Are Realtors the next casulty of the Internet, like Travel Agents before them?

in Blog, LocalNa8ion.com, News, Reviews & Rants This article was originally published by Julian Gude on The Remarkable Blog from exceler8.com

Short on time? Here's the bottom line. Short on time? Here’s the Bottom Line!

Please note that this article was written prior to Local Na8ion’s re-launch and as such the content may not be relevant for today’s audience of local marketers.

Most people know what the Internet did to local mom and pop Travel Agents. Most are out of business now or they’ve radically reshaped their service or value proposition. Why did this happen? Because there was a much better way to research and book travel online. No only that – consumers could save a lot of money.

Will Realtors end up holding an empty bag? Photo credit: Fishlamp
Will Realtors end up holding an empty bag? Photo credit: Fishlamp

The formula for the web disrupting an existing business model is well known.

  1. lower cost
  2. more control in the consumers hand
  3. better value proposition

When you combine all three, you have a category killer like we saw with local travel agents.

There’s an interesting related story here from the local advertising space where the advertising vehicles of old, like print newspapers, are on a parallel path to that of the local travel agent. More and more, realtors, builders, and rental properties are advertising online. Why? Because they know their customer base is steadily moving there – and it’s not a subtle pattern. The customers and advertisers are showing up online in places like Craigslist.org and Googlebase.com and the online versions of their local newspaper.

Here’s how the numbers look as of June 2006 when Borrell Assoicates, a leading consultant in the local advertising space, released some new figures.

Borrell Associates - June 2006 - graphic by eMarketer
Five years ago, online Real Estate ad spending was 3.5% of the total – by 2010 it will be 32.1%

According to an article titled Real Estate Classifieds Moving Online on eMarketer today, which reported on findings published on Classified Intelligence:

“Additional findings from Classified Intelligence also confirm the changing dynamics of the real estate advertising sector. In a survey of more than 100 real estate agents conducted with RealtyTimes.com, 58% of respondents indicated they are raising their advertising budgets this year, but the majority said they would be spending the bulk of their money online on their own Web sites. Free Web sites such as Craigslist and Googlebase are also attracting an increasing proportion of real estate agents over traditional mediums such as local print.”

The web has been eating away at all areas of print classifieds for quite some time now, but the real estate industry, and local realtors in particular, have been able to stay ahead of the game by continuing to monopolize the MLS listings. But that’s starting to change. Today, as tools like Craigslist and Googlebase become more popular, the MLS becomes less and less relevant. That’s key. The MLS boards and their member Realtors can continue to keep a stranglehold on their last vestiges of ‘control’ but not for much longer. The old guard that fails to adopt new practices will be left holding an empty bag, wondering where all their clients went.

Maybe it’s time to get another kind of license soon?

What do you think?

[tags]Real Estate, Online Real Estate, Realty Services, Local Online Ad Spending, Local Online Real Estate Spending, eMarketer, Borrell Associates, Googlebase, Craigslist[/tags]

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