The times are changing in the real estate world, and according to the 2017 Profile of Real Estate Firms [1], Realtors agree.
Using survey results from 6,073 executives at real estate firms across the U.S., the National Association of Realtors [2] (NAR) found that 50 percent of firms believe competition will increase in the next year from nontraditional market participants, up from 43 percent in 2016. For comparison, only 15 percent of firms thought competition would increase from a brick and mortar firm.
The increase could be because of the possibility that companies like electronic commerce giant Amazon [3] might be coming into the real estate referral business. Amazon gave a preview of their “Hire a Realtor” page during the July 11 Amazon Prime Day, during which users can get Amazon items on sale. Though the relatively uninformative page was taken down the next day, news of it slightly rattled the industry with Zillow [4] stock decreasing from $46.15 to $44.54 per share, and NAR commenting [5] that the permissions were not granted to Amazon in order to use the trademarked term “Realtor”.
NAR CEO Bob Goldberg said there is no question on whether the industry is changing—it’s doing so rapidly. In order to stay relevant, NAR is, “establishing a new Strategic Business and Technology group” to focus on solutions that “ensure the role of the Realtor is essential to the consumer.”
Despite the emerging of nontraditional market participants and growing concerns of housing inventory, for the third year in a row majority of firms are looking optimistically to the future regarding industry growth. With that being said, expectations have decreased somewhat from 65 percent in 2016 to 62 percent in 2017 on increased profitability in the upcoming year.
To see the full report, click here [1].