Last week I attended the 10th annual Housing Renaissance in San Diego. The Housing Renaissance is an off-calendar gathering of about 60 CEOs, government officials, thought leaders, advocates and policy wonks. The event is by invitation only and is co-chaired by former HUD Secretary, Henry Cisneros, and Harvard Professor, Nic Retsinas. NAHREP National President, Leo Pareja, had one of the most provocative presentations of the week. Four years ago, Leo was the number one Keller Williams agent in the world. Last year, Leo completely divested from his real estate broker business and poured everything into a tech company he founded called Remine. I was in his office in Fairfax, Virginia last week and got to see firsthand what his company was doing. In a nutshell, Leo believes that recent and future technological innovations will cut the agent count by 75 percent in the next few years. The surviving agents will market themselves predominantly online, have exceptional customer reviews and will be proficient in technology systems that enhance the customer experience and reduce friction. His company provides agents with marketing tools that use algorithms, which among other things, predict when households are most likely to buy or sell. People have been predicting major disruptions in the housing industry for years largely because the business of buying and selling homes is still one of the most inefficient in the economy. Technological progress in real estate has been slow because home purchases are a highly expensive transaction serviced by a complicated stakeholder network and governed by layers of onerous regulations. However, the incremental changes Leo is betting on seem not only plausible, but likely.
It has been long understood that a nation of stakeholders makes for a strong union, and for that reason, closing the minority homeownership gap has been a goal and a topic of discussion for decades.
Between 2008 and 2012, more than six million people lost their homes to foreclosure, property values lost almost 40%, and non-distressed home sales fell to all-time lows. It was, without question, the worst real estate market since the great depression. Not surprisingly, the historic dip in the market was followed by a decade-long bull market, the likes of which we have never seen before. Residential real estate is a cyclical market. The...
There is a saying that goes “when the tide rolls back, you can see who is swimming naked”. When the market is strong, it covers a lot of weaknesses. With interest rates moving up, inflation on the rise, and the economy heading towards a possible recession, we’ll find out soon how solid the foundation of the real estate market has been, and more importantly, which companies and agents have built a strong, recession-proof business.