What does 2010 hold for the real estate brokerage industry? While I don’t own a crystal ball, here are my 10 best predictions about what to expect in 2010.
1. ‘Economic Slim Fast’ or sunshine on the horizon?
Higher unemployment and additional tax increases translate into fewer spendable dollars for housing. This means people can afford less resulting in more downward pressure on prices. On the flip side, sales in California and Florida have been on the rise. Real estate has usually led the way out of past recessions. Furthermore, some economists believe massive congressional spending will likely result in inflation. During inflationary times, hard assets such as gold and real estate are usually the best hedges.
Prediction: Provided the new health care bill and additional congressional spending doesn’t completely sink the economy, expect to see an increase in the number of sales, price stabilization, and even increases in the first-time-buyer price range. On the other hand, look for a reduced number of Realtors who can afford to stay in the business if they face additional taxes plus possible mandatory payments for health insurance.
2. Sales training makes a comeback
The strong seller’s market that ended with a crash in 2007 resulted in a whole new generation of Realtors who were order-takers rather than salespeople. The market downturn also resulted in the elimination of most brokerage in-house training programs. Consequently, it comes as no surprise that the median age of Realtors is climbing as the younger agents who lack strong sales skills are being forced out of the industry.
Prediction: Companies who move into "constant training mode" and specifically recruit and train younger agents will be the big winners in terms of market share for many years to come.
3. Digital rubbernecking: Big Brother is everywhere
Have you ever played a Facebook game? Are you using Google Voice, Gmail or Google Docs? Did you know that using these sites could jeopardize your privacy and that of your clients? Many online games and applications have a hidden purpose: to access your private data, harvest it, and sell it to other vendors. This practice is called "data mining" and it’s a major business.
For example, assume that you have "friended" one of your clients on Facebook. You then decide to play a Facebook game. The game application harvests information about each of your "friends" without them ever knowing or agreeing to provide access.
Prediction: Rules governing brokerage and agent obligations with respect to client privacy must be addressed now. Otherwise, look for an increasing number of lawsuits related to privacy issues.
4. Alternative business models continue to thrive
The days of palatial real estate offices will soon be a distant memory. Numerous brokers are experimenting with new models that range from having no office whatsoever to having a small condo-style office where the agents pay for the space they want.
Prediction: High costs will force major brands to scale back on office space as well as the number of agents they maintain on their rosters. If brokerages have to provide health insurance for Realtor "employees," look for an immediate purging of nonproductive agents from company rosters.
5. Public grading of Realtors
An increasing number of consumers (especially those in Gen X and Gen Y) search for reviews of virtually everything online. Sites such as AngiesList.com, TripAdvisor.com and Yelp.com continue to grow in popularity as resources for third-party reviews of services.
Prediction: Consumer demand will drive more companies and associations to implement online rating systems for their agents. Look for the search engines to give higher ranking to agents and companies who receive endorsements on third-party sites. …CONTINUED