SAN JOSE – Every October the California Association of Realtors holds their annual expo. I attended, along with our intern Kyle, on Wednesday and Thursday (Oct 7-8). I enjoy this convention because it’s attended by the leaders in the CA real estate and innovative service providers. The fact that this year the event was in the Silicon Valley is one of the things that influenced the tone (at least for me). Tech innovations in all fields are common in San Jose. Some of them were even inside the convention center.
General Thoughts
Green. MLS. Search. Mobile.
These are the four things that really stood out to me at the Expo. Yes, there were a lot of people talking about short sale systems and REO tools but those are temporary. The future of real estate is really in these four things.
Green.
Green building and retrofitting techniques, energy efficient mortgages, and existing home certifications were all passionately discussed (even if the seminars were not well attended). John Shipman of Energy Efficiency Management explained to the real estate professionals that green techniques and thinking are more of a shift than a trend. He believes that agents should become the “source of the source” for green facts, inspections, and financing. If this happens then the agents would not only obtain a competitive advantage over the competition but they’ll help to provide better living environments for California families. Extra focus was placed on the physical inspection of a property combined with a financial analysis of the proposed green projects. They are advocating not doing green for the sake of green but rather dual benefit of both environment and economy.
MLS.
There are approximately 900 MLS systems in the United States. Some states only have one system while others have taken a regional approach. This was necessary when population, geography, and technology made it impossible to consolidate the data. The technology now exists to have an entire statewide MLS for California but there appears to be a resistance to change. There have been two approaches that have been successful in reshaping the MLS landscape this year. They are calREDD and CARETS.
calREDD is an inititive of the California Association of Realtors to create a single MLS for the entire state. Local associations (AORs) can chose to adopt this system or continue to use their existing provider. I saw a demo using live data from several regions that are early adopters. In my opinion, it’s the best MLS platform based on the integration of cutting-edge web application frameworks (at least by real estate standards). They have excellent transparency in their feature set and bug issues and have launched more versions in the last few months than most MLS systems have for their entire history. An agile web development approach gives them a clear competitive advantage over other systems. While they have accomplished a lot in 2009 there is still a long way to go. There are currently about 1,000 users on their system (with more planned) and their are integrating with CARETS in 2010. The promise of a “statewide MLS” has resulted in some wonderful accomplishments, however, it will be a while before the single-system with property-centric data is actually in use in California.
Another approach to the same problem is CARETS. They haven’t tried to create a new MLS system but rather to aggregate the data of multiple separate systems into one source. This has resulted in some MLS systems upgrading their data standards to be RETS compliant. To date, this method has been more successful (with more than 100,000 users) in part because it doesn’t require abandonment of existing MLS providers or changing of service contracts. For the agents, it’s also less disruptive because the system they access doesn’t really change.
Long-term is is likely that both methodologies will be necessary to marry real estate with current technology standards. By the two working together it will increase the speed of integration. Ultimately, the lessons learned on both sides will consolidate information from a regional or statewide system, to a national or international standard. Things are getting better but they’re a long way from fulfilling the dream.
Search.
Just as Google and Yahoo! changed the shape of the internet… search is transforming the real estate information game. Three companies that are dedicated to real estate information and search are Trulia, Roost, and Zillow. Roost was the only one of the three that didn’t exhibit at the conference but they were talked about inside the convention center. All three are companies to watch in 2010.
Zillow is different than the other two because they didn’t start with the active listings but rather they took a property-centric approach. Their database of all of the residential properties in the United States is clearly the consumers favorite in getting an estimate of property values. Recently have they began to partner with agents to augment the data with current information and photos (instead of sometimes stale public records) and direct potential buyers to their agent network.
Both Trulia and Roost are undertaking the daunting task of nationwide real estate search. They’re taking advantage of the fact that people are spending 8-12 weeks online doing research before they even contact an agent (according to a study by the California Association of Realtors). While their revenue models are different, than traditional players in the real estate business, they are clearly establishing themselves as the leaders in real estate information. They are focused on the needs of the customer.
Mobile.
The use of mobile in real estate makes perfect sense. If you can get the information to consumers when they are out in the neighborhoods (instead of at home with the computer) then you’ll have a competitive advantage. SMS has been used for a while to provide instant information about a property. But with the advent of smart phones new ways of accessing the information are being demanded by consumers. There is clearly a lot of growth potential in this area. Two players in this field (one who exhibited and one who did not) are planetRE and aumnia.
