Watch out — the industry’s mind-boggling transformation isn’t over 

Change is hard — and there's plenty of change happening in the residential real estate industry right now. But this transformation should be seen as an opportunity, not something to fear.

That was the message put forth by Stefan Swanepoel, founder and executive chairman of T3 Sixty, and Jack Miller, CEO, during a presentation at the T3 Leadership Summit earlier this month. (Note: Swanepoel is also the founder of Real Estate News.)

The longtime industry experts discussed the transformation of U.S. residential real estate and the exponential pace of growth ahead.

Five decades of real estate evolution

Observing how the real estate industry has transformed itself over the past 50 years can offer insight into where it is going next, said Swanepoel and Miller.

What remained constant is that while the motivations that drive real estate haven't changed — people hit a certain stage in life where they search for and purchase a house — the industry has changed enormously in how it delivers services to consumers.

The genesis of the industry's transformation began in the 1970s. Real estate companies started to embrace franchising in the early part of the decade, experiencing the same kind of success seen in other industries. It also enabled companies to shift from local to national, Swanepoel said.

That led to the creation of national and regional companies in the 1980s, followed by a surge of acquisitions and consolidations in the 1990s and 2000s. Those decades also saw the arrival of the internet and a cycle that would usher in a new wave of technology. New companies then began to crop up and attempted to innovate across different parts of the real estate business. The pandemic even accelerated various technologies and processes in home buying and selling.

With the arrival of desktop applications and spreadsheets in the 1980s, computers started to become valuable tools for real estate professionals. In the 1990s, people could connect online through email or the internet, allowing real estate companies to communicate more easily with agents in offices across the country. Web-based communication really took off in the 2000s, while hardware continued to mature in the 2010s; smartphones became ubiquitous, and connection speeds increased.

"This is where people started moving away from their computer as a primary interface," Miller said, making it easier for people and companies to do business anywhere.

The upsizing of the industry

One point that Swanepoel and Miller reiterated was the mind-boggling, 35,000% growth of real estate companies over the past five decades. Swanepoel noted that in the late 1980s, the largest real estate company in the U.S. did $2.2 billion in sales a year. Today, the biggest real estate group in the U.S. is doing $737 billion a year. At the same time, the total value of all homes has increased nearly 4000%.

Additionally, three of the largest real estate companies — the largest brokerage by sales volume, the brokerage that does the most annual transactions, and the brokerage with the most agents — all formed after the year 2000.

Capital, along with what technology has enabled — speed, mobility, and now the potential to advance even more quickly via artificial intelligence — is just going to increase the pace of growth and change, Miller said.

"We're going to see 200-300 companies in the next 12 months that are going to pick a task or process in real estate and reinvent it — CRM by AI, transactions entered by AI, market predictions by AI, property search by AI," Miller said. "It's here and it's going to impact everything."

And all of these changes are something the industry should embrace.

"Transformation is not bad. Don't be scared," Swanepoel told the audience. "Be thankful that God put you at this point in time in this industry because there's so much opportunity ahead of you if you are just willing to seize it."