My Bold Real Estate Industry Predictions for 2025

I am paraphrasing the great Yogi Berra when I say that predicting the future is easy, but getting it right is a bit trickier. Many of my colleagues have offered their prognostications in a market that is the perfect storm of black swans, judicial actions, economic uncertainty, and so many competing interests that there doesn’t appear to be any easy fix for the professional challenges we all face. In the face of all that, I am 100% certain that everything I predict will be accurate.

Here we go.

1. In 2025, the vast majority of humanity will continue to prefer living indoors to other alternatives. That means that virtually everyone we come into contact with will be worth conveying our value as an advocate when the time comes for them to change their address. The timeframes may be longer between moves, but it is still going to be essential that we remain top of mind by being a helpful resource.
2. In 2025, Real Estate will continue to be the largest transaction of most people’s lives, as well as their biggest asset. That also means that real estate professionals will continue to be absolutely necessary, because transacting the largest asset of your life as a DIY project will still be ill-advised.
3. 3rd party industry entities that rely on agents for their revenue like the Zillow group and Costar will further distance themselves from disintermediation because they know this business is far harder than it looks.
4. NIMBYs will continue to vociferously object to new development, and the 7 million housing unit deficit the USA faces will not shrink, and likely increase. I include local municipal governments in that number, who have passed ever more restrictive zoning laws to artificially engineer their communities to be insulated from any departure from status quo. Any displacement that causes their own sons and daughters to not be able to afford to live where they grew up will be dismissed as not wanting to work hard.
5. People with their nose buried in legal theory will continue to deny that real estate broker fees are set by market forces, and market forces alone. I have been active in the field continuously since 1996 and I have never seen any model that offers better results for less money. I’ve also watched an elephant graveyard grow, populated by those who attempted. And they didn’t die because their competition conspired to marginalize them. We weren’t even paying attention to them. That will not change.
6. Average commissions will not go down and in many sectors may increase. This is the lesson of History. According to data from RealTrends, broker commissions have had a not-so-curious inverse relationship with the ease or difficulty of the housing market since 1991. Simply put, average commission has grown in harder markets and lowered in “hot” markets. This is because when the going gets tough, consumers place more value in the skillset of their agent.
7. Buyers will continue to fund all proceeds distributed at closings. The sellers (or their attorney or title company) will still continue to write the checks that create the optic of the seller paying, but every cent comes from the buyers. Buyers will eschew paying anything like a broker fee separately, and prefer to finance it from proceeds as they always have.
8. More trees will die. As government and judicial intervention continues, the industry will adapt, yielding more paperwork. Fair housing exposes in the news, lawsuits and Department of Justice actions, and other adverse occurrences will be the catalysts for more forms and disclosures for agents to present to consumers in order to transact business. At current count, my agents have to present consumers with NY State Agency disclosures, fair housing and anti discrimination disclosures, audio recording statements, lead paint for the majority of our housing stock, and representation agreements that are close to 16 total pages. That does not include the mandated Property Condition Disclosure Statements that are now required from sellers. This also does not include co-ops, which have enormous paperwork involved on top of every other one mentioned. I’m not lamenting it, only predicting it.
9. Uninformed, tone deaf people will decry real estate as a poor investment. They will cite stocks, mutual funds, and other securities without acknowledging that these instruments do not furnish their owner with any housing. You cannot live in your 401k. It’s too drafty. Real estate may behave like an investment, but it is first and foremost shelter.

Admittedly, these are not bold predictions, and as a matter of fact some of them are tongue in cheek observations about human nature. However, they also contradict many of my colleagues’ conspiracy theories, especially about third party websites. No matter what changes in the real estate and housing space, agents and brokerage will still play an important, pivotal role in representing clientele. As long as people buy and sell property, brokerage and the expertise that comes with it will be something consumers want, need, and will pay for.

Originally published on LinkedIn