What We're Reading
T3 Insight Monthly Digest Readings
- Article available on Inman
With Zillow Group’s switch to displaying listings via IDX as a brokerage participant in MLSs across the country earlier this year, it began displaying IDX listings on Zillow and Trulia more prominently than those from other sources, such as FSBOs and other extra-MLS locations. And startup brokerage REX – which does not list its homes for sale in MLSs – has sued Zillow Group and NAR, alleging that the change on Zillow and Trulia disproportionately benefits MLS participants and that NAR rules that govern IDX policy create an anticompetitive environment. REX has been aggressive in advocating for changes that would benefit its business model, which centers on buying and selling homes outside of the MLS. It played a role in the U.S. Department of Justice’s lawsuit against NAR that led to a settlement in which NAR agreed to allow MLSs to publicly display buyer-broker commissions. The company also sued Oregon in December, alleging that a law that blocks homebuyer-rebate violates antitrust statutes. The increased scrutiny around the industry’s commission practices, and aggressive action from companies like REX, will drive increased conversation around long-time industry norms, as finance and technology continue to evolve the industry.
- Article available on FINMES
In 2011, the company began focusing on providing 3D tours for homes, but has since expanded to other industries, currently claiming the largest spatial data library in the world with over 10 billion square feet of space mapped. All parts of the real estate ecosystem are moving toward public markets to effectively compete as the industry matures. With IPOs and the relatively new SPAC route, companies have increasing options. Read the lead article in this Insight “Real Estate Goes Public,” for more details.
- Article available on GeekWire
Zillow Group continues to acquire components that power real estate’s infrastructure, and ShowingTime is another example; previous transactions include the MLS software platform Bridge Interactive, which it acquired in 2016, and digital transaction management platform dotloop, which it acquired in 2015. ShowingTime is Zillow Group’s 17th acquisition and its second largest by acquisition price, behind its $2.5 billion Trulia acquisition in 2015.
- Article available on Harvard Business Review
The return to physical offices will be one of the biggest challenges companies will have to make coming out of the pandemic. Leaders need to think carefully how to implement the transition of reintegrating their workforce into offices.
- Article available on Realtor Magazine
The first of a five-part series on MLS is a must-read for MLS decision makers. The focus is on transparency and data with a great mix of actionable and strategic items.
- Article available on PR Newswire
Fathom’s tech acquisition underscores the trend of large brokerage companies looking to bring more technology in house. This push to arm themselves with technology accents the brokerage trend of going public, which gives firms the access to capital to invest in their own platforms. T3 M&A (a division of T3 Sixty) facilitated this transaction.
- Article available on Inman
The Clear Cooperation Policy has rocked the industry boat, but the allegations of anticompetitive outcomes from the PLS and other pocket listing services always appeared to be a stretch. Organized Real Estate faces some compelling litigation – primarily that centered on the industry’s prevailing commission structure – but this is not in that class.
- Article available on CoreLogic
Hit the pause button before getting worked up about this sale. It is way too early to understand what the real impact, if any, will be on real estate brokers and agents. Stone Point Capital is also a major stakeholder in Lone Wolf Technologies so this acquisition may actually create some opportunity for synergies.
- Article available on Inman
As companies expand their purview of the residential real estate industry, rentals are a valuable opportunity both as a tool for small landlords but also as connection with consumers who may grow into homebuyers. Zillow shows it’s building out a strong, multifaceted residential real estate ecosystem service.
- Article available on Inman
The heat is turning up on the way homebuyers and homesellers pay commissions to their agents. Stiff competition from discount brokerages, the recent lawsuit and settlement between the U.S. Department of Justice and NAR around commissions and the other pending large class-action antitrust lawsuits related to commission are not only contributing to a downward trend in commission rates consumers pay agents, but could shake up the long-standing tradition of sellers (and their agent) setting and paying buyer’s agent commission.
- Article available on The Real Deal
The company will join a crowded field of large public brokerage companies when it officially lists. The industry is waiting anxiously to peak into the company’s performance when it files its S-1 as this document will reveal more details about the finances behind one of the fastest-growing companies in the industry’s history.
