realonomics

REALonomics constantly pings. We bounce signals off objects located throughout the causeways of the real estate industry. We measure and interpret the returning signals, defining the shadowy shapes to see what model trends are emerging. We engage in measured prognostication, endeavoring to avoid hyperbole and reckless abandon.

Dating as far back as 1996 we ventured out on the limb of what was then described as a fringe lunacy model; the erasure of market boundaries followed by the demolition of bricks-and-mortar and the emergence of low overhead cyber real estate models, such as e-Partner. We predicted with accuracy the economic transformation that would overwhelm significant portions of the real estate industry. REALonomics continues to refer to the transformation as “The Third Economic Wave – the Consumer-Centric Era.”

Just as certainly as the flow of history produced a Renaissance in the south of Europe from the 14th – 17th centuries, REALonomics believes the ’05-‘08 market collapse (it’s finally okay for us to call it a “collapse”) will prove the genesis to usher in the more tangible features of an industry business model predicated on “new real estate model math™.”

REALonomics is ready to give you our predictions of changes that will and must occur to produce the momentum that will finally catapult us into La Renaissance. Like the Renaissance, the transformation of our industry will be dependent upon our ability to focus on the centrality of man (the consumer) as the economic modus for the rebirth of our industry.

Four movements will create the ‘08 Genesis of our rebirth.

1. Third parties will empower the consumer with free property information
2. Peer-to-Peer conversational platforms will connect buyers directly to sellers
3. Open market (borderless) brokerage models will emerge as a mainstay
4. Core service providers will redefine their labor and product models

Let’s elaborate on each, in order.

Third Party Property Information Providers. Our ‘08 Renaissance will be fueled primarily by an unleashing of accessible property information without the inhibiting confines and controls of local associations…this single movement will fan the flames of transformation and allow the creative juices to redesign an ailing industry with fresh new business models. Unfortunately, the transformation of our property information service model will not come primarily from within the industry.

Preference for Peer-to-Peer Dialogues. A new “hyper-consumerism” will continue to flourish as consumers increasingly choose peer conversations as a first course of action in the real estate transaction blueprint over the traditional consumer-agent dialogues of the former era. Community-based blogging (such as CityBlogUSA) and sub-culture information streams will arise, changing how we must make our presence relevant to the transaction and more importantly, our justification for payment.

Borderless, Brickless Brokerage. New companies will implement multi-state, even national open market brokerage models that lack the constraints of city and zip code assigned market models of the previous era. Some of these companies will have little or no experience with traditional real estate brokerage. This movement will help redefine the old franchise models into more regionally based enterprises.

Redefinition of Core Services Delivery Models. Further erosion of the profit points within mortgage and title enterprises will create what REALonomics calls “spin-modeling” and break down the larger corporate entities into smaller, highly effective competitive components that are assigned cyber market niches as their primary sphere for revenue development. Spin-offs of independent business entities will create new economic models for core service providers.

We are all going to be a part of our industry’s Renaissance drama. New dreams will be realized as 2008 becomes the Genesis for transformation.

Happy New Year from REALonomics!

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