Disruptive Change in Real Estate

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What have been the top five most significant industry disruptors over the past five years? What are the top five disruptive events the industry could be facing over the next five years? For BCREA to strategically plan for a more sustainable and thriving industry for BC REALTORS®, Brokers and organized real estate over the next five years, we need to be able to answer these questions. Discover the top 5 lists from experts Rob Hahn, David Eaves, Jeremy Conaway, Doug Devitre, and the Greaterfool.ca community. The Report aims to establish a common understanding of the rate of industry change, and spur “what if” dialogue amongst BC ORE leadership to prepare for a changed future. This research report is a part of the British Columbia Real Estate Association's Journey of Discovery. BCREA launched the Journey of Discovery (JOD) to help our organization and BC’s eleven member boards strategically plan for the next five years. This project seeks to understand where the greatest contributions of products and services could be for increasing the innovation of REALTORS® in service of their consumers. If organized real estate is to effectively adapt to and proactively initiate change, which we believe is necessary now more than ever, the first stage is to gain a solid understanding of the current and future states of the industry. For access to the slides with links and our other reports, please visit http://web.bcrea.bc.ca/jod/reports.htm This presentation was prepared by CE Holmes Consulting, Solvable & Monique Morden Consulting

Transcript of Disruptive Change in Real Estate

  • JOURNEY OF DISCOVERY Disruptive Change Report FOUR EXPERTS SHARE TOP FIVE MOMENTS IN REAL ESTATES EVOLUTION Version 2 23 July 2014 Prepared by: CE Holmes Consulting, Solvable, Monique Morden Consulting
  • BCREA Journey of Discovery: Disruptive Change Report Goal for the Report Our first Journey of Discovery Report opened with a quote from Dale Stinton, NAR CEO, It is hard for me to imagine an industry that has expe- rienced more sustained turmoil in the last half dozen years and there appears to be little to suggest it will abate any time soon. It was the assumption of the JOD Task Force, BCREA Board of Directors and JOD Research Team that this was a widely shared sentiment and experience across the province. In the process of getting to speak with hundreds of REALTORS and Brokers over the past seven months, we found this sentiment of unrelent- ing change a consistent themeboth in looking back, and in looking forward. And yet, in the many dialogues we have had with member board leadership over that same time, there is a widely differing understanding of that rate of change, and, in some cases, a dis- agreement about whether fundamental change is happening at all. Our goal for the Journey of Discovery research is to surface data that supports fact-based decision mak- ing for BCREA as we plan for the next five years. We felt that a missing link in our data was in provid- ing a shared understanding of the change affecting our industry. With that, we reached out to a number of experts to give us their top five lists of disruptive change over the past five years and those disruptions likely to happen over the next five. While you may not agree with all the findings, we think these thoughts can shape a constructive dialogue on what BCREA can do to advance a more sustainable and thriving industry for BC REALTORS, Brokers and organized real estate. Black Swans In the Harvard Business Review article, The Six Mis- takes Executives Make in Risk Management, the au- thors define a concept that has become part of con- temporary business parlancethe Black Swan. Low-probability, high-impact events that are almost impossible to forecastwe call them Black Swan eventsare increasingly dominating the environ- mentInstead of trying to anticipate low-probability, high-impact events, we should reduce our vulnerabil- ity to them. Risk management, we believe, should be about lessening the impact of what we dont under- standnot a futile attempt to develop sophisticated techniques and stories that perpetuate our illusions of being able to understand and predict the social and economic environment. Essentially the message about Black Swans is that while predicting high-impact events is nearly impos- sible, the predictions themselves help to prepare for eventualities should the event(s) occur. The article de- scribes preparedness as a kind of insurance policy for businesses and organizations. Thus, we sought perspectives that could spur what if dialogue amongst BC ORE leadership to prepare for a changed future. The predictions are not proposed for their likelihood to occur, which the Black Swan theory would shoot down, but rather to ensure that BC ORE is prepared should they occur. Similarly, the list of past disruptions is not indicative of the future, but rather to create a common understanding of our industrys rate of change and the urgency to prepare for further escalation. Selection Process We invited experts by considering the diversity of their perspectives combined with an underlying knowledge of the real estate industry. We were particularly inter- ested in those individuals who frequently write and speak about technological change and disruption. Our initial five invitees were: Rob Hahn, David Eaves, Stefan Swanepoel, Garth Turner and Doug Devitre. Stefan Swanepoel recommended his frequent Trends Report contributor, Jeremy Conaway, who accepted the invitation. Garth Turner turned down our invitation (read more on the next page), thus we moved forward with the four experts. 02 REPORT CONTEXT
