If you’d like to catch a video replay of this Connect Now session, and access the other 25+ hours of video content from Connect Now, tickets are still available. Click here to access.
A wave of disruptive changes, including migration out of major cities and vertical integration among companies, are coming for the real estate industry right now, Redfin CEO Glenn Kelman argued Wednesday.
Kelman laid out his vision for the near-future of the real estate business during a presentation at Inman Connect Now, an industry gathering that was held entirely online thanks to the ongoing coronavirus pandemic. The outbreak was a recurring theme during Kelman’s comments, and among other things he said it was driving massive growth in the number of consumers considering a move out of big cities.
“The listings that are getting all the traffic right now are in small towns,” he said. “We have tripled the growth rate for traffic in these small towns.”
Unsurprisingly, this trend appears to be driven by the rise in remote working, with many people apparently concluding that “if you can work from home why would you pay the tax” to live in a larger city, Kelman explained.
“Almost all of our customers are considering a relocation,” he added.
This trend poses a challenge for Redfin specifically because the company has tended to focus on larger cities and has a more minimal agent network in small towns. But Kelman said that overall, big brokerages should benefit from migration out of cities because they’ll be able to coordinate agents for consumers across diverse geographic regions.
“That’s a challenge for everyone but it’s also going to be a massive opportunity,” he added.
Glenn Kelman at Inman Connect Now Wednesday. Credit: Inman
The trend toward migration is already apparently in full swing, but the coronavirus pandemic is reshaping the industry in other ways as well. Virtual tours, for instance, aren’t going away and interactive 3D media is going “to be the new listing photograph,” Kelman said.
“One in four listings in major metropolitan areas have these scans,” he said of interactive imagery like the kind produced by Matterport.
The growth of interactive imagery is going to have an array of impacts on the industry. For one thing, it will become a challenge for multiple listing services, which Kelman said need to become repositories for three-dimensional imagery in the same way they have for still photographs.
And he said it means consumers are connecting with agents later and later in their homebuying journey.
“They’re going to challenge the economics of the transaction,” he added.
Additionally, Kelman believes the real estate industry is poised to see waves of consolidation as companies vertically integrate their services. He compared the process to shopping for food: While some consumers might visit a baker and a butcher and a fish monger, most simply get everything they need at one grocery store.
In a similar way, Kelman believes many consumers would prefer to have all of their real estate services in one place.
“We see a wave of consolidation ahead where brokerage, title mortgage, and iBuying are all put together to give the customer more choices,” Kelman said. “It’s just going to be much more efficient when we work together.”
Glenn Kelman at Inman Connect Now Wednesday. Credit: Inman
Though the coronavirus pandemic was a recurring theme during Kelman’s remarks, he also brought up the killing of George Floyd and the ensuing protests that have engulfed cities around the U.S. The events have highlighted the need for greater racial parity, including in the real estate industry, which Kelman said is about 80 percent white compared to only about 60 percent of the U.S. population.
Kelman also said he wants to increase Redfin’s diversity at the executive level, and hopes the broader industry improves on that front as well.
“We just need to do better,” Kelman said. “I hope we can do better.”
If you’d like to catch a video replay of this Connect Now session, and access the other 25+ hours of video content from Connect Now, tickets are still available. Click here to access.
