realonomics

The real estate industry has always tried to be a closed environment. The real estate industry has traditionally been a control environment. With few exceptions, our models have typically created an “us” and a “them” or, those who are insiders looking out and those who are outsiders looking in.

We are now facing the prospect that we are them and they are us! The once safe environment of our cozy aquarium is being invaded by “them” in droves. They are asking for all the rights to the environment heretofore granted to the “fish”…us. Or, they are proposing that we leave the tank and join them in a new form of existence.

In traditional business models, secrets are often deemed necessary and access to “insider” (the fish) knowledge is viewed as a threat. Free, open and unrestrained information is usually viewed as a corporate debacle and dangerous to the survival of insiders.

Our Real Estate Environments

The unraveling of any business environment starts at the fringes of the model and moves inward toward the epicenter. That is what is occurring in the real estate industry. The hairline cracks in our closed tank system are becoming open gorges where all that we have held sacred (secret) is spilling into the streets where the distinctions between “us” and “them” are being blurred by the Democratization of Real Estate.

Stefan Swanepoel recently posted the thought provoking question “Is the Future of Real Estate in Google’s Algorithm?” The mere addressing of this interrogative forces the industry to reexamine its operating models in the midst of a consumer-centric era.

REALonomics remains uncertain with respect to the ability of the real estate industry to retool itself for life in a new environment.

Learning to Live Life outside the Tank

My daughter once had a goldfish she affectionately named Nori. Nori lived in a small aquarium on the nightstand next to her bed. Twice each day Nori was fed from an entity outside the aquarium. Nori peered at us, we at Nori. Nori, without fully appreciating her situation, was living a life of total dependency on my daughter.

The analogy hardly needs explanation. We are Nori. Nori is us. My daughter is the consumer. She is one of “them” to Nori.

When it came time to clean Nori’s aquarium, we would all gather around and gently scoop her out with a small net, place her in a temporary environment, clean the aquarium and then return her to the environment to which she had become accustomed. Nori could not live outside the tank…her existence depended upon a certain environment.

Can the real estate industry learn to live outside the tank of traditionalism in a world where the operating rules are decidedly different? Can we live without the aquarium? Can we evolve from dependency on controlled isolation to the open world of life without gills?

Can we learn to live and operate the real estate industry and our local business models outside the tank where we have created and experienced a deceptive pseudo security?

Can we shed self-imposed gills and fins and dependency and control in favor of the freedom of an open sourced environment where tanks are the stuff of folklore and where our lungs can breathe the air of innovation and partnership with “them?”

Popularity: 16% [?]

Merrill Lynch downgraded their opinion of the financial strength of Countrywide Mortgage Corporation and in the process dropped the “B” word on the market…Bankruptcy. Second “B” word; Bummer!

Not so fast! The market bummer is going to set the stage for another cycle of broker/owner opportunities in the real estate industry ranging from new buying cycles, business consolidations, expansions and new brokerage development strategies.

REALonomics has said real estate company owners should re-tool their thinking and their models, engage in aggressive development of cost-effective market management models that utilize consumer-centric, transparent technology and finally, penetrate more new markets by recruiting Liquid Agents who are fluidly operating in multiple markets while tethered to broker/owners via Internet management.

What not to do, in six easy steps:

• Don’t diminish Internet investment, expand it;
• Don’t depend on your vertical market alone, go horizontal;
• Don’t stop recruiting, change agent profile to fee-based and experienced;
• Don’t ignore overhead, cut physical labor fast in favor of technology;
• Don’t retreat to yourself, absorb smaller firms in new markets;
• Don’t rely on transation revenue alone, develop ancillary revenue streams;

Do you believe the current market bummer is an owner opportunity? Comment here.

Popularity: 25% [?]