  • BCREA Journey of Discovery: Disruptive Change Report Rob Hahn Rob Hahn is the founder and Managing Partner of 7DS Associates. Rob writes the well-known blog Notorious R.O.B., where he opines on topics in real estate, tech- nology, marketing, social media, and strategy through far-too-long posts. His most recent venture, Neighborhood Advocates, helps REALTOR Associations mobilize grassroots support and member engagement. Rob started in real estate at a spe- cialized commercial real estate investment firm, and moved on to Realogy, where he headed the interactive marketing for Coldwell Banker Commercial. David Eaves A public policy entrepreneur and negotiation expert, David Eaves has become in- ternationally recognized for his work and advocacy on open government. In 2008, David advised the Mayor of Vancouver on open government and open data, and helped draft the Open Motionthe worlds first municipal motion on open govern- ment. Since then, he has advised several municipalities and international organiza- tions on open data and innovation strategies. Over the past few years, David has been brought in to speak at various regional and national real estate events. Jeremy Conaway Jeremy Conaway is considered one of the innovative and creative organizational, MLS and brokerage system designers in the North American real estate industry. His brokerage and member service systems focus on profitability, standards, ac- countability and transparency and are being used by some of the top brokerages and REALTORS on the continent. He work is featured in both Swanepoel and NAR publications. He is the contributing editor for the Real Trends publication. Doug Devitre REALTOR Associations bring in Doug Devitre when they want to use the technol- ogy and talent they already have to communicate better with their members. He has self published three books including his latest, Strategic Altering: How to Influence Members by Making Better Decisions Faster, and commercially publishing the forthcoming, Screen to Screen Selling: How to Dramatically Increase Sales and the Customer Sales Experience Without Being Physically Present, with McGraw Hill in the first quarter of 2016. In 2013 Doug Devitre earned the Certified Speak- ing Professional credential, which is bestowed upon the top 10% of professional speakers worldwide. 03 EXPERT PROFILES
  • BCREA Journey of Discovery: Disruptive Change Report On May 20th a blog post appeared on thegreaterfool. ca titled, They asked for it. The post was in response to our request of Garth Turner to be one of the experts for this Report. Turner first voices his surprise, Turns out the provincial body actually wants to clean up the industry, or at least hear from those who be- lieve change is necessary. It even issued a fat dis- cussion paper asking big questions like, what in the future will customers expect of REALTORS? How is the business of house-flogging going to change, because of the economy, or technology or a tidal wave of wrinklies? Then he proceeds to ask his readers for their own top lists of past and future disruptors: Are we up to the challenge, blog dogs? What five things do you wish me to tell the REALTORS about how we got into this sorry state, and the changes that will be needed to get out? Within 24 hours Turner received 268 responses to his post. While too extensive and varied to be able to summarize here, we cannot encourage you enough to spend sometime with the comments, some of which provide further elaboration of the disruptors noted by our experts, while others are completely new and thought provoking. The following day Turner posted, Blown Away, in which he wrote, All Jake Moldowan needs to know about improving the house-flogging business in Can- ada was published on this site. Actually, Ive nothing further to add. I think he knows it. And that was that. Within 24 hours we had a list of dis- ruptors crowdsourced from across the country. And all it took was asking the right guy. Undoubtedly, we can learn a great deal not just from the content, but also in creating a platform that can engage our members and consumers in strategic thinking about our collective future. 04 CROWD CONTRIBUTION
  • BCREA Journey of Discovery: Disruptive Change Report ROB HAHN (PGS 0708) 1. Elance, The Brokerage The real estate transaction becomes highly fragment- ed, highly specialized, and highly outsourced. 2. Zillow Killed the Franchise Star Will franchises be able to charge their 6% royalty fees when Zillow, Trulia and Move become the dominant brands synonymous with real estate? 3. Real Estate Agents Become Employees Governmental entities eliminate the loophole of clas- sifying real estate agents as independent contractors, and 80% of REALTORS are fired the next day. 4. Large Brokers Flex Their Muscles A database is created that sits between the brokerage and the MLS, thereby granting total control over list- ing data to the brokerage 5. Banks Enter the Portal Business To control the consumer at the top of the funnel for mortgage leads, another bank, mortgage company, or other financial institution enter the portal business. DAVID EAVES (PG 10) 1. The Collapse of Some Brokerages Large brokerages without a clear brand or resonance in the marketplace go under. 2. The Bubble Bursts At some point the housing market will stumble or fall, which could force consolidation or cause a temporary decline in the number of REALTORS. 3. Baby Boomers Continue to Downsize This will have a big impact on the types of housing that is built and the large number of single family homes occupied by empty nesters. 4. Driverless Cars These cars could increase the oute