The real estate industry is in the midst of a tumultuous period of change, with emerging technologies challenging established business models and forcing newcomers to the industry to embrace the disruption and digitization of norms with gusto. Nowhere is the end of traditional real estate being made more obvious than through the decline of brokerages, with the real estate brokerage model that’s endured for so long finally coming under intense heat.
Is the decline of brokerage really the end of traditional real estate, as so many are predicting, or will old ways of doing business re-assert themselves? Here’s everything we know about the future of real estate, and why traditional models may permanently be in the rear-view mirror.
What does a real estate agent actually do?
The real estate industry has been facing a harsh reckoning lately; after all, an unusually large drop in home sales has baffled many established agents while leading others to question the health of the industry’s future. Furthermore, impressive digital technology is fundamentally changing the way that property is listed, toured, rented, and sold. Whether it’s the rise of virtual reality touring, the realities of the gig economy that make home ownership difficult, or a million other developments, it’s easy to see that the real estate industry is in the midst of extensive change.
All of this bodes the question of what real estate agents actually do in this day and age. The role of the real estate broker in modern times is increasingly specialized, as industry professionals are coming to realize that a one-size-fits-all approach to brokerage simply doesn’t work in this day and age. The decline of brokerage has been brought about by many things, but the increasing compartmentalization and specialization across the real estate industry is effectively forcing all brokers everywhere to re-examine how they go about earning a profit.
Real estate agents who specialize in some of the most expensive housing markets in the world are finding themselves called upon ceaselessly by clients in need of new homes in burgeoning areas, for instance, forcing those agents to forget about non-specialty, luxury properties elsewhere. In other parts of the industry, traditional brokers have seen their role transform into that of a data analyst who must view many potential housing listings and comb through them for a few attractive, juicy listings that may seem ripe for the taking.
Perhaps it’s the rise of new generations that’s forcing the traditional real estate industry to part ways with some established norms. After all, young people don’t want nor need the same style of housing as their elders, and changing methods of communicating and sharing information are reshaping how new home buyers survey and discuss their possible options before making a final commitment.
Fewer agents are going to be needed
If one thing’s clear, it’s that the decline of brokerage marks the end of traditional real estate because fewer and fewer agents are going to be needed as time goes on. In cities like Hamilton, digital disruption has made a mark already. Real Estate Hamilton is increasingly listed online, bypassing traditional brokers. This is because the real estate industry, like so many countless others, is enduring digital disruption that includes the automation of formerly mundane work processes. Whereas brokers were once enlisted to deal with the extra work around the real estate office, in the future such work will be automated and handled by clever algorithms, enabling brokers to spend more time on the crucial elements of the job and speaking face-to-face with clients. This, in turn, will spell out a less-populated industry dominated more by tech-savviness than people.
The rise of nontraditional brokerages that are vacuuming up young industry professionals with the promise of new ways to do business are also ensuring that the next generation of real estate workers will have an entirely different outlook on their industry. This slow but steady cultural shift won’t produce immediate results, but its long-term consequences will be nearly unrivaled in terms of how much it helped bring about the end of traditional real estate as we currently view it. While many analysts focus on the way nontraditional brokerages change the home buying experience, few of them are parsing the immense ways it will cause an industry-wide cultural shift that will echo for years to come.
Established ways of doing business are proving to be lackluster and insufficient for generating serious profits in the 21st century. That’s why the decline of brokerage is unlikely to abate anytime soon, and traditional real estate is heading for the door. Real estate professionals who are concerned about the future of their industry should pay more attention to the rising stars across their market who are relying on non-standard ways of making a name for themselves, as these are the pioneers of the future. Traditional real estate is still lingering around, but the decline of brokerage is slowly yet surely changing the face of real estate forever.
