Five Key Takeaways from Housing Industry Leaders
Five Key Takeaways from Housing Industry Leaders
What I learned this week from executives attending the RISMedia CEO Exchange in Washington DC
One of the powerful benefits of The Leadership Club™ is the sharing of insights, ideas and innovation during our weekly Monday Mastermind Coaching calls. This week we had Monday off for the holiday, which gave me an opportunity to fly to Washington DC and participate in the annual RISMedia CEO Exchange featuring leaders from across the industry.
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Over a dozen panels, presentations and power hours, plus countless conversations in the hallways and dinner halls - filled my notebook with both information and inspiration that the industry is headed in the right direction.
So in lieu of our Mastermind this past Monday, here are six of the most impactful takeaways from fellow housing industry leaders:
#1: We’re Moving Again
Notably (and refreshingly) absent this week was the heavy cloud of malaise and anxiety that has floated around the indusry for months. There was a lot of optimism in the air this week, and it was refreshing! The vast majority of executives I talked to were in the “we prepared and we’re doing fine” camp of the new industry landscape, and it was exciting to see them looking towards the growth opportunities that the rest of the year and 2025 will bring them.
In fact, one broker noted that in the last month, their average earned commission rate increased, something she attributed to her agents having become even better at articulating their value to consumers over the past six months.
Even people who noted the surprisingly large number of practitioners who remain unprepared (and oddly unconcerned) for the new landscape weren’t too worried: “The market will sort it out quickly” was the sentiment, especially because consumers were asking better questions, too.
Two numbers commonly mentioned this week may prove the point:
47% of REALTORS - or nearly 700,000 practitioners - did not close a single deal in the last 12 months
Active inventory continues to grow (about 15% higher than the same time last year, and 6% over July) while prices remain stable or rising due to plenty of demand (the first-time home buyer hit 37% of sales, only 10% lower than its five-year high of 40% in 2019).
As one executive said to me, “It’s not about the number of agents who aren’t prepared for the changes. It’s about the number of agents who are doing the deals that drives growth.”
In other words, gossip-guessing about how many agents might “leave the business” is meaningless, because nearly half could leave today and it wouldn’t impact sales of homes one bit.
Of course, if large numbers leave the industry, membership-driven organizations like Associations, MLSs, and prop-tech companies who charge “per person” will feel it, so it’s still part of the overall landscape. Again, optimism was high: As one leader put it, even if their Association membership dues doubled, they’d still be cheaper than what many professionals pay in other industries. Producing agents won’t blink. (It makes sense, considering my own situation: Membership dues for the national speaker’s association costs $950 and NAR remains at $156, which is less than 31 cups of Starbucks coffee annually.)
#2: Enough Bad Mouthing Going Around
I say this with both meanings of “enough” in mind:
There’s enough self-criticism happening in the industry to keep us demanding more of ourselves.
And we’ve had enough of the bad-mouthing that’s uninformed or petty, especially from the press.
Multiple panelists acknowledged the need to step up our game in areas like agent performance, quality controls (lots of talk about auditing), and reducing legal risks; but equally as many voices pointed out that some bad-mouthing is truly uninformed or merely making hay for attention.
Most people maintained a fairly even balance and tended to disregard the “Cassandras”.
One MLS executive pointed out, “If we are careless, we could lose many of the structures that make the industry effective, such as data quality and management; and once gone, it may be impossible to recreate.”
Almost everyone I talked to was strongly supportive of their MLS and vendors, and recognized the incredible burdens that were placed on them to “police” an agreement they had little part in. Multiple CEOs from nationwide organizations applauded the speed with which their MLS adapted their platforms, as well as massive re-training and customer support needs over the last year. “Everything we do is driven by our MLS data; we’d be nothing without it. There’s so much more there than just the compensation issue, and we’ve got to do a better job of advocating for it,” one executive shared with me.
At the same time, some called for the industry to take a good, hard look at how associations, MLSs, and prop-tech put their stakeholders’ interests first. As one CEO put it: Nobody in the business would run an ad or send out a mailing without their logo and name on it; yet the industry has let online portals do this to their own listings for years — and the absurdity must end. A similar sentiment ran through concerns for how REALTOR Associations will address member concerns in a future where members will be more critical and skeptical that their best interests are at heart.
On the filp side, lots of voices pointed out the need for greater effort — serious effort — in countering the negative narratives in the press and halls of government. “We’ve lost the PR game,” said one leader, “just like we lost the lawsuit.”
My contribution to that conversation was that perhaps the goal isn’t to win over everybody but to make sure we win over our clients when it matters most. “Everybody says they hate Congress,” I said looking out the window at Washington DC, “but everybody loves their Congressman.”
