NAR Tech Edge
Keynote Address: Hudson Gateway Association of Realtors
White Plains, New York 2017
Good afternoon everyone, it's really wonderful to be here at Tech Edge with you all, and so lovely to see so many friends and familiar faces. Thank you so much for the kind words of welcome, and I'm thrilled to be here. I'm going to share some of our thoughts on the future of real estate technology today. Some far reaching, but some closer to home. Essentially they're food for thought in stepping away from your business for a brief moment to think about what's around the corner. So, will you spend 20 minutes in the future with me?
Stories about people and their connection to place are at the heart of what we do at The New York Times, no more so than within the real estate section. So today, I'm going to share with you three short stories, which I hope will serve as food for thought for your year ahead. For us, it's no secret that we believe storytelling is at the heart of communities, families and cultures. But it's also at the heart of memories. And as a passionate advocate of real estate brands, products and building things to make the process more enjoyable, especially in New York, I believe it's in the DNA of what it feels like to own a home.
As you can imagine, organizations like The New York Times are going through an exciting, unprecedented period of change. But in making our journalism actionable, we believe that true, future-facing value not only for our readers, but the users of the services we build, comes from bridging the gap between our journalism, and problems in our users' lives. As such, we have an approach of asking ourselves what the 'people problem' is first, and building tools for everyday living, built squarely upon the expertise and authority of our newsroom. These then have the clear premise that we become more valuable in our readers' lives over time. In short, we believe that the future belongs to those who are relentlessly helpful, something we share a clear alignment with the Real Estate industry as it too continues to undergo seismic changes. We believe that this is the only way to grow a business in 2017 and beyond.
With all that in mind, let's dive in here.
The first technology we're seeing enormous momentum behind, especially at The Times, is Virtual Reality. Especially this year, we're seeing a lot more ads on TV for VR headsets, mainly fueled by the likes of Playstation and XBox. It feels as if we're finally at that tipping point where, after many false starts and promises of truly immersive experiences, we're at that point where VR is going to hit the mainstream. With an aggressive democratization of the means of experiencing VR content, most notably so far through Google Cardboard, and falling hardware prices fueled by Sony, Samsung, Microsoft, the gaming industry, and Facebook's $2 billion acquisition of Oculus, it certainly seems as if 2017 is going to be the year where VR really begins to gain some long-awaited traction. Indeed, combined with some truly innovative new forms of storytelling, late last year some of you may know that we distributed 1.3 million Google Cardboard devices through one of the oldest forms of distribution, the newspaper.
For the Real Estate industry, we've seen the growing democratization of VR through great folks like Matterport or Floored, but this is a much bigger opportunity. For those of you who work with international, or relocation clients, the opportunity to give them a remote, but truly immersive tour of your apartment might be something really special, and we're hearing more and more examples of agents doing this for their overseas clients. We're already seeing some of this via Google Hangouts, where the agent 'drives' for the client, but there's also those agents who send the Oculus headsets around the world to prospective customers, especially in the commercial space, to let them 'walk around' the property themselves. While VR is never a substitute for actually being there in person, it can certainly get you close, and The Times is now creating at least one daily VR piece every day, transporting our readers with experiences that put them on the boat with the refugees, or up close in the front row of a concert, or to the center of a war-torn corner of the world. The immersive sense of being able to empathize with what it really feels like to live there isn't just a real estate idea, it's a human idea. I have a 7 year old daughter, and I'm wondering what VR will do for her geography class, her science class, or even her history class. When I grew up it was just pictures of exotic locations in a book, but to actually transport students to any part of the world, will be incredible. So the dynamics of falling prices, and a growing democratization of the tools needed to experience this are certainly something to keep an eye on this year, especially for those of you who have kids.
My second story is about overload. It's no secret, especially coming off an election season, that there's more being produced than ever before. Indeed, there's a very real sense that the digital ecosystem we're in right now is at highest editorial capacity for content, coupled with a shifting revenue stream away from publishers and towards networks and large tech companies, many of whom are now wrestling with the interesting technology problem of trying to identify what's real and what's fake. Many marketers suggest we've reached 'Peak Content', which is the idea that people are consuming more news than ever before, and that the price of creating that content has less and less return the more you make of it, thanks to the proliferation of new digital products and of mobile devices in general. Much of our attention has gone from the analog world to the digital world, something we know all too well at The Times of course. But often times, it can feel like an assault on our emotional and intellectual state, being wed to our devices, our social networks, and especially our email and messaging apps.
Not only is this an assault on our attention, but it's also an increasing challenge to keep up with. Especially in the Real Estate industry, while there's no shortage of things that agents 'could' be doing on social platforms for example, the overwhelming challenge is simply keeping up. Not only is producing enough content fraught with its own logistical challenges, just the effort to respond to all the different points of interaction in a genuine, consistently interesting way is incredibly time-consuming, and for many, just exhausting. For many of us, the tyranny of our own inbox is enough. Ultimately, it’s not unreasonable to expect that, at some point, the investment necessary to keep attention will be higher than the impact on revenue.
