Welcome to another edition of an annual tradition, in which I go back and grade myself on my predictions made at the start of this year. My track record so far:
- 2010 Predictions: 6 of 10 (.600)
- 2011 Predictions: 4.5 of 7 (.642)
- 2012 Predictions: 2 for 7 (.286)
As ever, I hope to be wrong most of the time, since my predictions tend to be a bit of a downer. But let’s see how I did in 2013.
1. The Housing Market Defies Expectations: NO
Thankfully, I was completely off the mark on this one. I thought that the combination of Fed pullback from monetary stimulation and slacking appetite of investors would lead to an unexpectedly down year for housing. The reality was that housing was a bright spot in the economy, along with energy (i.e., fracking), with home prices gaining 12% in 2013 and activity remaining strong. The experience of REALTORS was in line, with some brokers and agents reporting record years in production and profits. All in all, a great year for real estate.
2. Industry Realizes that Renter Nation is Here to Stay: YES
Although the housing market was extremely strong, it does appear that 2013 marked a watershed moment for rental-related businesses. One sign is NAR allowing Realtor.com greater latitude for putting rentals on its website. But more important signs are brokers and agent teams everywhere ramping up their property management services, their landlord services, and other rental-related services. Perhaps the continued strength of investors in housing played a role, but more and more brokerages and agents are starting to cater more to landlords and tenants.
3. Finally, An End to Syndication War: SPLIT
I have to grade this prediction as a split. We haven’t seen a decisive end to the Syndication War, but there is a significant and growing group of companies and people who no longer think syndication is straight from the soul of Satan. Of course, the anti-syndication folks remain pretty committed to the jihad, but all of the energy is on the side of people who want to move on.
An example is someone like Leslie Ebersole, who is a co-moderator of Raise The Bar Facebook group, and a top agent in the Chicagoland area. In a number of posts, she’s opined that the portals are just another marketing channel like any other, and she evaluates them on the basis of ROI. She doesn’t love them, nor does she hate them. They’re just a tool to be used in some situations, and not in others. This viewpoint is winning converts.
Another key example comes from an unlikely source. At CMLS this year, The Realty Alliance made it clear that it no longer considers the portals and syndication to be the biggest headache/threat; that (dis)honor is reserved for the MLS. Given the importance of The Realty Alliance, of which Edina Realty is a major member, it seems to me like a sea change in attitudes.
More and more MLSs are working directly with the syndicators, with one enterprising MLS out of Alabama going with direct syndication to have more control over the data. I think Huntsville’s tactic will become more and more popular going forward, and syndication will become a tool in the MLS toolbag.
Nonetheless, I can’t quite say I was right with the prediction, since you can still find thousands of brokers and agents who just gnash their teeth and rend sackcloth at the mere mention of Zillow.
4. Buyer Agency At Risk: NO
I thought in January of 2013 that we might see significant traction of technology-enabled businesses that eliminate the value of buyer agency. Apparently not.
BuyerCurious, which I wrote about in my predictions, is still around, and it appears to be growing. But it hasn’t taken over by any stretch of the imagination.
Sure, there were signs that buyer agency continues to bleed value to the consumer, but there was no evidence that buyers have rebelled en masse in 2013. What we’ve seen instead is the growth of agent teams that take advantage of buyer agency while essentially providing what amounts to sub-agency under the team. But that isn’t exactly the death knell of buyer agency.
The technology is there; but we haven’t yet seen consumer behavior change because of it.
5. Associations Under Assault: YES
The bombshell dropped by The Realty Alliance tilts this prediction towards a Yes. Because those very serious men and women did not single out the MLS for their ire and frustration. They also spoke very seriously about doing away with the three-way agreement that is the foundation of organized real estate in the United States.
Meanwhile, FUD (fear, uncertainty and doubt) continue to plague most Associations at all levels. NAR completed its REThink Future without making any major changes; one should recognize, perhaps, that REThink was never intended to be putting anything into action in 2013. It was meant to study things and get feedback, and perhaps we’ll see some actual action in 2014 and beyond. Question is whether events will unroll slowly enough to fit into NAR’s timetable or not.
One surprise in 2013 was the clear sign that NAR has lost and is losing relevance in the halls of power. Zillow’s hosting of President Obama was not just a slap in the face of NAR, but a warning shot across the bow. When Zillow co-hosted a forum on the future of housing with speakers ranging from the Commissioner of the FHA and the action Director of FHFA, as well as sitting US Senators and major policy influencers… and NAR was not present… those in the know felt more than a small disturbance in the Force.
I didn’t predict that 2013 is when Associations would change wholesale, but that it is when we’ll see those changes start. I believe that was on the mark.
6. Consumers Take Center Stage: YES
I predicted and hoped that 2013 would be when the real estate industry’s focus turns squarely towards consumers, rather than towards the latest gadget or wannabe silver bullet. I think that has happened.
Although I’m no longer involved with HearItDirect, I was thrilled to see that they were on the main stage at Inman San Francisco this summer. That was followed by a number of regional events and corporate-sponsored events for HID bringing the consumer’s voice to the industry. And HID was but one company.
Houston Association of REALTORS continued its excellent consumer surveys, and brokerages, franchises, brands, and other organizations have decisively turned their eyes towards consumers, consumer engagement, and consumer research.
Technology remains important, of course, but it does appear that 2013 marked the point at which most productive agents and top brokers realized that technology is a tool, not a solution. They’re not quite as obsessively focused on tech issues anymore; they are, I think, becoming more obsessed with consumers and meeting consumer expectations. That’s a hopeful sign for the future.
7. Zillow Pulls Away: YES
I wrote in January that Zillow would really pull away from its competitors in 2013. That turns out to have been on the money in pretty much every way. We don’t have full-year results yet (they come out in February or so) but here’s Spencer Rascoff during the Q3 earnings call:
To put these stats into concrete numbers, at the quarter peak, we gained 27 million monthly total unique users year-over-year, which is the equivalent of adding almost an entire Realtor.com or adding 3/4 of a Trulia. This is based on internal reporting from competitors’ quarterly reports last week, including both mobile and web.
A big part of the performance is because Zillow is doing some serious buying of traffic with TV commercials. Here’s the last one they aired:
Yeah, tugs at your heartstrings a bit, don’t it? The comments to the video are illuminating as well.
Whatever the reason, a year ago in Q3 of 2012, Zillow was within striking distance of Move and Trulia in unique users, with 36 million monthly uniques vs. 24 million for both Move and Trulia. A year later, Zillow is at 61 million average monthly uniques for Q3 of 2013, vs. 35.3 million for Trulia and 28 million for Move. That is no longer “within striking distance” in the near term, although over the longer term, some of the competitive advantages of Trulia and Move may come into play.
The other key metrics, such as revenues and profits, are more mixed but in large part because Zillow is reinvesting a ton of profits into its marketing and technology strategies. As Zillow management has stressed over and again, they can decide at any time to stop putting money into growth and just start pocketing the earnings, and I take them at their word on that.
In any event, we’ll see what 2014 brings, but I do think I was correct on this one.
4.5 out of 7 in 2013, or .643 batting average… a solid outing, I’d say. But 2013 predictions weren’t quite as gloomy as the 2012 predictions, and I got all the real doom and gloom stuff wrong, so on balance, I think I’m pleased.
What does 2014 hold in store? Well, that’s another post I’m working on, but I suspect that we’ll see a few things come to pass that would have been unthinkable just a few years ago.
Happy New Year, everybody!