Newsletter 2: Futurepeek - guaranteed changes in real estate

Welcome to the second edition of PropTechBuzz newsletter. In the last edition, we explored Pete Flint's RealEstate 3.0 phenomenon.

In this episode, I pay tribute to another industry heavy weight Cameron Paine who came up with a penetrating peek into the future of real estate. I found his ideas fundamentally ground shifting.

Cameron is Vice President, Industry Relations & Head of Brokerage at HouseCanary. He has been recognized by Inman News as one of the "Top 100 Most Influential People in Real Estate," has served on the Board of Directors of the Council of MLSs, and is founder of the Broker Public Portal (now operating as a JV with Homesnap), residential real estate's most successful broker/MLS collaboration. 

I had the good fortune to speak to Cameron Paine

Guaranteed Changes in the Future of Real Estate

For this edition, I will focus on four of the ten trends from Cameron:

1. The metaverse mirror

Next to “location, location, location,” probably the most famous real estate statement is the National Association of REALTORS® Code of Ethics Preamble, “Under all is the land.” Until the invention of the internet, there was no other truth, yet now there exists a multiverse of online realms where unique, wholly owned digital “property” can be bought and sold using very real money. Largely unregulated and largely speculative, there is no “one” metaverse and each is in competition with one another. No one can know which metaverse(s) will become the de facto virtual real estate “world(s)” of the future, but the uncontested fact is that virtual real estate will be built, offered for sale and purchased. 

Equally inevitable is that buyers of metaverse real estate will seek professional help finding, valuing, and purchasing. There are already a few bleeding-edge brokerages working this space, so consider this the call to action to create a new designation to educate experts in this area.

2. Data hangover

Consumers love tech in their homes and internet connected “smart” devices are rapidly becoming expected features of properties. From smart doorbells, to thermostats, entire HVAC systems, smart blinds, refrigerators, and surveillance, smart devices are collecting mountains of data on the property they are in and the owners who use them. Apple, Google and Amazon understand that with connectivity comes the ability to share data between devices, which is why they set aside their differences and agreed to a standard network technology called “Matter” to improve connectivity standards. Despite the fact that they are in competition with one another, all three companies recognize that, at scale, cooperation on connectivity benefits them all. Sure, they could each try to dominate individual markets, but on a national scale, the costs of segmented operating systems, unstandardized data, and overlapping/partial data sets hurts the company and the consumer more than cooperation does.

Clearly, consumers are adding smart devices to their properties at a furious rate, which in turn collect massive amounts of information on the property and the consumer. 

There is a window of opportunity for organized real estate to come to terms with the demand for smart devices, develop rules around how to treat them as a part of real property, create guidelines for the transfer of ownership/administrator access, and standards on how to handle the data derived from these devices.

In the absence of the industry stepping up to define a path forward, the answers to these questions will be solved independent of industry guidance or control.

Inevitably, property-specific real estate data will be gathered, normalized and leveraged to take yet one more slice of the transaction and sell products and services back to the industry that originated it.

3. Specialized services

As consumer demand for real estate becomes more specialized to meet unique buyer requirements (think, “find me buy-to-rent opportunities in 30 states,” or “find me a waterfront home with a deep water dock, a safe room, on town water/sewer, at least 25’ above sea level and with smart solar panels”), real estate agents will begin to specialize in smaller and smaller market segments, filling a need for information experts in niche areas of their profession. Much like how, as our knowledge in various medical fields expands, so too do physician specialists to serve those emerging fields, real estate will inevitably move towards highly specialized brokerages servicing unique client needs across multiple markets.

As consumer demand for real estate becomes more specialized to meet unique buyer requirements (think, “find me buy-to-rent opportunities in 30 states,” or “find me a waterfront home with a deep water dock, a safe room, on town water/sewer, at least 25’ above sea level and with smart solar panels”), real estate agents will begin to specialize in smaller and smaller market segments, filling a need for information experts in niche areas of their profession.

4. Evolution of the property search

Think about doing a search on Zillow, realtor.com® or Redfin; they all basically work the same way and ask the same questions. The only real differentiators between them is the data (markets) they have access to and the superficial differences of their UI/UX.

But what if they’re asking the wrong questions?

A smart disruptor will change property search by asking different, more focused questions to better understand what is actually important to the buyer. Instead of starting with a limitations box (min/max, defined area, etc.), they will ask what is important to the buyer: Is security important to you? Newly renovated? Smart technology? 

By the way, kudos to Zillow for introducing a multi-location search capability which is an important step away from fixed criteria.

Indicating that “security” is important to a buyer can have multiple different answers including everything from a physically remote location with no neighbors, to a privacy fence or a top of the line security system—potentially critically important factors to a buyer that would not have been known preferences using current methodology.

Property search will inevitably evolve from the standard, cookie cutter, “one size fits all” buyer input form to a behavioral/personality questionnaire analysis of customer preference, matched by AI property analysis to search returns.

SPOTLIGHT STARTUP: BidMyListing

Spotlight startup is a regular segment where I share about a unique player in PropTech industry. The uniqueness could be around the business model or a new product or innovation.

BidMyListing, a new real estate marketplace, launched nationwide. For the first time real estate agents can bid on listing opportunities from homeowners who are ready to sell. Homeowners are matched with top agents in their area who bid for the exclusive right to list and get paid upfront when they select an agent.

Real estate agents now can utilize marketing dollars to directly purchase the actual listings versus simply hoping to generate a lead. Homeowners have the assurance of a dedicated real estate agent for their property - who is willing to invest in an exclusive right to list their home.

BidMyListing uses an example on its website of a Garden Grove, California, home listed at $470,000. The listing received 15 bids from agents, and the homeowner chose the winning bid of $1,267. BidMyListing collects 20% of the winning bid, and the homeowner gets the rest.

NOTABLE READS

• Future of AVMs by Jon Wierks

I came to know learnt about Jon Wierks recently who writes a lot about AVMs. Jon is VP, Analytics at First American. One of the AVM themes Jon has been writing regularly about is that AVMs are no longer one-size-fits-all solutions

• Funded Real Estate Startups That Went Public In The Past Two Years have lost 85% of stock value

PROPTECH FUNDING

• October 19, 2022 — Holidu, a vacation rental marketplace, raised a $104 million Series E and Venture Debt round led by 83North with investments from HV Capital, Northzone, EQT Ventures, 7 other investors.
• October 19, 2022 — Landis, a residential real estate rent-to-own platform, about which I mentioned in the last newsletter, raised a $17.5 million Series B led by GV with investments from Sequoia Capital, Second Century Ventures, and 4 other investors.
• 20th October 2022 - Getaway launches and closes $5.9m seed funding round
• October 4th, 2022 - Fresh off a €400 million fundraise, Casavo gets serious about expansion in France, acquires local proptech startup Proprioo

PODCAST EPISODE

I got to listen to Fatima Dicko, CEO of Sugar that is a property management software. What was unique about this offering was it devised a residential experience score that is an equivalent to NPS.