Real Estate Trends Report 2008

Real Estate Trends report 2008This annual report by Stefan Swanepoel is a US based report but aside from one of the key trends regarding the MLS (Multiple Listings Service), the content and implications of these 10 Trends are as relevant to NZ as they are to the US, UK or Australia. The commonality is the fact we all operate in a commission based market place and are all entering a cyclical downturn. I have summarised the key trends from the report and added my take on the implications of these to the NZ market.

#10 Shattered Glass – Women, the Youth and Minorities Step Up to leadership Roles

This trend speaks to the opportunities opening up to segment customer groups through representation of minority groups in the population – we are a rich and ethnically diverse country and will continue to be so. In the US this speaks to their growing Hispanic influence. Equally the appeal to the new generation X&Y as well as women’s role in property buying need to be thought about in target marketing of real estate.

Turning to the internal structures in the industry – the influence of Generation Y. The strength of women in positions of seniority in the real estate industry. The considerable age skew of current agents in the industry; all of these are really challenging issue – but equally rewarding opportunities for anyone looking to build a career in real estate.

The take-out here is the need for the industry to change – embrace change and exploit change. Key questions for NZ real estate would be around targeting the varied ethnically diverse population as well as capturing and retaining a younger base of future agents to better serve the next generations.

#9 Thought Reform – the DNA of a new breed of Real Estate Professionals

This trend is so timely. With this changing market the skill set of a competent and professional individual is so key. What degree of additional education will be needed to better understand the needs of the consumers of the future? – “Agents are no longer order takers and are looking to acquire skills to build their business” – Bill Shue, President, RealtyU.

This trend is so clearly facing all of those in this industry as I wrote recently on the Unconditional blog “A tough year ahead for real estate agents“.

Clearly this issue of continuing education and the application of CPD as part of the proposal in new Act is high on the attention of policy makers, the education providers and REINZ such that to be looking ahead to a long and successful career in real estate requires a clear strategy for continual training and learning.

#8 Clash of the Titans – Power brokers flex their muscles

It will come as no surprise that what is being seen in the US in terms of polarisation of the market to the major groups and franchises has been witnessed and continues to be witnessed here in NZ. The report examines 10 of the identified Power brokers who are not purely based on scale; but on metrics such as growth, innovation, internet strategies, industry profile and consumer awareness. Reviewing these key players in the US market highlights some of the indicators of who in NZ may be the Power brokers of the future locally.

#7 The tug of war has started…again – The evolving and changing real estate business model

This trend has such relevance to NZ as we have witnessed this year a number of challenges to the traditional real estate business model the majority of which have been focussed to the costs of service. We witnessed the rise and fall of The Joneses, in areas of the country 1% players have established a foothold and other models will continue to appear. The US equally has had these players in one form or another as well as more challenging models involving lead generation operators feeding off the MLS system and pure play internet operators. One thing is certain this industry will continue to see challenges to the established business model and smart operators will be looking for the clues as to how to adapt and grow.

#6 Gone in 60 seconds – Identity theft and data security runs rampant

This trend is global and needs to be thought about by every operator in this industry whether it is email lists or online transactions and office PC’s – security is everybody’s concern and needs vigilant application.

#5 In search of productivity – Growing market share on a slippery slope

As is a key theme for this year’s Trends report the outlook for the real estate market in 2008 is bleak, and from research carried out at the end of 2007 the top 5 issues facing agents in the US are:

  • Too few buyers
  • Unreasonable price expectations by sellers
  • More informed consumers
  • Too many agents
  • Subprime loan fallout

Substitute “credit squeeze and high interest rates” for subprime in this list and I bet you that would be the top 5 in NZ today. In searching for productivity gains for agents the focus on the opportunity of maximising technology and the use of the internet should result in some of the following strategies advocated in the report.

  • Google should be a part of every real estate professional’s online strategies and placing high on organic search results has become a fulltime job rather than a part time dance.
  • As the majority of consumers are shopping online, prime, expensive retails locations are no longer critical. The dollars saved can be better spent in enabling the consumer to find you online.

How can I disagree with these recommendations – how can you?

#4 Four weddings and a funeral – The changing borders and boundaries of MLS

Now this one is not of true relevance to NZ, having said that whilst we do not operate an MLS in NZ the underlying issue of data management and the provision of comprehensive information is important. The market of consumers searching for real estate is seeing an ever more informed consumer, and as an industry this insatiable appetite for information pertaining to property and neighbourhoods needs to be addressed so the agent can remain truly relevant in the future.

#3 The new digital currency – Livestock, Land, Gold Oil and now Information

For real estate, information is key and online is the arena in which real estate operates – the past couple of years have seen enormous changes in the online real estate space – to quote the report “web traffic has replaced walk in traffic”.

