Thank you for braving yet another ferocious northern California rainstorm to be with us today at our 2019 Installation. I’ve been fortunate to get to attend a couple other installations lately – in Monterey, and San Benito and they were great opportunities to get to meet and connect and re-connect with colleagues from our adjoining communities.
I’d like to thank all the brokers, agents, and staff who’ve traveled here from Santa Clara AOR, Silicon Valley AOR, Monterey AOR, and San Benito AOR. I hope that everyone here has had the opportunity to meet someone new and learn something about what’s going on in our adjoining marketplaces. I’d also like to extend a very special thanks in particular to Jeanne Radsick, CAR president-Elect for 2019, who came all the way from Bakersfield to be with us today – thanks Jeanne!
After a long, hard fought and divisive campaign to become your 2019 President, I think we all need to come together to fight the biggest threat to our industry. What’s that? In a word, it’s apathy. And I’m not saying you all gathered here are apathetic – because today, you showed up. And a lot of you show up for many of our meetings. You are involved.
And you not only show up for our meetings – you show up at county supervisor meetings, city council meetings, planning commission meetings, RTC meetings. You write your representatives and urge your clients to do so as well. You know that good things don’t just happen. They happen because people who care roll up their sleeves and make it happen.
But too many REALTORS don’t want to get involved. And look, I get it – they’re busy, they have lives outside of real estate. They pay their dues, and expect that their local, state, and national associations of REALTORS will work to shape circumstances as best they can to protect and promote member’s interests, and of course, the interests of their clients.
But is just paying your dues enough? Is it enough to pay your dues, plus the $148 each year we ask for our REALTOR Action Fund?
A few weeks back, I was told I needed to pick a theme for my presidency. It’s something I’ve thought about off and on since I was chosen to be president-Elect way back in 2017. The theme I chose is “Building Better Business.” I think it has a nice to ring to it – I mean BBB has worked just great for the Better Business Bureau so I think it ought to hold us in good stead this year.
But what do I mean by building better business?
Well, let me begin by addressing one of the biggest fears I think that’s out there in the REALTOR community today: that you’re going to be replaced by an App. And when I say App, I don’t necessarily mean an App, that’s more of a euphemism for a collection of software, hardware, and services (both human and non-human, powered by artificial intelligence) that will work seamlessly together to make it much easier, quicker, and dare I say, less expensive to sell a property.
Who here is just a little bit worried about this app-powered real estate sales future?
If you spend any time at all on any of the many REALTOR Facebook groups nationwide, you’ll note that it’s a topic of significant concern coast to coast.
And I’m here to tell you, that if all you do is take a listing agreement, snap some photos, list a home in the MLS, negotiate the price and terms of a deal, and shepherd the sale through to closing – you have a lot to worry about. The devil is in the details, but the mechanics of all that are relatively straightforward in most cases. If that’s all you’re doing for your clients, you can probably kiss your business good-bye.
Of course, most of you all do a lot more than that. You bring tremendous value to the transaction – and to your clients and the public outside of any transaction. But I ask you: what, specifically, does that value look like? What do you do, beyond just the basics of making a sale happen? And, how do you powerfully demonstrate your value proposition to current and prospective clients?
Anyone hear about Measure A in Scotts Valley? It passed last November, and it established a $108 parcel tax for five years to fund education programs, staffing, and technology. The folks in Scotts Valley are very proud of their schools, and they know that their excellent schools underpin to a large extent their handsome property values.
And who worked tirelessly to help Measure A pass? Our own Derek Timm, who is now, by the way, a member of the Scotts Valley City Council, in addition to being an upstanding member of the Santa Cruz County Association of REALTORs.
Derek wasn’t afraid to say he very much supported Measure A – even though I’d say that most REALTORS, by a healthy margin, oppose additional property taxes.
Do you think that the folks in Scotts Valley – at least the 2/3rds plus who voted for Measure A – will remember Derek’s active and outspoken support for a measure which would make their community a better place to raise children, and oh by the way, boost home values?
I think yes. Yes they will. Because Derek has shown he cares about them. In five years, when you’ll be able to sell your home with the click of a button to an iBuyer – do you think they might at least want to talk to Derek before they click that button, to see what he can do for them?
I think yes.
Derek, you see, is not apathetic. He’s engaged. He’s all in. He’s not about to be replaced by an app, because he serves his clients in ways that an app never can. I haven’t looked into Derek’s sales numbers, but if I had to guess, I’d say he’s building better business in ways that will pay off for many years to come.
You ever hear about that real estate technology company they got up there in Seattle, name starts with a Z? Also if you look on all these Realtor Facebook groups I was talking about, there’s quite a bit of wailing and gnashing of teeth about Zillow, Zillow ads, Zillow iBuyer, it goes on, and on.
