As a leader in the real estate industry and a growing influencer in the technology world, Qualia is always looking for new ways to engage with and learn from other companies in and out of the space. With our Executive Insights Series, we’re doing just that -- inviting the most influential executives to sit down and talk about changes and trends that impact the real estate industry.
Recently, Qualia CEO Nate Baker sat down with Paul Levine, former President and COO of Trulia. He’s currently the Managing Director at Sapphire Ventures, LLC, a growth-stage venture capital investment firm. Baker and Levine spoke at length about the real estate industry and its future, including the core home buying process, the rise of iBuyers, fragmentation within the industry, and more.
Changes in the Real Estate Transaction
The last few years of technological innovation within the real estate industry have brought improvements to the process of finding a home, connecting with partners, and finding loans. Only recently has technology started revolutionizing the closing process for all parties involved.
“Over the last 10-20 years, the title space has been slow to adopt technology,” said Levine. “But things are starting to change in that regard.” Since the industry has historically been fragmented leaving transaction parties siloed, the closing process for buyers, sellers, realtors, lenders, and title companies has been difficult.
iBuyers and the New Real Estate Industry
One of the topics that Baker and Levine discussed in great detail was how iBuyers are starting to impact the real estate transaction. A number of companies are starting to bring new technology to the buying and selling process.
“As a seller, you’re feeling so much anxiety and uncertainty about what you’re going to get for your home, when it’s going to close, and the idea of moving out. Asking yourself, ‘What will I get for my home?’ and ‘How long will it take?’ - that process is so daunting,” Levine said. With that in mind, he believes the clear and certain value proposition iBuyers provide home sellers is strong.
With new iBuyers starting to pop up more and more, Levine says it will be interesting to see how the market shakes out. If a seller gets more than one offer from an iBuyer, will company brand trust be the most significant factor, or will it wind up being a pricing battle alone? Levine also noted that Zillow may have an initial advantage due to the high volume of consumers already visiting their site to obtain Zestimates.
Ultimately, though, the industry likely will not wind up with too many iBuyers. Levine thinks that highly saturated buying markets will eventually consolidate to two or three iBuyers instead. Since that type of business is capital intensive, he suggests that there are only so many companies that can buy in.
What’s Next for Real Estate?
Much of the real estate technology in the last ten years has focused mainly around the front-end of the process, like searching for a home online or understanding home sales prices in a city. However, new software platforms now also focus on the transaction itself, and Levine suggests that there will be a lot of interesting innovation in the space.
Levine also notes that local real estate brokerages are facing change as well. “In a world where people are on their phones looking up listings, know what they want, and want to text an agent in seconds, having a branch on the corner of Main Street is less relevant.” Brokerages are starting to adapt to the current digital age by utilizing technology that allows them to connect with clients and partners quickly and efficiently.
What does Levine view as the next big space in the real estate industry? “I think rentals are actually quite interesting. And as home prices in the country keep appreciating, owning a home becomes less and less affordable, and rentals become such a more attractive option for many people.”
Watch the full interview below to hear more from Baker and Levine.