Where We Are Now: February 22, 2021

Mr. Toad’s Wild Ride

5:32AM PST

Team – 

Just when we thought the peaceful transfer of power might provide for a desired calm in 2021, we had the Robin Hood GameStop stock controversy, the horrible weather impacting the Southern Central US — my heartfelt feelings for Texas, and several swift acquisitions of major real estate technology companies.

Seatbelt fastened?

Where We Are Now: February 22, 2021

Here are some basic positive indicators:

  •  $900 billion stimulus, via $600 direct payments, has made its way into the economy very quickly.
  • Retail sales jumped 5.3 percent in January, well ahead of expectations at 1.2 percent. Every major category of spending, including food and drinking establishments, saw gains.
  • Goldman Sachs recently projected a third federal stimulus bill in the amount of $1.5 trillion which will be approved by end of Q1 2021, and a year-end 2021 unemployment rate of sub 5 percent — near record lows!

These are impressive! Inflation is creeping into focus as an issue. Remember real estate is an exceptional hedge on inflation.

From my vantage point, we have a solid nine to twelve month glide path with low interest rates, another huge stimulus package, exceptional consumer demand, and the dreaded limited inventory. Stay engaged!

Pivoting to our real estate industry, we have seen some major acquisitions announced in the last fifteen days. If you did not see the February 9th Path Forward, it is likely worth 20 minutes to see the portion on the state of the industry. I share my perspective of where I see the invested capital flowing – it’s focused on reducing the friction in a real estate transaction.

We all welcome this phenomenon, presuming the tools to reduce friction are in the right hands and designed to empower real estate professionals. Zillow’s [NASDAQ: Z] acquisition of Showing Time fits the former but maybe not the latter. Zillow now has a franchise on the front end of real estate trades in search/display and tools to schedule showings. In addition, Zillow’s dotloop.com centralizes the transaction management process through closing. These all involve your client data and contact information. 

Front and back end are in place! Is Zillow making its way to the middle? Pick your friends and keep your enemies close – you have all heard this before. Be careful where you spend your advertising and lead generation dollars.

CoStar [NASDAQ: CSGP] is an institution in the commercial real estate industry – the Bloomberg of the industry. I competed directly with CoStar in my tour of duty at LoopNet, which CoStar acquired after LoopNet went public.

CoStar is one of the final bidders to acquire CoreLogic [NASDAQ: CLGX], a provider of financial, property, and consumer information, analytics, and business intelligence – with a focus on residential real estate. If successful, the CoreLogic assets combined with HomeSnap and Houses.com will position CoStar to be a strong contender in residential real estate’s information management and decision support tools.

Zillow and CoStar, each recently valued at more than $35 billion, are set-up to enhance the flow of information and services in the residential real estate industry. They have very different business models. The rivalry will be fascinating to experience. 

Don’t underestimate either Zillow or CoStar!

Compass is delivering big time on the commitment to empower real estate professionals. The technology platform enhancements in the past year have been staggering to experience and are certainly reducing the “friction” in your daily activities. From Collections, to the AI empowered CRM to the newly released Business Tracker, Compass powered productivity in this digital world is second to none.

As you navigate through your business activities and “noise” of our industry, please remember the greatest asset you enjoy is that of your clients’ trust! There is not a #, @ or .com that will ever replace the trust your clients have in you.

This is Where We are Now.



Mark A McLaughlin

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