SAN FRANCISCO — Craig Donato, CEO for classified listings search site Oodle.com, has glimpsed the future of Internet searching – and it looks a lot like his 5-year-old daughter, who already has an aptitude for finding information online.
“When I think about search and real estate, all the data we’ve seen is that consumers are absolutely using the Internet. It’s certainly happening with the new generation,” he said. His daughter recently looked up song lyrics for “The Cheetah Girls” using the Web, he said, and that says something about the Internet’s evolution as an everyday tool.
“She can search better than her mom. It’s a natural, inert thing. The train has left the station in regards to search being a valuable tool in how people search for real estate listings.”
The World Wide Web has spawned a growing “Web 2.0 world,” Donato said, featuring rich, integrated content such as blogs and Internet video. “We’re in the process of turning ourselves inside out. It’s not about getting everyone to come to you, it’s about being everywhere.”
Donato spoke during a panel presentation Friday titled “A Gaze Inside the Crystal Ball: What Will the Real Estate Industry Look Like in 5 Years?” at the Inman News Real Estate Connect conference in San Francisco.
Other panelists said they expect an increasing proliferation of online property listings information, more transparency and simplification of real estate transactions, a continuing shift of ad spending to online sites, and a further convergence of real estate-related technologies through mashups and partnerships.
“The proliferation of listings will continue, and I think that’s what’s good,” said Tim Fagan, CEO for HomeGain, a company that seeks to connect online consumers with real estate professionals.
And while there is much talk in the industry about advertising dollars migrating from print to online, there are also reasons why print sources have survived, he said, and it has a lot to do with the strong relationships they have built over time with their customers, Fagan said. “Why newspapers and why traditional publishing outfits are still around is because they hold those values really to be sacrosanct,” he said.
As the real estate industry evolves, Fagan said companies in the media space must “not only get your model figured out on the consumer side,” but must also understand the changing environment for advertising.
While property listings information is finding its way to many online venues, some online players are putting a dent in real estate professionals’ commission compensation by asking for referral fees in exchange for drawing in an online audience, said Joel Singer, president of Real Estate Business Services Inc., a subsidiary of the California Association of Realtors trade group.
While Singer said he is supportive of putting property information online, he also said that real estate professionals should make sure they are getting the right return on their investment from real estate technology companies.
“We know in a really good year there are 14 million buyers and sellers. There is a lot of infrastructure that goes on to ensure a 14-year-old in Indonesia can see a home for sale in Sausalito,” he said, noting that just spreading around information online doesn’t necessarily lead to a completed sale. “The guy who’s making (the information) available … didn’t pay for content. It’s not a shortage of leads — it’s a shortage of meaningful leads,” he said
J. Lennox Scott, chairman and CEO of large regional brokerage company John L. Scott Real Estate, said during the panel presentation that his company has worked to build its own Internet tools rather than rely on third-party providers. But he did not rule out the possibility of turning to other companies that disseminate property listings information. “We’ll keep looking a bit and we’ll see down the road. Never say never,” he said.
Real estate information has already been let out of the box, so to speak, said Eric Gorrell, president and CEO of HomeTeam, a company that is building a real estate portal for first-time home buyers. And it’s too late to put that information back in a box. Gorrell said he expects increasing transparency in mortgage originations, so that consumers will be better able to understand specific fees that they pay related to a home-mortgage transaction.
“There is absolutely no reason to sell a piece of property and fill out 87 documents right now,” he also said.
Five years from now, the real estate market should be very strong in California, despite the current downturn, said Singer. There are about 210,000 members of the state Realtor association this year, and they will “be doing the same number of transactions that 86,000 Realtors did two years ago,” he said.
“There is no question that the housing market is slowing down and slowing down dramatically from where it was a year ago (in California),” he said, adding that the marketplace is still largely positive.
“My feeling is the market is going to pause for awhile. I think the pricing situation is going to be a longer pause than (sales activity). The next couple of years are going to be at a normal level.” Basic demographics will drive demand and lead to a stronger market in future years, he said.
Real estate technology companies will likely partner and consolidate more in the future, Fagan said. “They will find ways to work well together. We will see some combinations (of various technologies),” he said.