Welcome to another edition of an annual tradition, in which I go back and grade myself on my predictions made at the start of this year. My track record so far:
As was the case last year, I’m hoping to be wrong more often than not, because my 2012 Predictions, written on January 2, 2012, were kind of on the doomy and gloomy side of things. Let’s take a look, shall we?
Well, happily, we start off with a kind of a miss. I had predicted that the real estate market would continue to decline in 2012, due to global economic factors and the Presidential campaign:
So the middle-of-the-road boring prediction is that we will see neither dramatic collapse nor dramatic improvement in 2012. Instead, we’ll continue the slow and steady decline that has been the story over the past couple of years. This is particularly likely because 2012 is not only a presidential election year, but one that has been billed as “the most important election ever” by most of the commentariat. Once the GOP primary is over, I expect both candidates to propose nothing dramatic and do nothing shocking that could upset the markets. Sure, we’ll get minor policy statements from both the GOP candidate and from Obama, but it seems rather unlikely that we would see Fannie/Freddie shut down, or really significant QRM regulation promulgated, or the mortgage interest deduction eliminated. Not in 2012, not with the political situation the way it is.
Well, I think I was right with this one. But thankfully, I was wrong overall:
The hope today is that the smart guys in NY, DC, Brussels, and elsewhere could somehow manage the decline, reassure the markets, and keep things lurching along for a while. We’ll see if that effort is successful in 2012. My guess is that it will be moderately successful, preventing all-out panic and bank runs, but that we’ll continue to see banks being very skittish, economic growth being sluggish, unemployment not improving at all, and general malaise throughout 2012.
What happened instead is that due to low inventory,
moneyprinting stimulus by the Fed, and investor activity, 2012 was a banner year for many real estate markets. I mean, yes, we haven’t seen all-out panic, we haven’t seen banks loosen up the lending, economic growth is sluggish at best, and unemployment remains high… but the housing market appears to have recovered off of its lows. At least, according to various media sources and busy real estate brokers around the country.
Bidding wars came back in 2012 in many markets. Home prices were up 4.3% in the last twelve months, according to Case-Shiller. The shadow inventory did not flood the market. So all in all, 2012 was a major up market, not a slightly down market.
This one was a controversial prediction back in January, and I’m glad that events haven’t really played out as I predicted:
However, the logic of “you earn a customer, you get to use my listing data with the customer”applies with exact same force to IDX, a policy that has been the source of so much drama over the past few years. I know I’ve begun hearing some opinions from strong listing brokerages that just like the portals bring a fork to a potluck, so do the buyer brokerages who do nothing but use IDX to rank high in Google and bring precious few listings to the table.
I expect that by November, at next year’s NAR Annual, we’ll start to see a small movement away from IDX at least in some markets where certain brokers have market power.
Well, there were some conversations, and a few as yet non-public moves were made, but as of the NAR Annual deadline, we haven’t seen any major brokerages move away from IDX. I’ll happily take a No on this prediction.
In January, I wrote that thanks to tablets and 4G, mobile will finally arrive, at last, after many years of industry expectations of a mobile future. Well, it isn’t clear whether tablets and 4G are the reasons, but there is no denying that mobile is where the action is today.
Zillow, for example, announced that as of Q3 of 2012, more than a billion homes were viewed on its mobile platforms. On weekends, more than 40% of its total traffic comes from mobile. Trulia and Realtor.com are also reporting record growth in mobile traffic — often as high as 300% year over year. I wrote about these stats in the second half of this post.
When the three big portals start reporting 2012 full year results sometime in 2013, I think we’ll see that 2012 was absolutely, without question, the year when mobile really broke through.
I honestly think I make this prediction every year, and every year I get it wrong. Here’s what I wrote:
I believe that 2012 will see the first mainstreaming of the broker-centric model. I think it is quite likely that one of the companies active in the syndication/IDX debates — a HomeServices of America company perhaps, or someone like Shorewest, or a Leading RE company — will be the first to really implement a broker-centric strategy. Such a company is likely to have dominant market share to try it, but upon trying it, they will find that they do not lose market share, do not lose agents to competitors, but increase their profitability and ultimately gain market share by leveraging superior capabilities in technology and by managing consumer relationships centrally with a strong brand.
Maybe brokers don’t think about these issues at all, and are too busy just trying to stay afloat. I don’t know. But whatever the reason, I don’t think anyone can say that 2012 was the year when we saw broker-centric models go mainstream with large brokerages embracing it.
It may be that some have started to put systems into place to do just this, but if so, they’ve kept it under wraps, and we haven’t seen any major push by any non-boutique brokerage yet. So I’ll say No on this one.
Ah yes, the top comment-generating prediction of 2012. In January, I wrote that by the end of 2012, Keller Williams would overtake Coldwell Banker as the #1 brand in real estate by agent count:
It is a bit of an out-on-a-limb prediction, but it seems to me that if the trend continues, KW should gain a bit, while Coldwell Banker will lose a bit. Supposing KW gains 4% and CB loses 4%, at the end of 2012, we should have KW with about 83,000 agents and CB with about 82,500. There’s a decent chance that KW ends the year as the largest real estate company.
Well, when I wrote that, CB was boasting 86,000 agents vs. 77,000 for KW. I just checked the About Us for both companies, and as of today, CB is claiming 83,000 agents while KW is claiming “more than 80,000″. What’s more, in late September, Mark Willis, the CEO of KWRI, set forth the goal of being #1 in agent count by the company’s big annual conference in March of 2013:
In closing, Willis made perhaps the boldest statement of the entire speech – one that had the audience energized for Family Reunion 2013. “It’s 150 Days until we will meet again at our annual convention,” he said. “And it is our intention to announce that Keller Williams Realty is the No. 1 real estate company in North America.”
Well, my take on this is that a savvy business leader like Willis wouldn’t publicly set forth a goal like this if he didn’t already know that they would get there. He doesn’t want to get on stage at Family Reunion and say, “Yeah, so… remember that goal I set out in September? We failed.” Talk about a downer at the big conference.
So we’ll wait for March to hear the announcement/confirmation of my prediction, but I’m pretty confident that I got that one right.
Yeah… no. Maybe I’ll stop making this particular prediction, since either (a) no one in real estate has the kind of cash to do Big Data Watson-style, or (b) anyone with that kind of capital doesn’t want or need to do it.
Either way, there’s no doubt that we haven’t seen any sort of AI or expert system or Big Data system deployed in real estate in 2012.
In January, I had this vision:
All of the above should work towards the beginning of a transformation in the MLS: the backbone of the residential real estate industry. I believe we start to see it take root in 2012.
It is possible that the beginning of a transformation in the MLS is happening. Something like the new Spark Platform is a development that bears watching. But overall, we haven’t seen any real transformation in the role and purpose of the MLS in 2012. The seed may have been planted, but it hasn’t sprouted yet.
Finally, I get the kind of grade I’ve been looking for in recent years. My three year average is now .509 — still better than half, but just barely. We’ll see if 2013 brings that average up or down.
Thanks for reading, thanks for all those who participated in the numerous conversations here on Notorious in 2012, and to everyone, Happy New Year!