Growth in many of the tech sectors may be dampened, but we are seeing accelerated growth & interest against the backdrop of softening market conditions and mounting legal defeats for the traditional industry. First, there’s increased consumer pressure: Macro headwinds including rising interest rates, and volatility in the global equity markets will weigh on consumer demand for housing. Plus, the sustained growth of alternative models like Opendoor means the traditional brokerages will be forced to compete in a far more innovative way as consumers demand more from brokers. Next, there’s Inflation: Real Estate Brokerages are a people-heavy business. to operate with low margins that have continued to shrink in the last two years. With the recent spike in labor costs that look unlikely to abate anytime soon; Brokerages will need to become more efficient through technology solutions to stay in business. Lastly, Litigation: The status quo for brokerage commissions appears to be coming to an end. In the last 30 days, multiple federal cases appear likely to result in decoupling real estate commissions, including the announcement that David Boies of BSF has become lead counsel in one of those cases. All of this means that the role of buyer agent will become significantly diminished and listing brokerages will be responsible for managing significantly more of the transaction workflow and responsibility by 2023. While many software companies have focused on segments of the transaction, it will be those companies that seamlessly manage transactions in one place who will grab meaningful market share.
[Podcast] Three 2022 Proptech Drivers
- Post author:Tim H
- Post published:May 26, 2022