Print media spend by US real estate companies are dropping and online investment growing.

This will be seen in NZ in the next year – it will happen. It is hard to swallow as the industry of real estate and newspapers have coalesced so closely for so many years that separation will be so hard – this brings me to my favourite quote of the report.

“I can’t find a single large real estate brokerage firm in 2007 that says print advertising really works….but I can easily name dozens who still spend the majority of their ad budgets on newspapers. It’s like a chain smoker battling lung cancer, while still smoking two packs a day.” – Sami Inkinen – founder and COO of www.trulia.com

#2 Pop goes the weasel – The housing bubble tightens its grip

It is called the subprime crisis and the flow on to the US economy and the world economy is so well reported that this trend does not need to be detailed. Suffice to say that as the US has lead this trend it has yet to show any indications of bottoming out. The ripples spreading across to NZ have been felt in the past 4 months and will rock our boat for the rest of this year, as to 2009 I am not going to stick my neck out any further – you know your local market best and you will see the trends earlier than I will.

#1 Two worlds; one industry – The evolution of online communities and networks

The web as we have seen in this report and in our daily lives in real estate has begun to transform this industry, what is key is understanding the evolution of the web from browsing to searching to sharing. The concept of web 2.0 is something I have been discussing, presenting and advocating for the best part of 9 months with the implementation of social media, this is the future of real estate marketing.

The trend is towards blogs as the platform for real estate agents to profile themselves – to demonstrate their “subject matter expertise” and to create meaningful dialogues with past present and future clients. We have provided the Voices blog platform to enable any agent to create a blog – to enable them free of charge to embrace this trend and demonstrate to a global audience and to their clients down the road their skills, knowledge, expertise and passion for their chosen career.

Social Media traffic on realestate.co.nz

The value of the Unconditional blog to the realestate.co.nz website is already well established. As part of a comprehensive approach to social media on realestate.co.nz incorporating the Forum and the Voices blog platform traffic to this area of the site continues to grow exponentially hitting 9,000 unique visitors in June.

This is just the start of the evolution of online communities and networks. I saw a great quote from an Australian real estate presentation last month from a speaker from Deloitte:

“Traditional agents will not be replaced by technology…they will be replaced by agents with technology.”

July 14 2008 02:37 pm | Blogs and News

8 Responses to “Real Estate Trends Report 2008”

  1. On the Road » The Mighty Waikato on 16 Oct 2008 at 3:09 pm #

    […] again, we had a prize draw at each presentation for a copy of the 2008 Swanepoel Trends Report.  The lucky winners were as […]

  2. On Target » Real Estate Trends Report 2009 - Early bird special on 24 Oct 2008 at 5:31 pm #

    […] part of the recent presentations round the country I have been sharing insight into the Real Estate Trends report of 2008 authored by Stefan Swanepoel. As you will recall we hosted a visit by Stefan back in July and had […]

  3. On the Road » A Shining Star in the Coromandel! on 14 Nov 2008 at 2:54 pm #

    […] usual, we had a prize draw at each venue for a copy of the Swanepoel Trends Report 2008.  Congratulations to the following […]

  4. On Target » Step up and build your skills on 15 Dec 2009 at 6:39 pm #

    […] focused on the need to build your skills in real estate marketing and online marketing. As was identified by Stefan Swanepoel earlier this year, there is an emerging new breed of real estate agents – skilled in managing […]

  5. On the Road » It’s Good to be On the Road Again! on 15 Dec 2009 at 6:56 pm #

    […] So thanks again to all those who attended, particularly those who came from further afield.  Congratulations to the following prize winners, who each received a copy of the 2008 Swanepoel Trends Report: […]

  6. On the Road » Hoarse in Hawke’s Bay! on 15 Dec 2009 at 6:57 pm #

    […] A number of people who attended the presentations, requested copies of the graphs which were used.  So, the presentation is now online on Slideshare, where you can download it and use the graphs if you wish. Thank you to all those who came along and congratulations to the following prize winners, who each received a copy of the 2008 Swanepoel Trends Report: […]

  7. On the Road » Glitches in Gisborne! on 15 Dec 2009 at 6:57 pm #

    […] Thank you to all those who came along and congratulations to Henare Porou of PGG Wrightson, who was the winner of the 2008 Swanepoel Trends Report. […]

  8. On the Road » Rotorua on 15 Dec 2009 at 6:57 pm #

    […] Thanks to those of you who came along and feel free to bring a friend next time! Congratulations to Sue Baker of the Professionals and David Gearon from PGG Wrightson, who won copies of the Swanepoel Trends Report. […]

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