Swanepoel Trends Report Overview

By |2018-02-07T16:00:40+00:00February 7th, 2018|Main category, Reports|0 Comments

Each year, I review the Swanepoel Trends Report. It’s a nod of respect for Stefan Swanepoel and the work that he does. His reports deliver exactly what they intend. They provide a few hours of reading that will stimulate you to absorb various perspectives and reflect. I have a full library of the reports and find myself pulling them off the shelf throughout the year for one reason or another.

The real estate industry is a living thing that is fundamental to society. Like the history that comes before it, we watch change happen and are influenced by our years of experience. Each year, Swanepoel scribes a snap shot though his lens. It’s an annual chapter that is added to a lifetime of work. There is no right or wrong. There is no good or bad. The facts are right, and the authorship is sincere.

For me, Swanepoel Trends Report is like reading a chapter of history. My 15-year-old daughter is learning about the revolutionary period in Europe. She is learning that there was a time when all property was owned by noble blood with absolute rule. Then some non-nobles were able to acquire property and inherited the right to vote as a property right. After the revolutions continued, business owners were afforded the right to vote. And so on and so forth to modern day.

My most profound moment of reflection for me came from the Forward, as written by Redfin CEO Glenn Kelman. He reflected on how he had a revelation one day that as much has he and his company have sought to be different than traditional real estate, Redfin’s heart and pulse is not really much different than that of any other brokerage. Redfin has developed a center of excellence around delivering consumers a property search solution that they love. It’s an ambition of many firms. They coupled their online efforts to a brokerage business model that incentives both the consumer and the real estate agent. They have grown a very nice business, one of the largest in America. They cooperate with MLSs like every other broker. Redfin has not disrupted real estate or ignited a trend. They do their thing and they get their piece of the market. It’s an outstanding piece of writing.

It was appropriate to have Mr. Kelman kick off the trends report. There is a lot of material in the report about pioneers who are trying to do something different – like Redfin set out to do so many years ago. The same fear that Redfin instilled in the industry at the time of their launch is felt again today. In many ways, despite their success, they continue to struggle today. Surely, if many of the startups in the Trends Report stay in business for a decade, they will be continuing to struggle. The fight is real. Real Estate is not an easy business. Be different as you like, the struggle will continue.

Compass and so many others are going to need to fight hard if they want to emerge from a cash burning, business building, startup into a profit driving business that delivers a return for their founders and investors. It’s fascinating to watch. Compass is driving customers by hiring agents who already have them. The Reports takes a deep dive into the exploding world of mergers and acquisitions, where the 2017 investment of $2 Billion in VC money came from and who the beneficiaries are. It analyzes a large number of modern discount brokerages including Purplebricks and Redefy and all the key Direct Buyer models (as known as iBuyers) such as OpenDoor, OfferPad and Zillow Instant Offers – a whole genre of new companies opening their doors with the expectation that brokers should own their inventory.

It is engaging to read the Swanepoel Trends Report to contemplate these remarkable business experiments. I tend not to wonder too much about how they will unfold or pass judgement on their ambition. I try to understand what new companies are endeavoring, and juxtapose it against the things WAV Group learns from working with large firms, technology vendors, and multiple listing services.

For sure, disruption will happen in the real estate industry. Real Estate businesses need to understand the trends, play the cards on the table, and manage a way to stay in the game. The players with the tall chip stacks today may very well go all in, and either double their stack tomorrow, or get drawn out on the river and go broke. Regardless of their outcome, you must to play your hand, but at the same time observe how the others play.

At the LeadingRE conference last week, I was sitting at the awards banquet guessing on who would win awards. The award for outgoing referrals every year is Weichert. Do you think that Weichert would have accomplished that goal of online dominance if disruptors had not stimulated them? Jim Weichert built an amazing company by blending his sustainable core business with online excellence and by remaining innovative.

The Trends Report covered well over 100 companies this year but not everyone is included the report every year, and that is ok. The Trends Report doesn’t attempt to cover everything but rather to provide fire starters to ignite your thoughts. The Swanepoel Trends Report is great because there is always something that you take away from it that will light a pilot flame somewhere on the stove-top of your business.

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