SAN FRANCISCO — The real estate industry is going to become more polarized, with discount brokerages at one end and luxury, high-service brokerages at the other.
This prediction came from the Inman Connect stage, where a high-level panel — including Dolly Lenz (Dolly Lenz Real Estate), Ken DeLeon (DeLeon Real Estate), The Agency’s Mauricio Umansky and Redfin’s Glenn Kelman — discussed major power shifts in real estate.
“Who will be winning will be the discount broker and the white glove broker,” DeLeon said. “I see Redfin as the discount broker and DeLeon as the white glove service provider.”
Umansky said the market was positioned for change and that brokers had to step up their game.
“From our perspective, it’s important for us to offer the agent more services — who then offer the consumer more services — so they don’t go to the discount brokerages,” he said.
Protecting the industry
Umansky, who recently launched ThePLS.com (The Pocket Listing Service) — which allows brokers to search for and share off-market listings — said the tool was meant to keep listings information away from the public and only available to agents.
“We are losing control of what is out there,” he said. “We have to keep listings to ourselves and protect our industry. Then agents can have a career forever,” he said.
Lenz meanwhile thanked Redfin’s Glenn Kelman for his successful Redin IPO, which she said had raised the value of all real estate brokerages and agents.
Taking advantage of uncertainty
At the same time, New York City was seeing a certain amount of uncertainty with buyers at the upper end of the market nervous to act and not stepping up to the plate.
Luxury properties were attracting one or two buyers rather than 10, and an NYC penthouse recently sold for around $45 million even though its original asking price was over $100 million.
“That’s uncertainty,” Lenz said.
Umansky urged the audience to take advantage of uncertainty: “With uncertainty, you can make change. When everything is rosy, nobody wants change,” he said.
With a number of mergers and acquisitions happening in California at the moment, Umansky said, The Agency — which just opened a new office in San Francisco’s Noe Valley — was not for sale, but looking to buy.
It makes sense for consolidation in this part of the world, he said.
Commenting on a question about recent mergers and acquisitions in California (Douglas Elliman purchased Beverly Hills-based Teles Properties), Umansky said activity of that nature was leading to less competition and taking away more choices for consumers.