For some context on what I'm talking about, here's what happens every second on the internet:
More than 8,000 tweets go live
More than 1,500 Instagrammers post images
More than 54,000 people click “like” on Facebook
92,000 YouTube videos play
46,700 people conduct Google searches
And perhaps most shockingly, more than two million three hundred thousand emails go out every single second.
And if you think about where that revenue is flowing, towards sites such as Facebook, Google, Amazon, or YouTube, the main point of differentiation is that these sites don't actually create anything themselves. This, of course, bears close parallels with larger Real Estate portals, who while fantastically skilled at the assimilation and interaction of cross-platform search experience, are not the source of anything they present as a 'result'. Now, I'm not suggesting we'll see a reclaiming of content from any of these services, but in the spirit of being relentlessly helpful, and making your own knowledge actionable for your customers, the means of that distribution comes sharply into question.
Ultimately we're talking about the transference of value here, and for agents and brokerages in particular, the commoditization of listings data isn't the question any more. The production of listings online isn't either. So what is? For us at The Times, we hear from our users that finding listings isn't a problem they have. But finding which neighborhood to look in still hasn't been solved online, and this is a key value proposition when it comes to the agent. But very often that discussion is a cautious one based on Fair Housing implications. So how do you 'really' solve for finding that great neighborhood? I'm not talking about making blog-like 'guides', I'm talking about genuinely helping the user, in the moment, solve for something that's a very real problem for them.
My last point is a little more far-reaching, but I wanted to share some thoughts about automation. So many things in our lives now have the great benefit of being automated. From hailing a taxi, to getting food delivered, the ecosystem of apps and services dedicated to reducing effort and saving time is enormous. Just chat with Alexa and let her know you want to re-order those groceries from last week, turn off the lights in the kitchen, or turn your music up in the man cave. It's true that there's a lot of things in our lives that automation still hasn't touched, and perhaps never will, but I think that automation poses one of the greatest risks to the real estate industry's value proposition, which we've only seen the beginning of around online search.
Fantastic customer service as a tactic is an obvious one that comes to mind in countering that threat of course, but the one I think could be most primed for disruption is transportation, especially when it comes to the implications for real estate in cities. I was recently on vacation in Disney World down in Florida, and if you drive out to Disney's Epcot center, you'll arrive at one of the biggest parking lots in America. With room for 12,000 cars, it sprawls out over 7 million square feet - about the size of 122 football fields. If you look at the lot on a map, you realize that it's nearly the size of Epcot center itself. Disney built one Epcot to hold the visitors. Then it built another to hold the cars. To give you some sense of what I'm talking about, a 2011 study at the University of California-Berkeley found that the United States has somewhere close to a billion parking spots. Since there are only 253 million passenger cars and light trucks in the country, that means we have roughly four times more parking spaces than vehicles. If you totaled up all the area devoted to parking, it'd be roughly 6,500 square miles, bigger than Connecticut.
But as more people move into cities and no longer need cars, there's also a real sense that technology will not only reduce congestion and reclaim space, but also begin to disrupt the need to park in cities as well. Not just from ride-sharing services like Uber and Lyft, but from self-driving cars too. No longer the stuff of science fiction, Google's models have traveled more than a million miles with almost no accidents, and experts expect that fully autonomous vehicles will hit the consumer market as early as a decade from now. Here's a scenario a good colleague of mine at The Times describes:
First, imagine you drive - or your car drives you - to work. Then what? You get out of the car and the car can go autonomously park itself. And, if the car can do that, does it really need to park in a lot under or next to your office building? Probably not. It could drive itself to the outskirts of town and park there. Or, it could decide not to park and just circle endlessly until you’re ready for it. Or, you could allow others to “share” your car while you’re not using it. Doesn’t matter. In any of those scenarios, gobs of centrally located real estate currently devoted to parking garages are freed up. This possibility has urban planners very excited.
Also, if you can read, watch TV, work and do email, or catch up on sleep while your car steers, the pain goes out of commuting - something train commuters already know fairly well. But it could also change the way we think about where we choose to live, and the idea of proximity to your workplace changes with it. If commutes of “previously unfathomable” lengths become a reality, then we might also witness a massive expansion of suburban sprawl. Towns with cheap housing - cheap partly because they lack good bus/train connections to cities would suddenly be ripe for those who’ve been priced out of cities. It's certainly worth keeping an eye on over the next ten years as technology continues to shape how and where we live.
So when we look forward to the kinds of technology trends which will shape Real Estate in 2017, keep an eye on the gaming industry in particular, as VR has the capability to hit the real estate industry like a long overdue freight train. Also keep in mind that more is being produced than ever before, so how and where we choose to have a voice and which audience to reach is becoming important. And lastly, think about what's around the corner when it comes to industries that haven't yet been automated. I've shared some thoughts about transportation and what it might do to urban planning, but what else is there that a computer could do?
I hope you enjoyed my stories. Thank you.
