Fifty-one years ago, if you were looking for a new home, you had to get in your car and actually go look for one. The National Association of Realtors (NAR) surveyed homebuyers in 1964 and found that about 40 percent said they read the newspaper for home listings, and 7 percent drove through neighborhoods looking for “open house” or “for sale” signs.
In 2015, my homebuying experience began with a visit to the app store. My wife and I downloaded apps, looked at photos, bookmarked homes we liked, and used Google Maps to tour neighborhoods.
NAR survey data shows that these days, more than 40 percent of consumers looked online first when trying to find a home. But even with all the technology at our fingertips, homebuying can still be a confusing process, and real estate agents are very much in demand—especially in a hot market like Dallas-Fort Worth.
“The real estate industry has a communications problem.”
The business of residential real estate—where empires are built on personal relationships—is being disrupted by the proliferation of social media platforms and the need for agents to move beyond the traditional flow of information governing their industry. Adding fuel to that fire is the widening generation gap. In Texas, NAR survey data suggests that the typical real estate agent is a white, female homeowner in her 50s who has attended some college.
“The real estate industry has a communications problem.”James Bohan-Pitt, Hippocket
“Realtors are getting older,” says Jessica Lautz, NAR’s managing director of survey research and communications. “The national median age for a Realtor in 1999 was 52. Today, it’s 57.”
The largest group of first-time homebuyers are millennials; they’re 25 to 35 years old with no children and a median income of more than $84,500—well above the U.S. national average.
“Typically, a millennial is studying the market and they’re on the cutting edge,” says Juli Bledsoe, a Dallas-based real estate agent with Century 21 Mike Bowman Inc. “They start looking for properties maybe as long as two years before they actually buy. They’re on all the major consumer sites and apps; they use multiple sources of information.”
(Full disclosure: Bledsoe is representing my wife and me as our buyer and seller agent. She does her homework, has years of experience, and does not laugh at my jokes.)
Bledsoe says she has to work to make sure she understands where and how prospective buyers are finding out about her listed properties.
“If I’m not aware of where or how they’re getting their information, I’d be doing a disservice to my sellers in advertising their specific properties,” she says.
But the flood of information isn’t always helping. NAR data shows that homebuyers who use the Internet as part of their searching process see more than twice as many homes and take more than twice as long to make a decision than those who stay offline.
Real estate agents typically reach the market via a multiple listing service (MLS), a private database of brokers sharing home listings in a standardized, predictable way. There are more than 800 MLSs across the U.S. and, in large regions like Dallas-Fort Worth, a few overlap with one another.
To access an MLS, a real estate agent must be a member of the local realtor’s association, like the MetroTex Association of Realtors, which was established in 1917. For agents, becoming affiliated with a real estate brokerage, like Ebby Halliday Realtors, allows an independent agent to get that coveted MLS access, along with technology support, administrative help, training, education, and so on—in exchange for a percentage of their sales.
With so many MLSs, real estate consumer apps are a mixed bag. Some MLSs feed limited listing information to various consumer apps and websites. But two different apps could get a different level of depth of information about DFW listings, and each one might compile and display the data in a different way. The younger, more Internet-savvy buyers are armed with more information from a greater number of sources than ever before. And a lot of it is wrong.
Agents still rely heavily on the MLS; they know it is directly sourced from the listing agents and brokerages. Also, MLS listings are complete with photos, sellers’ disclosures, detailed descriptions of the property, and accurate pricing information. Consumers, however, aren’t waiting to work with a real estate agent to get that information.
“The real estate industry has a communications problem,” says James Bohan-Pitt, co-founder and CEO of HipPocket, a Dallas-based real estate tech startup. “They’ve sat back on their laurels and everything has to go through a big database. That’s so 20 years ago.”
The apps, websites, and data sources are outrunning the brokerages’ ability to digest all the ways their potential customers are hearing about the markets they serve.
“Our firms are telling us that their biggest challenge is keeping up with technology,” says Lautz.
Real estate tech advisor Clareity Consulting ranks the 15 consumer real estate apps based on features, design, and user experience. The apps published by big, national brokerages such as Century 21, Keller Williams, RE/MAX, and Coldwell Banker were ranked lower than Zillow, Trulia, Redfin, and Realtor.com.
The winners in Clareity’s rankings come from outside the traditional real estate establishment. Zillow and Trulia are both owned by Zillow; Move Inc., a News Corp. company, owns Realtor.com. Redfin is a venture-backed real estate brokerage that both aids and competes with local real estate agents.
Social networks pose another challenge to DFW agents: There are too many of them to regularly feed with original, relevant content. They do, however, give agents a way to get their listings noticed quickly. Facebook Groups, like “North of LBJ Real Estate Friends,” a private group of more than 600 licensed agents, are popular spots for agents to post photos and notes about homes they have under contract that haven’t yet appeared in the MLS. But the work of promoting a property before and after its MLS debut is considerable.
“Agents don’t have time to do this if they’re trying to be out networking, selling, and taking care of clients,” says Claire Cavalieri, founder of Virtual Assistants Pro in Dallas. Cavalieri’s business offers agents a way to outsource the work of listing homes and handling online marketing to her, a licensed agent of 11 years. She handles the paperwork and gets the agents back out there selling.
The Heat is Still On
D Magazine’s July 2015 issue covered every facet of the DFW real estate market’s meteoric rise, and it doesn’t look like things are slowing much. More than 500,000 people arrived in Texas from other states and countries in 2014, making the state second in the nation behind Florida for total relocation activity. Dallas, Tarrant, Collin, and Denton counties are four of the top 10 counties in the state, with the largest net gain in out-of-state residents, according to the Texas Association of Realtors.
Area homes are selling more quickly, for more money, and in less time than they have in the past. In September, year-to-date sales of single-family homes were up 6 percent, dollar volume was up 14 percent, and the average price was up 8 percent compared to the year-ago period, according to the North Texas Real Estate Information System. The price-per-square foot of homes sold was up 8 percent, and the median days on the market was down 14 percent.
In a market this hot, finding listings before they hit the MLS is a key to staying competitive. Bohan-Pitt’s company, HipPocket, has built a social network and mobile app almost entirely on making pre-MLS associations.
“The realtor community should be able to generate leads and business with one another very quickly; they have qualified sellers and buyers,” he says. “But they’re simply not connected to one another.”
HipPocket also aims to provide a way for agents to feed the various social networks with their new listings so they’ll spend less time re-posting the same info over and over. Eventually, the HipPocket app could even feed an MLS, since the info is coming right from the agents. In the future, Bohan-Pitt imagines matching algorithms that pair a buyer’s needs with new listings. He also envisions the capability to connect one agent with others who have a track record selling the kind of properties that buyers are seeking.
With more than 700 licensed agents in the DFW area signed up, HipPocket has at least as much reach as several Facebook Groups. The tough part will be convincing already-stressed agents to pick up yet another social network and phone app.
There are other ways to find a home, though. Real estate agents often put a “coming soon” sign in the yard right after they agree to list a property, but before the home goes live in the MLS. Just like 50 years ago, you can still get in your car and actually go look for a home.