Bill Solominsky

The final day of SXSW Interactive was the most thought provoking for me. The first 3 sessions I attended all dealt with Location Based Systems and Services, and the topic of the final session I attended was Real Estate in the Web 2.0 world.

Even though SXSW 2010 was all about the “Location Wars” between Foursquare an Gowalla, Tthe LBS sessions talked about what is being outside of those 2 companies. Josh Williams, the CEO of Gowalla, said in an interview by Robert Scoble that check-ins are now a commodity; its what you do with the check-in and location that is interesting. The companies that spoke, and the examples they gave are prime examples of this. WaveMarket has built a tracking platform for Uship, and they are working on an app that will allow anyone that crosses the state border into Nevada to place a bet from their phone. While these apps don’t require the traditional game type “check-in”, they are examples of what can be done since check-ins, and location in general, is commoditized.

The most lively session i attended the whole week was Can Web 2.0 Kill the Real Estate Industry? I have a keen interest in real estate due to buying and selling multiple houses since I graduated college. The room was well represented by Realtors, and they were the vocal minority. The biggest debate seemed to focus on feedback and ratings: non-agents wanted a way to rate or see ratings of their agent and property, while the agents were completely against it. They claimed that the rating for the property is done in terms of days on market, and agents are gone within a year if they do not perform adequately. The same gentleman that said agents do not need ratings also said later that it is the buyer or sellers fault for picking bad agents since they do not do any research on the agents. Instead, they go with the first agent that contacts them back. Well, if there are no ratings or reviews on agents, how is a buyer or seller supposed to know if the agent is any good or not? I personally ended up with a horrible agent in Florida, but she would not let me out of the 3 month listing period contract, even though I had evidence she changed the contract after it was signed. That would have been a huge red flag in a review, but there was no information like that at the time, just referrals from her trusted sources.

I was amazed in this session how anti-change the Realtors were; they somehow argued against some obvious facts. It reminded me of the music industry’s fight against peer-to-peer file sharing systems. The change happened, the established companies realized they’d lose money, so they fought to keep the old way instead of progressing and adapting to new realities. One example was a Realtor that claimed that during the past decade, tons of Real Estate date became open and available to everybody, but that did not stop stupid buying decisions, which led to the bubble and collapse of the market.

Having home prices and other real estate data finally not being guarded by Realtors was not the major cause of the market collapse. Low interest rates, greedy lenders and agents, and crazy mortgage requirements is what fed the boom and bust. The data would have flowed regardless of if it was private or open. I would argue that some agents helped push buyers into “stupid buying decisions” to increase their commissions. The open data probably helped save some people from buying more than they could by being able to compare homes and see trends that were forming. Buyers and sellers that did not blindly rely on the agents finally had data to help guide their decisions, and I’d like to see some data that shows how these people fared.

My takeaway from this session was that the industry is clamoring for a disruptive service, but its going to be awfully hard to fight the status quo. I think a great service can take off with buyers and sellers, but it will be quickly squashed by the Realtors if it shrinks their commissions. The trick is to create a product for the buyers/sellers, but also make it appeal to the agents. Create value for all parties involved, and it will be a win-win.

The great thing about SXSW is that it breeds ideas. I now have a long list of companies that I’m interested in contacting, ideas for how to make those companies and products better, and ideas that I have not seen any companies doing yet. Thanks for putting on a great confere