May of 2007 may go down in history as one of the most important and exciting moments in the history of the American real estate industry. The approval, by the National Association of REALTORS® Board of Directors, of the National MLS Gateway project marks the beginning of a dynamic new era in American residential real estate. This project, in connection with a number of other matters introduced and approved during the meetings, will create a whole new market force.
The steps taken by NAR are brilliant given the real estate market and community that has been evolving in the country over the past several years. This period has been marked by the emergence of three key factors within the national marketplace. The first is the slow but steady growth of the Internet as the center stage of commerce and social networking in the United States. The second is the creation and sustained power of a whole culture of third party entities whose whole purpose in being is to use the Internet to get between the local REALTOR® and their customer. The third has been the almost clinical refusal by many, if not most, local REALTORS® to recognize the first two dynamics.
Given the immense, almost tectonic, pressures created by these forces it was only a matter of time before, like the movement of earth bound plates creating earthquakes, events would occur that would forever chance the shape of the residential real estate marketplace. NAR’s decisions reached in Washington have the clear potential and logical mission to effect that reformation.
Traveling around the country during the past month one could not help but notice how few within the industry took notice of either the specifics of these decisions or their potential benefits. At the risk of trying to summarize a project as far reaching as this it seems fair to suggest that there are at least three elements to the new industry configuration.
• Within the very near future there will be a national MLS, an entity that will create a substantial, although as yet undefined, sphere of influence
• The national MLS will create a vehicle through which selected players will exponentially increase their market power
• The existence of this vehicle will create a significant vacuum within the residential real estate marketplace that will drive major shifts in market power and influence especially in unprotected local markets
Even the potential of these three elements should be enough to cause every broker in the United States to take the time necessary to understand both the project’s universal ramifications and, most importantly, their impact upon local markets and local REALTORS®.
The basis of the local real estate market is elementary; it is “location, location, location.” By its very definition real estate is a local activity. The American community exists because REALTORS® have created a local market hub mechanism (called the MLS) that provides the stability and dependability that is required for citizens to safely own, buy and sell real estate in a stable environment. Without the MLS the real estate market, and the American local community as we know it, would not exist.
Local REALTORS® contribute the time and effort to maintain the MLS and track the local market elements that surround it. The arrival of the Internet has not changed this central truth. What it has done however is to create a new set of rules under which markets of all types can be controlled. Like any market dynamic the only thing that stood between the Internet real estate player and success in market control was having the consumer accept these new rules. By and large that has happened.
Now the rules are changing. Accordingly today there is no way win the competition for the real estate market unless local REALTORS® play by the new Internet rules. End of story. The only question left if whether or not the local MLS authority also understands this reality and is willing to play by the new rules.
Accordingly the opportunity created by last month’s events is not defined by what rules to play by, but rather how well one plays by the rules. Great players distinguish themselves by finding and exploiting the fallacies and weaknesses in their competitor’s game plans.
With respect to those powers that are now arraying themselves to assume control of the local real estate market the weaknesses is glaring. In the natural course of things there is no such thing as a national real estate market! Attempts to create such a market arise from either the economic realities of marketing on a national scale or, alternatively, a deep and abiding belief that local markets will never “get it” and must be abandoned in favor of national control. In other words the concept of a national real estate market is an aberration whose existence depends upon local markets continuing to ignore the realities of an Internet centric marketplace.
The events of the past month should put local brokerage communities on notice that it is time to transition their markets into compliance with the new Internet rules. Communities that take this step have nothing to fear from the dynamics of market nationalization. Local brokers who refuse this simple opportunity are doomed.
The solution for local brokerage communities that wish to succeed are simple. In fact at least three such communities are already distinguishing themselves in the current competition. The brokerage communities of Missoula, Montana (livemissoula.com), Houston, Texas (har.com) and Fort Myers, Florida (snoopzone.info) are demonstrating that in all of real estate there is no stronger force in marketing than brokerage communities that work together to provide the Internet empowered consumers with the content and advantage that they seek.
These three brokerage communities have focused their energies and creativity on the development, promotion and institutionalization of powerful public and/or community websites. These websites provide consumers with the content that makes for a great real estate experience (after all who knows the local market better?). They leverage the natural alliances that exist between the brokerage community and the greater community.
No national force can even come close to the success and impact of local brokerages and consumers working together to create a stronger community, through home ownership, driven by an efficient and Internet wired local real estate market.
Don’t miss this moment in history. Understand your local market and work with your community to make it stronger. Your bright and sustaining future, and that of your hometown, will grow from the focused efforts of those in your own neighborhood.
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source: frogpond.com
