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The Millennium Boom decimated trillions of dollars worth of asset wealth across the nation. In addition to destroying asset wealth tied up in the real estate market, it also leveled the practice of real estate itself.  Similar to the devastating effects of the prehistoric meteorite colliding with the planet, the Millennium Boom triggered a mass extinction of the conduct employed to market real estate that was forged during the superheated years of the mid-2000s leading up to the boom.

The marketing of real estate must now re-evolve from scratch with an eye on transparency. Brokers and agents must gather and timely disseminate property information by way of a new set of rules for conduct in real estate sales.  Past deception in marketing a property to get it under contract and into escrow before disclosing adverse facts has been corruptive for agents and brokers, deceptive to members of the public who seek to sell or enter into real estate ownership, and destructive of any goodwill the real estate industry had previously developed.

The end goal for brokers of all real estate transactions is the same in the post-Boom era as it was in pre-Boom times – to close escrow and earn a fee. However, the way agents achieve this end goal will be different under the evolving real estate paradigm.

Brokerage offices with innovative brokers and management can grow beyond their pre-Boom size as individuals join the industry and obtain licenses, and the most optimistic agents retain their licenses and remain active. With each additional agent employed under a broker, the brokerage office benefits from that agent’s experience and insight and all the personal contacts held by that agent, such as his friends, family and colleagues.

Simultaneously, the initial size of the average brokerage office will shrink as brokers clean house, streamlining their offices by only employing the high-functioning agents who constantly generate income. After purging all the underperforming agents who entered the industry during the 2003-2007 binge period, brokers who choose not to grow will be able to reduce space, staff and capital demands, and allocate more time to each of the remaining agents in their employ.

The future will also likely see more compromise between brokerage offices, causing a resurgence of co-broker listings and referral fees in a better division of labor.  The marketing of listed properties will certainly include more property conditions to inform prospective buyers before they set the price they will offer to pay.

California brokers and agents have been given a blank slate upon which to implement proper standards for conduct with clients and the properties they are involved with. The ashes of the Millennium Boom create a fertile environment in which agents are unbound by past corruption and deceit, leaving them free to move towards a more sustainable structure for brokerage conduct consistent with time-honored market fundamentals, not inorganic projections of growth and profits.

The concurrence of a business recession, a real estate contraction and a financial crisis has created a moment in time for mavericks and innovators to excel. These will be tough years going forward for corruption, deceit and other quasi-criminal elements to exist, much less thrive as they did in the mid-2000s. All facets of real estate activity will certainly change as agents will not likely waste this golden opportunity to become one of the innovative high-functioning market makers.

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