- Article available on Realtor.com
Already a years’ long trend before the pandemic, low inventory remains one of the driving factors in real estate throughout the country. It is pushing prices to all-time highs,forcing average days on market down and, overall, acting as the limiting reagent on a housing market ready to explode with activity.
- Article available on Businesswire
The consolidation trend in real estate continues. The great influx of capital into the industry over the last decade has forced a professionalism, an economy of scale and a sophistication that makes it harder for regional brokerages to compete on brand, technology and services.
- Article available on Inman
This is the second bump in a money-raise to increased demand in 2020. In June, it raised $550 million after initially hunting for $400 million. Based on a strong 2020, as profiled in the 2021 Swanepoel Trends Report chapter (read this now on T3 Intel here) that analyzes the company in depth, the firm’s performance has improved and investor demand has consequently gone up.
- Article available on RISMedia
NAR came up big for members in 2020 and McGhahn, who took over from Bill Malkasian in 2020 as NAR chief advocacy officer, has her team ready to roll this year.
- Article available on United Real Estate
Large companies continue to get bigger as the industry continues to mature. While the releases did not make clear (nor the companies), these were acquisitions by the look of it. United Real Estate operates an agent flat-fee brokerage model in which it charges agents set fees in lieu of a commission split.
- Article available on Business Insider
The fast-growing company says the split — which will reduce the cost of each share — will make owning shares more accessible for more agents and investors. EXPI shares rocketed from a $7 last March to over $100 last week. An analysis of eXp was included in the 2021 Swanepoel Trends Report chapter (now available online at T3 Intel).
- Article available on Freddie Mac
While mortgage rates remain at all-time lows, house prices have continued to rise as inventory across the U.S. is low. Rates likely will not drop much lower if at all, so buyers remain active and refinances common. A more balanced market will likely emerge when Covid-19 uncertainty settles.
- Article available on Vendor Alley
Founders Greg Robertson and Dan Woolley believe merging with a larger tech company is a good move given real estate’s increasingly higher financial and tech stakes. Since company founder Lorne Wallace sold his interest in the company in 2015, Lone Wolf acquired zipLogix in 2019 while its institutional investor Stone Point Capital bought out fellow investor Vista Equity Partners just last month. The residential real estate technology space is undergoing significant consolidation – Constellation has already acquired some 20 brands, MoxiWorks acquired Imprev last year and now there are even talks about giant CoreLogic fending of acquisition interest from credible players.
- Article available on NAR
The real estate market continues to be blazing hot, which gives real estate brokers and agents ample opportunity to invest, innovate and grow their businesses into 2021. While uncertainty looms, the bold have immense opportunities.
- Article available on Crunchbase
The residential real estate brokerage ancillary business space remains a huge opportunity as these services represent a critical component to the end-to-end home transaction. Many large brokerage companies are pursuing the incorporation of ancillary services and, if you haven’t yet done so, take the first step in 2021.
- Article available on HousingWire
HousingWire, already a respected media name in housing, construction, and mortgage news, now expands its news, rankings and events capabilities into residential real estate brokerage. Inman, the residential real estate brokerage industry’s leading media company, has a strong, new formidable competitor.
- Article available on Yahoo Finance
The move to Nasdaq trading brings yet another public company to the real estate fold. It also will now allow more transparency into the iBuyer business model, providing an accurate, real-time look at the model’s evolution and its financial challenges and successes.
- Article available on Inman
2020 has presented many challenges, but a renewed focus on increasing diversity is one bright spot. We expect to see similar moves by other companies in the real estate space, including T3 Sixty’s own Real Estate Apprentice, which aims to help increase diversity in the real estate profession.
- Article available on GeekWire
Startups and incumbents have been making an all-out effort to streamline the transaction in recent years. One of the chief hurdles involves stitching together the processes ancillary to the transaction – such as mortgage, title and insurance — which has spurred a bunch of innovation, including iBuyers and startups like Tomo and larger players like Zillow Group and Opendoor. A true digitized transaction, from start to finish, is still years away, but the hunt is on in earnest now.
