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The next decade isn’t going to see brokerages disappear, or consolidate to the point that only a handful survive. But according to a panel of industry leaders, traditional companies that don’t innovate or evolve are at serious risk of becoming disintermediated.
The panel assembled for a session of Inman CEO Connect in New York Tuesday dubbed “What Will Our Industry Look Like in 2030?” During the conversation, Neda Navab — president of the U.S. region at Compass — argued that as time goes on brokerages that simply exist to “extract” value from the real estate experience and fail to invest in research and development won’t be able to compete as software becomes more advanced. And she said that “the brokerages that delivers the most value will be the only ones that exist in 2030.”
“Traditional brokerages will get disintermediated,” she argued, meaning such companies could see themselves displaced.
Other panelists agreed that change is coming. For example Sherry Chris, CEO of Realogy Expansion Brands, noted that she recently bought a house and the experience reminded her of what might have happened in the 1990s. That needs to, and will, change according to Chris, though so far the industry has fallen short.
“We’ve been talking for so many years about end to end service but we’ve never been able to truly master it,” she noted, adding that “for that to happen there has to be a major shake up.”
Chris Suarez, co-founder of real estate tech company Place Inc., made a similar point, arguing that the real estate industry has been talking about an “end to end solution for way to long and if we don’t have that solved by 2030 we’ve missed an amazing opportunity.”
The takeaway from these comments is there was more or less a consensus among the panelists that the future would bring change, and that the brokerages that survive will be the ones that innovate and adapt. Significantly, this is similar to the advice that agents themselves have been received about the need to adapt or die — only this time it was directed at the brokerage level. In other words, success in the coming years won’t just hinge on agents’ ability to embrace change, but on the larger businesses adapting their infrastructure and core philosophies as well.
That said, the panelists did not predict a future real estate industry in which there are only a small handful of companies. Thad Wong, co-founder and co-CEO of Chicago-base brokerage and franchisor @properties, noted during the panel that in recent years “local, independent brokerages have been crush.” The comment alludes to a period of significant consolidation in the industry that has seen the rise of massive companies such as Compass, some of which have grown by gobbling up smaller firms.
However, despite that consolidation, Wong noted that some local companies have survived and likely will continue to do so. And he predicted that the winners will ultimately be the brokerages that are “focused on the agent distributing value for the consumer.”
“I do think the consumer is going to have a much better experience,” Wong added. “I think the brokerages at the end of the day need to be more innovative.”