By Brian Summerfield, Online Editor, REALTOR® Magazine
I’m back in Chicago after a weather-filled week spent in New York for Inman’s Real Estate Connect event, and I’ve had the long weekend to digest the tips, trends, and techniques discussed there. If I had to sum up the entire experience in a phrase, it would be this: The changes in consumer behavior over the past few years are nothing short of revolutionary.
Houston Association of REALTORS® CEO Bob Hale told a story about a man who went into a Best Buy store, found an electronics item, looked it over, then checked the price of that same product online using his smartphone. He found it was $40 cheaper on the Web, so he bought it there and left the store empty handed. A couple of days later, the item arrived at his house.
Here’s something else: According to REALTOR.com President Errol Samuelson, 2010 was the first year that more consumers found the house that they ultimately bought than their REALTORS®.
These two examples — and a few similar ones I heard at the conference — point to a transformation in how consumers make decisions in the marketplace. One aspect of this (which admittedly affects retail more than real estate) is the fact that they are no longer bound by geography in their choice of products. As recently as a few years ago, if I wanted to buy a certain product at the best price, I was mostly limited to shopping stores a few miles away from my house. Of course, I could have taken my chances on eBay or Craigslist (outside of that, e-commerce sites like Amazon were much more specialized), but that might have been a risky proposition, especially when considering higher-end items. But now, online commerce is a much less dicey and often more cost-effective approach.
Looking at the issue more broadly, though, we see that consumers have much greater access to data from myriad sources, including reviews of products and services, price comparisons, and industry and market analyses. This access gives today’s consumer much more leverage in their dealings with professionals ranging from real estate agents to used car salespeople. (Not that I’m, um, likening these two professions with each other.)
The bottom line? More data and more choices mean less power for sellers, who — in the past — had much more control over each. The question for practitioners is: What is your value proposition for consumers in this environment? How are you differentiating yourself in the toughest, most competitive market ever?
A few random observations from Connect:
▪ Who thought that putting the CEOs of Trulia and Zillow on the same panel would result in a productive discussion? At least the spectacle of them sniping at each other was entertaining.
▪ The most important metric for the highly trafficked REALTOR.com? Engagement, according to Samuelson. “We’re focused on how people come to the site, but we’re also interested in how people use the site,” he said. “The core value of REALTOR.com is this really big, engaged audience.”
▪ David Carr, culture editor at The New York Times, was effusive in his praise of the value of home ownership. “It’s the only way a salary man like me can attain wealth,” he said. That’s highly debatable, of course, but it was a noteworthy claim, coming from him. (Side note: While Carr was a very interesting, charming speaker — maybe my favorite of the event — did anyone else think he had an absent-minded professor quality about him? Just sayin’.)
▪ In his remarks on multiple listing services, 7DS Consulting Partner Rob Hahn made a point that probably applies to anyone in real estate: the pool of viable consumers is flat at best, and may continue to be for some time. He says there are three basic ways to deal with this issue: raise prices, cut costs, or grow your footprint. Of these three, what approach are you taking?