All this worrying about Zillow is, in my opinion, misplaced. Sure, they are a blood sucking leach that takes tons of money from Realtors. You know I don’t have the numbers handy, but I think that Zillow takes in 4x in revenue dollars for what gets paid out in commissions sourced from their leads. Some guy told me that at a Zillow-haters anonymous meeting, so it must be true.
But Zillow is a fart in the wind.
What happens when Amazon, also based in Seattle, buys Zillow? Zillow has a $6.8 billion market cap, Amazon has a $791 billion market cap. It’s only a matter of time before Zillow gets bought up and really weaponized into an app that goes after the core of our business. You just wait.
Or, don’t wait. Don’t be apathetic. Take charge. Do something. Get involved. Sacrifice. Yes, sacrifice. Time. Money. Convenience. The challenges our industry is facing are epic, and we need to be unified, oars in the water and ready to row together. We must make sure that we are partnering with the right companies and organizations that have the size, technologies, and leadership to tackle the onslaught we’re already facing from the billions being invested by companies looking to squeeze us out.
Our association needs to be more involved in our community, to show them that we care. That REALTORS matter. That REALTORS are part of the solution, not part of the problem.
And if you haven’t noticed, we have problems. Big, big problems. Our housing market is screwed. All throughout California, but especially in Santa Cruz. Adjusted for cost of living, the poverty rate in Santa Cruz county is the second highest in the entire state of California.
We as Realtors need to recognize that the ways we housed people in the past no longer work for the majority of the population. How many of you have clients with good paying jobs – I’m talking doctors, lawyers, professors, etc., – who just can’t find any home they could see themselves living in around here? I’m guessing every single one of you does. And that’s a problem. That’s a problem for our clients, and it’s a problem for our business. We get paid on transactions. No transactions, no pay.
Let me ask you: what kind of house did you buy when you were in college? Anybody? Even if you could have afforded it – would you have wanted to buy a home then? For most of you, the answer would be no.
And that’s because home ownership is not right for everyone at every stage in their lives. I’d put it to you that UC Santa Cruz students would be better off living in large apartment buildings than they would be living in single family homes, which were designed, after all, for single families.
It’s a shame that there are very few large apartment buildings in Santa Cruz where UCSC students might actually live.
We have a dire need for housing. I’m very pleased to see that our new governor Newsom is actually putting some serious dollars behind housing in his new budget. He wants to build 3.5 million new housing units in the state of California. That’s ambitious. And it’s probably not going to happen, but at least the conversation is going in the right direction.
And the housing of the past in Santa Cruz is not going to look like the housing of the future. It can’t. There’s not enough land and water to go around for that.
We need more housing, and it’s got to be dense, and a lot of it is going to be rental housing. And that’s just fine. We need lower rents, so young people will be able to save money for a down payment. So they can buy a house in their 30’s instead of waiting until they’re in their 40’s or 50’s. So we have a more efficient housing market that better meets the needs of the people who actually live here today.
There’s great, great opposition to building new, much denser housing projects in Santa Cruz. The NIMBYs are strong, and they show up. They’re there at the board of supervisor meetings. They’re there at the city council meetings. They make their voices heard.
We need you to show up too, and make our voice heard. We need more housing, and we need it now. We need to fight the notion that denser housing means housing nobody wants to live in or near. Ever hear of Paris, France? Paris has 4 times the density of San Francisco, and last I checked, there’s no shortage of people who want to live in Paris.
Our association needs to stand up for housing. I’m glad to tell you that we recently modified our mission statement to include the word “housing.” By supporting housing, we are showing our clients, our community, that really, we’re in the housing business. We make housing happen, and we make housing better – for homeowners, future homeowners, and for everyone in our community. Because we believe that attainable housing makes for stronger, safer, and healthier communities.
Let me ask you – do you think that the public thinks REALTORS in general care about stronger, safer, and healthier communities? I don’t think so. And that’s not surprising, because we haven’t really sent that message out.
I say we build better business. I say we flip the script. I say starting right here in Santa Cruz,California, we turn all that around. We can advocate for more, better, and affordable housing in our community – while at the same time promoting home ownership and fighting for private property rights. Those things are not mutually exclusive – actually, they go hand in hand.
I think this means that we as an association need to raise our profile. We need to be more active and engaged in our community. We need to not be afraid to take strong, public positions that may alienate some people – just as Derek Timm was not afraid to come out so strongly in favor of Measure A in Scotts Valley.
If we’re able to do that, as an association, as a profession, and individually as practitioners and neighbors, we will, without a doubt, enhance the REALTOR brand in our community. And so, five or ten years down the road when a homeowner thinks it’s finally time to pack it in and move to Arizona or whatever, they’ll want to choose to work with someone they know, like, and trust – a REALTOR, who’s shown that they care.
And an app is never going to care about them at all. And that’s how we build better business and retain the pre-eminent place we currently enjoy in North America’s real estate marketplace. I look forward to working with you over the next year as we build better business for us all. Thank you!