- Ongoing growth of new business models
- Battle for adjacent services
- Disruptors from within the industry itself
DelPrete – 2021 to be “insane year” for innovation in real estate industry
Mike Del Prete, internationally recognized as an expert and thought leader in online real estate tech and lecturer at the University of Colorado Boulder, just shared his virtual presentation titled “Five Megatrends of Real Estate Tech” at the latest Inman Connect.
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Right off the top, DelPrete said that 2021 will be an “insane year” for innovation within the real estate industry.
DelPrete’s Five Megatrends of Real Estate Tech in 2021
We’ll begin with DelPrete’s last megatrend first and go from there.
- Asymmetric Disruption – “I think this is the biggest trend we’ll see flowing into this year,” said DelPrete.
- DelPrete believes that disruptors from within the industry (he calls them “incumbents”) and those from “outside” the industry will flourish in 2021
- He points to Zillow as an incumbent disruptor that could lose $600M and still be at the top of the industry’s heap. Some companies, “a company that doesn’t have to make money,” simply play by a different set of rules
- DelPrete said, “…it’s like playing baseball against a team that gets 100 outs per inning.”
- New Models (iBuyers) Here to Stay
- iBuyers survived during the pandemic despite deals sinking -50% compared to 2019. DelPrete thinks this indicates iBuyer model has solid fundamentals.
- With investors buying in to public offerings such as Opendoorand Compass, investors are willing to support innovation.
- More and more competitors coming in to this market niche
- Agents as Employees is about Control
- “DelPrete said, “Hiring these folks as employees gives the company a higher degree of control in the whole transaction; they can standardize the customer experience and get better economics.”
- Portals Moving Closer to Consumers and Deals
- iBuyer services, agents as employees and acquisition of mortgage providers all make US-based portals closer to the consumer AND closer to the deal
- Portals now serving as lead qualifiers confirms that portals are developing closer relationships with consumers
- Look at European examples such as Germany’s Homedayand Britain’s Purple Bricksas examples of companies directly competing with agents for customers
- Battle for Adjacent Services
- Accumulating or launching adjacent services such as mortgage and title is a way to compensate for losing money in other parts of the business
- Look at Opendoor launching listing services to compensate for its low mortgage attach rate
- iBuyers, particularly Zillow, are buying small percentages of homes they’re offered by consumers
- Companies essentially saying, “…We can do everything.”
- DelPrete saying that iBuying is a great source of lead generation.“The new Zestimate is lead generation. ”
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Thanks to Inman and Mike DelPrete.
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