Inman Connect is happening right now in New York City, if any of you are there please ping me. I couldn’t attend this year.
But we are watching! Apparently Robert Reffkin sat down Tuesday with Brad Inman for an “invite-only” chat, where Robert revealed that Compass won’t be expanding into any new markets this year, and that the Dallas Compass launch was a total success in the company’s eyes.
I have heard from industry insiders that Dallas has been Compass’s most successful launch thus far, unlike Chicago, San Francisco and a few others.
According to Inman, “Compass opened offices nationwide in 2018, but the company won’t be going into any new markets this year, according to Compass CEO Robert Reffkin. The brokerage, instead, is drilling down into its current markets with plans to hire more managers and support staff in 2019, he said.” They will, however, be making acquisitions, but in a softening real estate environment, they will not be getting out the big bucks for them.
In Texas, Compass now has offices in Dallas, Houston and Austin. Which pretty much covers the state, right? So if you are a broker in a major city that has not been “disrupted” by Compass, like say El Paso or OK City, whew! Take a breath! Toss that Xanax, all is good.
For now. Others at Inman Connect say iBuyers will be 50% of the market in ten years.
Sean Black, the former Trulia executive and current CEO of online homebuying and selling company Knock, believes the U.S. real estate market is in for a serious realignment: on Tuesday he told attendees of the Inman Connect New York 2019 event that within five to 10 years, 50 percent of all sellers will be offloading their homes to a company that makes fast, all-cash offers such as his, rather than to an individual buyer.
“People need that certainty,” Black said. “They need that convenience.”
Oh, and better watch out who manages your office: Reffkin actually said it — an office manager can make or break a brokerage.
“For us, this year, we don’t want to spread ourselves thin,” Reffkin said. “Last year we did a bit.”
In certain markets, including Dallas, Reffkin expressed satisfaction with the launch. In other markets – which he didn’t reveal by name – three main issues surfaced: under-supported marketing, not having the right managers and less-than-perfect office space.
Part of Compass’ growth was also fueled by major acquisitions. Compass, flush with venture capital funding, was able to make major acquisitions – like that of Pacific Union – but Reffkin revealed that Compass won’t be spending as much on acquisitions this year.
“We will have acquisitions this year, but in this environment, where the equity markets are softening … we’re not going to be spending as much last year,” Reffkin said, clarifying that he means they won’t pay as much for their acquisitions.
“I care about every agent,” Reffkin said. “When they’re on the phone and they’re saying, ‘Why don’t I get what that person got, it creates a lot of complications.’”
“I think there’s nothing about that (in the wake of the death of Saudi journalist Jamal Khashoggi), that is okay,” Reffkin said, repeating similar statements he made in October. “From a human level from a biz level. It makes me consider what I want to do in the future.”
Reffkin also said something curious: we need to keep an eye on brokerages that offer mobile search, such as Redfin, who “are pulling agents away from the multiple listing service.” By this, he means (I think) that local MLS’s are not keeping up with technology fast enough for agents, whereas the aggregators are. Insiders tell me Compass has prioritized mobile search, for good reason. Aggregators, unlike MLS organizations and brokerages, are not licensed and not subject to many of the overly restrictive “codes,” laws and rules governing those licenses. Therefore they can offer more consumer-friendly information, which just be what the consumer wants.
And whoever gives the consumer what they want wins the prize.
