Editor’s Note: Before the coronavirus pandemic progressed in the U.S., RISMedia asked Power Brokers to offer their take on the upcoming year, from the current and future market outlook, to overall strengths and weaknesses. Below are excerpts of their perspectives, included in RISMedia’s 32nd Annual Power Broker Report.
What’s the current market environment like? What are the challenges and opportunities?
Valerie Post: My office works with a significant number of international clients, with a large portion from Asia. I was in China at the beginning of January and flew back into the States on Jan. 14. Information about the coronavirus was just starting to circulate, and it was actually a boost to our business in the Boston area for the second half of January, as our international buyers considered us a safe haven for a place to invest their money. Now that the global supply chain has started to be impacted, it is possible that we may see a slowing of the real estate market with reduced cash flowing from those buyers.
Robin Kencel: Despite world health worries and election distractions, buyers are feeling buoyed by the economy and it is showing in their real estate shopping behavior. Buyers at all price points are looking at real estate in a thoughtful and serious way.
What’s most impacting your business these days—for better or worse?
Gary Scott: The real estate industry has both headwinds and tailwinds in 2020. Low inventory is one of this year’s headwinds, as it has been the past few years in most of our markets. This is a result of many homeowners choosing to age in place rather than move, as well as the lack of affordable new construction. The business has felt uncertainty from the coronavirus threat and the impact on the financial markets, though we’re confident the industry will weather the storm.
As a whole, in your opinion, what should the industry be most concerned about?
George Q. Morris: What most concerns me is when an agent gets into believing that there’s not enough homes to sell, the market is bad, the mortgage programs aren’t good enough or other agents are selling property and they can’t. What’s really needed is an agent taking stewardship and responsibility for their role in leading a buyer or seller. It’s the belief and the philosophy we have that the market’s doing “good” or “bad.” Great agents love “bad” markets because they can sell real estate. Not-so-great agents lack the belief, the leadership and the skillsets, and are dictated by what the market is doing or not doing. It’s fear, always.
Rosey Koberlein: This is not new, but we have never done a very good job of communicating the value of a full-service real estate homeownership company. Our competitors are telling our story to our end-consumer and to our agents. If we do not change this tide, we will be weakened.
Valerie Post: The industry should be most concerned about discount brokerages. They offer little to no services, which ultimately depress pricing to the homeowner and put the buyers at risk by not having experienced and knowledgeable representation.
Chris Kelly: It is not the favored termed “disruptors”; it is de-couplers—those seeking to de-couple the real estate professional from the consumer. None of these models have proven to deliver heightened value to the consumer, from either an economic or experience perspective. However, we as real estate professionals must continue to elevate the experience and service we add to the real estate process so that working with us creates less stress, adds more value to the consumer, and makes the process easier than in our absence.
Joseph Rand: The biggest challenge in the industry right now is improving the consumer service experience at a time when both the commission dollar and the brokerage company dollar is slowly deteriorating. If we want to be competitive, we have to raise the quality of the consumer experience industry-wide, but discounters keep putting downward pressure on commissions, and extreme agent-centric models keep pushing down the company dollar to the point that most brokers don’t have the financial ability to drive better consumer experiences. If brokers can’t do it, then the agents themselves have to do it—but agents don’t have the scale or, in many cases, the skillset to make the systemic improvements that are necessary to raise the quality of experiences we provide to clients. We’re not going back to the 50/50 split, so we need to find ways to align brokers, agents and even franchise systems around a shared effort to raise the bar in the industry—and that’s not easy.
Hadi Atri: Real estate is not my second career. I started my real estate career right after I graduated from college. There is a lot of noise out there, but one thing that concerns me, personally, is the number of unqualified agents in our industry that affect us in a negative way.
Gary Rabon: The largest concern has been and continues to be too many untrained and unprofessional agents. This will become a self-fulfilling prophecy unless NAR, local associations, broker/owners and agents themselves don’t look in the mirror and wake up to the fact that only those agents who are committed to being a top professional and adhere to the highest level of ethics should be in the business…and that all others should find a different career that fits their personal passion.
Neil Walter: One of the biggest industry concerns is understanding what consumers want. There’s a lot of consumer sovereignty right now, so if we don’t provide them with what they want, they’ll go away. Consumers want a more transparent and informed experience, and they want good value.
Ken Baris: The industry as a whole needs to be concerned about providing value beyond what clients would typically expect in order to create clients for life. Competition is good, and the best competitors will rise to the top.
Ben Kinney: Not working together. This industry, in many ways, has become like high school sports rivalries. There is no us and them. We all have the same job and the same desire to spread homeownership. Let’s find more ways to come together as an industry.
RISMedia’s 2020 Power Broker Report & Survey is sponsored by American Home Shield, Homes.com, HSA Home Warranty, Leading Real Estate Companies of the World® and Pillar To Post Home Inspectors. The Power Broker Survey ranks brokerages by residential sales volume and transactions in 2019.