Tech trends rock real estate world
Citizen journalism, social networking and user-generated content are transforming the industry.
NEW YORK (CNNMoney.com) -- Home buyers and sellers have already seized much of the power once in the hands of exclusively of real estate professionals. But they're about to get stronger still.
The changes to the real estate industry have come fast, with listings and valuations tools widely available for free on the Internet.
Now, according to many of the participants of Real Estate Connect NYC 2007, a conference devoted to outlining the changes facing the industry, the industry is on the cusp of another technical revolution, one that revolves around that Time Magazine person of the year - YOU!
Real estate blogs, which have been around for a few years, exploded in popularity during 2006. These sites provide a wealth of unvarnished opinion, truths and half-truths about towns and neighborhoods all over the country - the inside dirt on restaurants, schools and crime.
"The rules have fundamentally changed," said Brad Inman, the host of Real Estate Connect and publisher of Inman News. "Social networking is lifting real estate and in the next 12 months it's going to overwhelm real estate. It's been happening since Craig's List started but it's only now coming to a head."
In the past, the real estate industry always had a gate-keeper mentality.
"Brokers prospered by not giving out information," says Dottie Herman, CEO of New York based broker, Prudential Douglas Elliman. "Clients came to them for information. This takes the industry to a whole different model."
Technology has made it very simple to start up, run and contribute to Web sites and that has let loose a flood of information that's increasingly well organized.
"Now we're seeing the aggregation of these conversations. [Consolidators] are taking feeds from lots of different blogs and outing it in one place by zip code or neighborhood," says Inman.
Take Outside.in for example. This two-month old Web site collects blogs from more than 3,000 neighborhoods in 55 cities. Posters can write about anything, including the quality of new real estate listings, how good the schools are, hot restaurants, even individual real estate agents.
These sites encourage content from readers. Don't like the spumoni at the local gelato house? Vent on line. Angry that your streets are going unswept? Become an Internet scold. Curious about that derelict house around the corner? Ask your blogger neighbors what they know about it.
Another site, Homethinking.com solicits reviews on agents. Like Yahoo! autos, where Accord owners can rank their satisfaction with their car purchase or TripAdvisor, where travelers can rate hotels, Homethinking posters are able to rate their real estate agents.
All this openness can make the marketplace much more transparent for consumers. It enables them to know market prices more accurately, to engage the most professional real estate agents available and to learn about individual towns or neighborhoods much more intimately and expeditiously than they could in the past.
As the new technology comes more into play, realtors will have to adjust. Many of the web sites have taken over some of the traditional services that real estate agents once provided.
It may be a difficult period in some markets. Not only are sales down, but alternate business models are making inroads into their business. For sale-by-owner sites, discount or fee-for-service brokers and brokers who pay buyer's rebates all may gain traction.
Inman says that real estate professionals have two choices when it comes to confronting the changes wrought by technical advances: engage it or pretend it isn't there.
It's easy to guess what route he recommends.