SAN FRANCISCO — Brokers and other real estate industry gurus discussed Google’s classified real estate listings service, a rise in online advertising, declining real estate lead-conversion rates, and the birth of new boutique brokerages during a Wednesday discussion at a real estate conference.
Justin McCarthy, strategic partner development manager for Google’s real estate division, told the audience of real estate professionals not to fear Google’s free online classified service, called Google Base. The service is intended to help consumers drill down to more relevant information when they conduct real estate searches. For example, Google is now populating its mainstream Web search results with data from its classified service, McCarthy noted, so that consumers have the option to narrow their real estate searches specific to property listings.
A panel of real estate experts responded to audience questions about industry issues during an “Internet Strategy for Brokers” session at the Real Estate Connect San Francisco conference.
McCarthy said that people seem to want “extreme answers” about whether online advertising will completely eradicate print advertising, though the reality may not be so extreme. “Is print going away and is it being replaced by online? Is there an ultimate single winner? I don’t think there is. I definitely don’t think there is at this moment. Google is not asking you to turn your back on whatever programs are working. Rather than think about it from an extreme standpoint, think about it more from a test standpoint.”
Developing Internet advertising strategies is a bit like building a farm club for a baseball team, he said. “Test as many things as you have the appetite or time to test. Don’t just throw a dollar here or there. Commit to test,” he said.
J. Lennox Scott, chairman and CEO for John L. Scott Real Estate, said the company has definitely been shifting a greater share of advertising dollars toward the Internet, though still spends about 40 percent of its advertising budget on print advertising. Lead-tracking tools, such as customer relationship management, have become an increasing focus, he said.
Sherry Chris, chief operating officer for Prudential California Realty, said the company has worked with other companies, such as HomeGain and LendingTree, to generate leads for its agents, and she noted that the online lead conversion rate seems to have declined across the board as the market has slowed. Kenneth Jenny, CEO and managing partner for tranCen.com, a real estate consulting company, also encouraged real estate brokers to partner with technology companies to gain access to new tools.
“It’s not our job in the brokerage industry to create those products,” he said. “More and more of those solutions should be focused on broker and agent needs and mostly the consumers’ needs.”
Responding to an audience question about the survival of small brokers among a sea of bigger fish, Chris said that there is still room in the industry for small real estate brokers. “It doesn’t matter whether you have three agents or 30,000 agents. If you can create a niche … it doesn’t matter what size you are,” she said.
Chris noted that new brokers continue to join the industry and the cost of technology has declined, which indicates that “there are going to be a whole lot more boutiques popping up in the months and years ahead.”
A show of hands among real estate professionals in the audience showed that many real estate markets across the country are in decline, with slowing sales and growing inventories. The inventory of for-sale properties has grown about 113 percent year-over-year in California, Chris said, and panelist Ira Silberstein, director of classified operations for The New York Times, said year-over-year inventory is up about 80 percent in the New York market.
But there is a lot of interest in online real estate, Silberstein added, as the market has become more favorable for buyers. “A lot more buyers are spending a lot more time online,” he said, with page views and overall site traffic increasing.
Shari Chase, CEO, president and founder for Chase International, a luxury real estate company, said that buyer confidence has “definitely deteriorated” at the lower end of the real estate market while “we’re seeing more people who are purchasing more expensive properties than we ever have before. On the higher price ranges it is going like mad.”