Friday, May 05, 2006

Top 15 Real Estate Trends - 2006/2007

When the nice folks at RealtyBlogging.com asked me to review the 2006 Swanepoel Trends Report from RISMedia, how could I refuse? Anything written by someone whose first name is Stefan is worth reading, right? All kidding aside, I have followed Stefan Swanepoel for a number of years now, and have always been interested in what he has to say.

The Swanepoel Trends Report begins by providing an overview of events which have impacted the real estate industry over the past ten years (1995-2005), and then gives us a glimpse into the future based upon the author's identification of what he sees as the top fifteen trends shaping the industry.

The author's stated goal is to introduce real estate professionals to emerging trends at an early stage, enabling them to prepare for many possible future scenarios. From Application Software Providers (ASPs) to Zillow, if it may have a role in shaping the future of real estate, it is almost surely contained in Swanepoel's report.

I found the report to be very comprehensive in its breadth of coverage, and an essential reference for anyone wanting to stay on top of the latest industry trends. However, there are a couple of emerging trends, mainly involving competition and regulatory matters, which I felt were largely ignored.

One big wild card as I see it is the current anti-trust suit which the U.S. Department of Justice has filed against the National Ass'n of Realtors, litigation which could obviously impact NAR's proposed new ILD policy and the way in which MLS data is shared and disseminated. In my opinion, the decision as to whether a MLS should be treated as a public utility, as opposed to a proprietary tool primarily for the benefit of MLS members, will impact the future of the industry for years to come. Another subject given little attention in the report is the minimum service standard and anti-rebate legislation being pushed by a number of state Realtor associations, legislation which is also being seriously challenged by the Department of Justice and which has raised the ire of a number of consumer advocacy groups.

The joint workshop on competition in the real estate industry put on last fall by the Dept. of Justice and the Federal Trade Commission highlighted for me the fact that attempts by the traditional Realtor establishment to stifle innovative new business models will be met with stiff regulatory and/or legislative resistance. The current federal legislative/regulatory environment will not favor historical industry business practices, and may be an impetus for sweeping changes in the industry, which may include allowing federally chartered banks into the real estate business.

I also happen to believe that the "For Sale By Owner" movement is gaining traction as websites which aggregate FSBO "listings" gain critical mass in certain markets, most notably Madison, Wisconsin. Increasing numbers of "unrepresented sellers" may be a challenge the traditional industry will need to face, especially if major internet players enter the FSBO fray.

Also on the radar screen for me as an exclusive buyer agent is the continuing shift toward non-agency relationships, such as transaction brokerage, in a number of states, as well as the wholesale lack of meaningful agency disclosure as documented by NAR's most recent survey of Buyers and Sellers. I believe that groups such as the National Association of Exclusive Buyer Agents, of which I am a member, will continue to have a role to play in shaping the future of the way real estate is practiced.

Stefan Swanepoel's 2006 Trends Report will most certainly enable its readers to better plan for the future by highlighting those trends which will most likely affect the future of the real estate industry. My only suggestion would be that the the author place more emphasis on the current legal and regulatory issues facing the industry, as they may greatly impact the future of real estate as we know it.

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