Realtors

In today's installment of the Cathy comic strip, Cathy Guisewite hits the nail on the head when it comes to Realtors (you can see today's strip here). She points out that the Internet has completely altered the landscape when it comes to buying a house: The Internet now:

• Allows anyone to view all of the houses currently available for sale online (including specs, photos and often video tours)
• Allows anyone to sort those houses by price range, number of bedrooms, location and dozens of other factors
• Allows anyone to see what the previous sale price of the house was
• Allows anyone to see what the current tax value is
• Allows anyone to compare prices in the neighborhood
• Allows anyone to apply for mortgages and get very good rates
• Allows anyone to get advice from a thousand online sources
• Allows anyone to do title searches
• And so on...

At the end of the strip the Realtor says, "Every aspect of your purchase can be handled from the comfort of your own computer before coming in to see me for the last critical step: Collection of our 6% commission!" And that is so true.

What makes this particular example sad is that, as with the music industry, Realtors are going to fight the inevitable every step of the way. The job of a Realtor is in the process of being rendered obsolete by technology. A Realtor's job is rapidly reducing down to unlocking the doors of the houses that you want to visit. Unlocking doors is not worth thousands of dollars. So we will come up with a far less expensive way to handle that.

The fact that the occupation of "Realtor" is going to vanish is, on the one hand, fantastic for home buyers and home sellers. But it is also depressing to some degree. Being a Realtor has been, up to this point, a decent way for a lot of people to make a living. More than one million people belong to the National Association of Realtors [ref]. Sure, there are some home buyers who will continue using Realtors, but for the most part people are not going to pay someone $10,000 to do, approximately, nothing. So... many of those one million jobs will vanish over the next five to ten years.

We will be seeing a lot more of this sort of thing, especially as the pace of robotic development accelerates. Technology will be able to replace human beings in many job categories very quickly. The Web browser was not invented until 1990. It took several years to get traction, so really the Web has only existed to any significant degree for about 10 years. In those ten years the Web has made the Realtor's job laregly obsolete, and a million people will start the process of being out of work. The Web has done the same kind of thing to travel agents. It will be interesting to see how we begin to adjust our economic models to handle large-scale job displacement like this.