#3: Do Your Own Thing Well to Win
A strong theme in the discussions this week was the need to forge and follow your own path. This came through loud and clear in a motivating session by Hoby Hanna, CEO of Howard Hanna Real Estate, who made the case that the most effective companies have always been - and will continue to be - those that establish strong values, stick to their own vision, drive innovation in marketing and customer experience, and use leverage strong management. He noted that the best firms in the room practiced these principles, and have survived market cycles and brushed off disruptions that tended to be more like distractions.
As I whispered to a colleague during the presentation, “The companies that learn to swim, not just surf the easy waves, are the ones that win.” Multiple presenters reinforced this idea when talking about technology, the hot activity in mergers and acquisitions, or developing salespeople’s skills.
As Dermot Buffini noted, the companies that raise their own bar are the ones that perform “above the line” at all times.
One area in which “doing your own thing” was significant was the number of brokers who developed their own strategies — including buyer agency forms and auditing tools — rather than wait for third-party solutions. Many brokers, especially those from Anywhere Real Estate Brands, mentioned the advantages they had created by developing their own tools early, rather than waiting for Association committees to act.
Pursuing their own approach have them more time to prepare their agents, design their own consumer experience, increase transparency, and move fast to update new practices as the marketplace provides feedback. One broker said to me at dinner, “The industry is too slow to react when you wait for a committee. Some people didn’t get forms until the last possible minute. Many brokers left their company in the hands of a committee. Now they’re catching up, not to mention at potential legal risk of using tools made up by a collection of competitors once again.”
#4: The Silver Lining of Getting Smarter
As we talked about in TLC Mastermind Call #20, recent industry changes haven’t only created new practices - they’ve created new data that smart brokers are using to drive decisions in key operating areas like recruiting, coaching, cash flow forecasting, and value proposition.
One broker pointed out how their firm can now see how busy their agents are based upon their filed agency agreements, helping them coach and develop agents by using key metrics, such as the number of customers under contract, average earned commission rates, average contract duration, and projected cash flows. (In TLC Call 20, we also included a downloadable spreadsheet you can use to develop other metrics, such as measuring list-to-sale ratios by compensation source.)
More than one prop-tech firm told me how their engineers were focused on mobilizing new data points into performance dashboards for managers and company owners to gain greater insights into their business. “It’s like someone is shining a light on a whole part of the business - like 80% of some companies - that was hidden in the dark for decades. There are major implications for performance if we can reveal this data.”
Similarly, a number of prop-tech leaders were very bullish on the overall trajectory of the industry. Some said that the current market cycle presents the best time to invest in business intelligence and automation, especially while many firms are distracted by catching up with the changes or do not have the cash flow to invest in tech. Another innovator told me many clients were using the next 6 months to double-down on CRM, presentation software and back-office automation to create a “skills-based” competitive gap with competitors whose models had left practitioners without core skills needed to succeed in a normal market.
“We aren’t really recruiting so much as just answering the phone,” said one broker, “talking to agents who woke up one day and discovered the market wasn’t on automatic. They don’t know how to prospect and have no support. They want to know we have an office, with a real manager and can get the sales training they need to do their jobs. It’s about value, not commission, and our tech helps us do that.”
#5: The Other Innovations
One of the exciting trends I heard was how brokers aware innovating beyond technology, around the essential business models. One broker discussed how they were experimenting with developing teams to address succession planning. Another shared how they were looking at ways to address inventory shortages through commercial space reconfiguration. And repeatedly, brokers talked about the opportunity to make “essential” or core services (mortgage, title, insurance and property management) central parts of their business model. The “vertically integrated” real estate firm is back in a big way.
Many firms learned after the 2008-2010 financial downturn the importance of ancillary services to drive per-transaction profitability (and investment funds) as well as sustaining cash flow during slower markets (through property management and insurance services).
A big shout-out was made from the main stage to my friend Jim Fite of Century 21 Judge Fite, who wrote a wonderful book Success through a Recession, especially for real estate firms. Packed with practical tips on how to right-size your organization, maintain culture and keep people focused on growth even in tough times. Jim has been an annual guest in one of my leadership courses and this is a book everyone should have on their shelf.
One area that Jim has often cited, and many leaders at the conference this year reminded their colleagues, is the importance of an integrated and diversified business strategy.
The one-stop model is not only great for customer experience, but it’s essential (thus, essential services) to the ability of an organization to maintain revenue during even small business down-cycles, let alone major disruptions, increased competition and rising operational costs. It was very exciting to see the integrated services mindset be more common than “on the fringe” as it has been treated for most of my years in the business.
Overall, Optimism for the Future
It was a great week in DC with some of the finest leaders in the industry.
Professionally, I learned a lot about the positive plans people are making to capture the opportunities of the marketplace, not just overcome the challenges.
Personally, it was energizing to see a little more spring in our industry’s steps:
It wasn’t just the hugs and handshakes, but the sharing and encouragement from every corner of the business, that reminded me on my flight home today -
Success starts by believing we’re worth it — and once again, our industry is remembering just how worthy we are!
See you all on Monday’s Mastermind Coaching Call!
— M