- Article available on Bloomberg
First American Financial spun off its technology and information division in 2010, creating CoreLogic. Listed on the New York Stock Exchange under the CLGX ticker, CoreLogic is a multibillion dollar financial, property, and consumer information, analytics, and business intelligence company. Matrix, its MLS software, is the most-used MLS platform in the U.S. with 850,000 users. With continued consolidation, class-action lawsuits and the Clear Cooperation Policy, the MLS industry itself is also undergoing a reengineering.
- Article available on Inman
A strong real estate market fuels opportunities for all brokerages with strong leadership and an appetite for growth. We expect to see more expansion and consolidation efforts in the months and year to come.
- Article available on Realogy
Aided by a strong performance in its ancillary business, as well as a blazing hot third quarter across the board in real estate, Realogy’s restructuring efforts seem to be paying off. See the detailed Realogy analysis in the “2021 Swanepoel Trends Report” out December 7. Order a copy here.
- Article available on Zillow Group
The hot third quarter in real estate helped buoy Zillow’s performance, as did a slow ramp-up of its cash-intensive iBuying program Zillow Offers.
- Article available on Realtor Magazine
This is one of the first announcements by NAR as part of its commitment to improve diversity in the residential real estate brokerage industry. More expected in the not-too-distant future.
- Article available on TechCrunch
This version of IPO, termed “IPO 2.0” by some, represents an increasingly popular way for growing companies to go public without the scrutiny that comes with a months-long road show in a traditional IPO. With six-year-old Opendoor’s jump to public trading on the NASDAQ stock exchange, real estate has yet another public company.
- Article available on The Real Deal
The iBuying business model continues to evolve, and one of the nation’s largest, most powerful brokerage companies jumps into brokerage in an effort to make it profitable. Expect new marketing and advertising to give this momentum an added boost.
- Article available on Broker Public Portal
The Broker Public Portal and its official website Homesnap have made some strides in recent years to become a popular consumer real estate destination but has struggled to gain the prominence it hoped. The popular, smart Rand gives the initiative a shot in the arm.
- Article available on Bloomberg
Real estate has roared into the third quarter with no signs of slowing down. The Federal Reserve has pushed mortgage rates to all-time lows, below 3.0 percent on 30-year fixed-rate mortgages. This appears to have buoyed the real estate market. Rates will likely not go lower, so maybe it’s enough to hold the market while the rest of the economy recovers.
- Article available on Howard Hanna
As the industry continues to mature, the big get bigger. This years’ long trend in the making continues with this acquisition. Look for others in 2020 and 2021.
- Article available on The Real Deal
This addition to the real estate startup space from startup vets reveals just how much white space remains in the industry for innovation.
- Article available on Inman
This lawsuit and those related to it loom as potentially large change-agents in the industry. As chronicled in the 2020 Swanepoel Trends Report chapter on the subject, the lawsuits could change how buyer’s agents are compensated. However, any direction or certainty is still years away.
- Article available on The Real Deal
Ancillary business gives traditional brokerages access to valuable revenue streams that tie into their core real estate transaction models. Compass, like many other newer brokerage companies, says it is building an end-to-end real estate platform, which Modus will play a part in.
- Article available on Keller Williams Realty
This corporate organization changes little in the day-to-day operation. Josh Team and William Soteroff, respectively, remain president of Keller Williams Realty, Inc. (USA operations) and Keller Williams Worldwide, KW’s international division.
Liebert, however, is a game-changer. He brings more than 30 years of experience leading customer-driven transformations and developing strategic, operational and process excellence within retail (AutoNation, 24 Hour Fitness, The Home Depot, Circuit City), financial services (USAA), and industrial (General Electric) organizations and is the first executive of this caliber to join KW. A public offering in the coming years now looks like a very viable probability.
- Article available on The Real Deal
The largest city in the United States is certainly not bulletproof and has recently had to deal with a significant number of challenges including excessive traffic, limited space, delivering clean water, global warming and the pandemic. Now, a growing number of people want to live elsewhere.