THE SELF-SERVICE FUTURE….In last week’s NYT Sunday Mag, Freakonomics authors Stephen J. Dubner and Steven D. Levitt proclaimed real estate agents an endangered species:
Think back for a moment to 1999. Travel agents still roamed the earth in vast numbers. So did stockbrokers. But their business models were being blown apart, largely by the Internet. The new market for do-it-yourself online securities trading lowered fees so drastically that a full-price stockbroker could simply no longer earn a living. Travel agents were shoved aside once the Internet gave customers the ability to book their own trips ? and when, perhaps more damagingly, the airlines decided to stop paying the travel agents’ commissions.
The Internet is a natural repository for the sort of data that drive the real-estate market. New sites like zillow.com let anyone try to figure out (if imperfectly) what his home is worth; sites like craigslist.org allow buyers and sellers to easily find each other. As those services and ones like them become more popular, it is hard to imagine that the market will allow Realtors to maintain their hefty commissions.
There will always be some home sellers who prefer full-service, full-fee agents, and a handful of these high-end agents will undoubtedly thrive (just as some full-service travel agents and stockbrokers still thrive, except they are now called “travel counselors” and “financial planning specialists,” respectively). But more and more home sellers, armed with data from real-estate Web sites and facing a variety of pricing options, will surely choose another route.
Of course, the real estate industry has a powerful lobby that’ll throw everything they’ve got at preventing commission erosion. Also, FSBO sales are much easier to transact during a hot real estate market. Now that the market has cooled, the conversion to self-service home sales will slow. But, like Dubner and Levitt, I think it’s inevitable.
What other white-collar, service professions are likely to go the way of the Dodo?
A Note on SXSW
I’m here in Austin for two terrific, but lesser-known-than-the-Music-Festival festivals —SXSW Interactive and SXSW Film. I’m not likely going to experience much live music between now and Tuesday, but I plan to see Neal Pollack tonight with Amanda and Norbiz …right after we hit the BlogHer party at Stubbs.