Happy New Year!
I began The Red Dot in April of 2018, with the inaugural May issue.
What I thought would be valuable and interesting is to look at the sweep of the entire year, and think about the most important thing that happened in all of 2018.
In a way, this report is a retrospective, and will contain references and excerpts to previous reports. On the other hand, one of the nice things about hindsight is the way that we can see how things fit together. And one of the nice results of that is to identify the most important thing that happened in 2018.
This year, there were a large number of candidates for the most important event of 2018. But after reading through hundreds of pages of past Red Dot reports, dozens of normal posts, and everything else I could get my hands on… I think the signature event of 2018 is not a specific event. It is, rather, a sort of tipping point that has been reached.
2018 is the year when capital and access to capital became the most important factor for success in residential real estate.
One could make a strong argument that the tipping point was actually reached in 2017, when some $5 billion was invested into real estate technology, brokerages, and “proptech” companies of all kinds. But the Red Dot did not exist in 2017, and I would note that 2018 is when companies like Zillow and Redfin made major shifts to take advantage of the new rules for competition.
A lot of these themes which have been circling around in my head found a focus recently, in a video released by the venture firm Andreessen Horowitz. Alex Rampell, a General Partner, gave a presentation entitled, “When Software Eats the Real (Estate) World” and it is fantastic. I recommend you watch the whole thing.
In retrospect, what we saw in 2018 was the transition from the old way of competing — recruiting and retention of individual agents — to a new way of competing: institutional delivery of real estate services to consumers who increasingly expect on demand service: Push button, magic happens.
Without further ado, let’s get busy saying farewell to the Year of the Dog and welcoming in the Year of the Pig.