How Online Marketplaces Are Changing the Commercial Property Industry and Vice Versa
Real estate commerce is moving online. The internet, much as it has changed almost every other aspect of our economy, has transformed the way that real estate is advertised, researched, bought and sold. It’s the first place people go for many purchase decisions, giving birth to some of the most valuable companies in the world in the process, and it is starting to become the same “go-to” source of information for one of the most complicated purchases, a property.
But what does the future look like when the real estate economy moves online? What types of marketplaces will win and go on to dominate the market? If the other successful online marketplaces have taught us anything it is that there is little room for anyone but number one. How much value will marketplaces be able to extract from the inventory that moves through them? So much data is being ingested by aggregators that new business models are popping up with some marketplaces choosing to broker and buy properties themselves.
These are the questions that we set out to answer in our research. To do so we interviewed dozens of entrepreneurs building online marketplaces to get their take on what shape the real estate industry will take as it becomes digitally native. What we found out is that there are actually a lot of different types of marketplaces including ones that only list properties, those that are bringing the transaction onto their platform and those that are doing the brokerage themselves. Every different type of monetization strategy has its benefits and each of them tends to thrive under different market conditions.
The impact of e-commerce cannot be denied. Understanding how different aspects of each real estate industry affect and are affected by the growing role of online marketplaces is the only way to predict how transformative a force the internet will end up being to the way we transact the world’s biggest asset class.