The future of real estate may be bright, but probably not for everyone.
“The strong will survive,” Coldwell Banker CEO Ryan Gorman said Wednesday morning, “and others will find a new path.”
“The future for me is less about all the agents,” Side CEO Guy Gal similarly argued, “and more about the best agents.”
Gorman and Gal laid out their vision for the next 10 years of real estate during a session, titled “Three Takes on the Future of the Industry,” at Inman Connect New York Wednesday. And while the two executives didn’t entirely agree on the details, they both made a similar general point: The future of real estate is fewer agents.
“Today you have roughly 1.4 million licensees,” Gal said, ” and you have five and a half million transactions. You don’t need that many licensees to facilitate that many transactions.”
Gal went on to argue that today there are probably around 100,000 top agents doing really good work and facilitating between 30 percent and 50 percent of all transactions. The number of top-producing agents could increase to as much as 400,000 as people join teams, but ultimately that will be the group left standing as change continues to burn through the real estate industry.
However, Gal argued that this process will actually be a good thing for the business because it will lead to better service for consumers.
“One out of every two people at least is not getting the best results and the best experience,” Gal said of the current state of the industry. “Consumers can’t tell the agents apart. That’s why consumer confidence in the agent-led transaction is so low.”
Gorman was less specific with his numbers, and said that he appreciates how the real estate industry “takes all comers” right now. Anyone can become an agent, and in Gorman’s view that’s a good thing.
Still, he ultimately agreed that “there will be some consolidation,” though he argued it “won’t be massive.” Gorman also said that the consolidation will arise in part thanks to consumers demanding more; agents who survive this period of change are the ones who can meet consumers’ increasingly complex needs.
Susan Daimler, a senior vice president of Zillow’s Premier Agent program, also appeared on the panel and agreed with Gorman that in the future “the customer, the consumer, is going to drive everything.”
“We’re moving in that consolidation direction already,” she also said.
In Zillow’s case, Daimler explained how Premier Agent includes a scoring system and that participants have to meet a minimum standard in order to stay in the program — a reality that captures how the strong are already the ones surviving.
“We’ve raised the bar for how you have to perform once you’re on our platform,” Daimler said.
For the strong and really serious agents though, the future is promising. None of the panelists suggested agents were going away any time soon. Gorman, for instance, argued that establish brands like Coldwell Banker — a consolidated version of which he recently took over — will continue to thrive.
And Gal said that despite reductions in their ranks, agents will still be in demand a decade from now.
“The best interface for a consumer in a transaction is not a chat bot,” he added, “it’s an agent.”