. I said the world would be better on all fronts, he said it wouldn’t. I won and hope won.

It wasn’t that I am smarter than Mitch; he reads much deeper books and is more likely to learn Latin before he dies than I am. The difference is I am hopeful about the world. Mitch, while cheerful today, is gloomy about the future. 

I would argue that my hope in humankind is based on fact, but I must add, they are the facts I like. I believe in modernity. Living without flush toilets, off the land, without the Internet and reaching an average the age of 44 is not something that I strive for.

I also believe in humankind’s ability to solve problems. Sometimes we are backed against the wall, but we do solve our woes, when it is required of us.

Take smog in Los Angeles. I lived in the Hollywood Hills in 1980–a fascinating experience, despite the bad air, for a young man from a small town in Southern Illinois. The pollution was so bad that my Lucky Strike smoking habit paled in comparison with 300-plus poor air quality days. Today, Los Angeles enjoys clean air the vast majority of the days, and I quit smoking. We both grew better.

So it follows, I am hopeful about global warming, world poverty and other ugly problems. I listened to a gentleman from the Earth Institute talk the other evening about poverty in Africa. It was a remarkable and initially depressing pitch about the needs of the poor in this distant land. However, he concluded with something that I didn’t expect him to say, considering how gloomy he was; he said, “The solution is within our grasp.” I agree with him.

All of this is a long about way of saying that when I attempt to tell you what I think is around the corner, it will not be based on a bad-world-ahead forecast, but just the opposite.

However, what is bad for you and what is bad for me may be different things. While we probably agree that clean air in Los Angeles is a good thing, we may not agree that a fundamentally different real estate industry is all-good, particularly when I tell you what I think the future might look like.

But before I get started, let me remind you of my futurist report card:

• I predicted in the 1980s that real estate consumers were in desperate need of more information and insight and once they got it, they would be self-reliant and the financial services and real estate industry would be turned upside down.

• I predicted in the early 1990s that real estate listings would be online–as did many others.

• But I was also the chucklehead who in 1998 predicted that there would be 500,000 members of the National Association of Realtors by 2003.

• I also predicted in 1999 that most real estate transactions by 2004 would be seamless digital events. That is called “hopelessly optimistic.”

Finally, these were my words in 1999: “Take your business model, pitch it out the window, stomp on it, and get rid of it, for it will be worthless to you in a very short period of time.”

Last year, I re-read those words and I was embarrassed. They seemed like ridiculous, high-on-the-Web, and arrogant dribble.

But this year as I re-read them again, I am thinking they are not too far off, which is why I am busting to tell you where I think our little world of real estate may be headed.

Here goes.

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