Why Software is Eating the Real Estate Services World Next
The era of real estate platforms and marketplaces has passed. We’re now entering the most significant revolution of real estate yet: the full-stack real estate services revolution.
Today, technology is shifting focus into the offline world of services across many industries. Andrew Chen, General Partner at Andreessen Horowitz, captures the different eras of technology in his essay. I also discussed a similar phasing of real estate technology in a past post.
Working on Onerent over the last five years, I’ve observed the trends of the industry. We’re a Proptech company in property management services — leasing and managing over 8,000 rental properties across the West Coast of the US. From what I see, it’s clear that we’re in the beginnings of a historically inevitable revolution in real estate.
General consumer technology has experienced four unique eras, as summarized by Andrew Chen:
- The “Listings” Era (1990s)
- The “Unbundled Craigslist” Era (2000s)
- The “Uber for X” Era (2010s)
- The “Managed Marketplaces” Era (2015–2018)
- The “Regulated Services” Era (2019-)
Real estate technology has made notable, yet different progress, along a different path after the “Unbundled Craigslist” era:
- The Listings Era (1998-2000s)
- The Unbundled Craigslist Era (2010s)
- The Utility Marketplace and Smart Home Era (2009–2018)
- The Full-stack Services Era (2019 -)
In the post below, I’m going to cover why software is eating the real estate services world — and specifically, why now?
What is Real Estate Technology?
The Listings Era — Platforms
The first phase of real estate technology was the same as most industries. The “Listings Era”. In real estate, these came in the form of online listing platforms.
The Listings Era was about putting an old experience into new mediums.
Listings sites popped up in every industry. The idea: Put an old experience — the yellow pages or newspaper ads — on a new medium — online. The objective of a listing platform is to aggregate scattered information and expose it to the public (usually for free), drive huge traffic, and sell traffic to advertisers. There are countless of these sites still today that you browse to buy, sell, or rent a home.
The Unbundled Craigslist Era — Marketplaces
The second phase of most consumer technology is called the “Unbundled Craigslist Era”. Real estate technology also experienced this era with the rise of online marketplaces for buying, selling, or renting homes.
“Unbundled Craigslist Era”. Image from Chen’s essay.
The hallmarks of products in the “Unbundled Craigslist” era are: more sophisticated filtering options for searching listings, limited communication with the end service provider, and added context such as user reviews.
Unbundled Craigslist is the second phase for real estate technology as well before it veered another direction.
r rRead the latest rental trends in the San Francisco Bay Area and Seattle
Real estate takes its own road
Most other industries in consumer tech moved from Unbundled Craigslist into the “Uber for X” era in 2009–2015.
Image from Andrew Chen’s Essay
The “Uber for X” technologies enabled automatic matching between market supply and demand, communication with the service provider, and a full booking and transaction experience on the platform. Think, Uber.
Real estate technology, however, took its own path. After entering the “Unbundled Craigslist” era with marketplaces, real estate tech did NOT move into the Uber for X era. Instead, it moved to what I call the “Utility Marketplaces” era.
From Listings Era to Utility Marketplaces
Utility marketplaces were mostly companies from the Listings Era, adding platform features. These features were certainly important advancements in functionality aided by early data science and artificial intelligence — like Zillow’s Zestimate.
But leading real estate technology companies built their business on the existing industry — selling ads to real estate professionals. So they weren’t about to reinvent the business model on which their product depended.
There were no significantly disruptive new companies upending the real estate transaction business model or experience, unlike other consumer tech industries at the time.
This is an abridged blog post from my full article “Software is Eating the Real Estate World Next”. Continue reading my full article for free below.