About the Study

Factoids

• Based on 74 one-on-one interviews of industry CEOs and leaders conducted by Stefan Swanepoel.
• Comments from those interviewed were confidential and no input was attributed to any particular individual.
• The report does not seek to place blame or assess past performance. It is a forward-looking assessment of possible challenges.
• Includes data from a national survey with input from 7,899 REALTORS®.
• Draws on a review of 200+ studies, reports, white papers and surveys totalling 6,051 pages.

Data classification

Each danger is scored on three axes — probability, timing and impact — which combine into a single danger index out of 100.

Background

The Strategic Thinking Advisory Committee (list of Committee members appended to this Report) of the National Association of REALTORS® (NAR) was tasked with the responsibility to identify those future events or clashes, both anticipated and unexpected, that could negatively impact the real estate industry. NAR retained the services of the real estate industry’s leading analyst, and New York Times best-selling author, and author of more than 30 books, Stefan Swanepoel. The culmination of the research and analysis led to the creation of a 160-page study titled: D.A.N.G.E.R. Report. D.A.N.G.E.R. is an acronym for Definitive Analysis of the Negative Game Changers Emerging In Real Estate.

Objective

The goal was to provide Organized Real Estate, as well as its members, a comprehensive report identifying the most significant threats, risks, and black swans facing the real estate industry without judging or discarding them, without placing blame or picking sides, and without attempting to solve them. This way the information gathered and analyzed could be of benefit to many and would hopefully empower people to have a more extensive understanding of the complexities of the industry.

Solutions

The Report seeks to identify the most significant dangers but does not provide solutions for any danger.  It was decided at the beginning of the project that identifying solutions is the responsibility of each respective leader and organization. It is the strategic interpretation of each danger by leaders and how they decide to respond that provides each organization its unique competitive advantage and sets them apart from their competitors.

Beneficiaries

“Black swans,” it is said, are unpredictable future events. Of course we do not know which black swans, if any, will occur, but with this Report identifying so many, you now have more knowledge than before. It is our wish that the D.A.N.G.E.R. Report will be a resource for the entire industry.

Markets Covered

The initial research was focused on the residential real estate brokerage industry in the United States. Subsequent studies covering commercial real estate, property management, and the global markets outside the U.S. are being considered.

Exclusions

We acknowledge that most catastrophic type events—such an Economic Collapse, a major Natural Disaster, a Global Disease Outbreak, a significant Terrorist Attack, and/or a Nuclear Accident—would most likely trigger a chain reaction of events negatively impacting society in general, the housing market, and the real estate business. These exceptionally large and unforeseeable phenomenons have not been included in the list of dangers tabulated.

Research

The Swanepoel | T3 Team researched over 200 reports, surveys, focus group studies, student dissertations, white papers, journals, articles, and other related academic resources, including reports from Harvard, Wharton, Deloitte, KMPG, PWC, Credit Suisse, Urban Land Institute, Canadian Real Estate Association, Mortgage Bankers Association, Fannie Mae, various large real estate franchise groups, and many others.

Survey

To ensure that the Report would also include opinions from the brokers/agents in the f ield, an extensive, random survey of REALTOR® members was undertaken from October 13, 2014 to October 27, 2014 (details of the survey is appended to this Report). The survey received and incorporated 7,899 responses.

Interviews

In addition to the research and survey, 70 CEOs and other senior executives from the largest franchisors, the largest real estate brokerage companies, national, state, and local REALTOR® Associations, MLS organizations, and a variety of large service providers were interviewed. Each was asked the same open-ended questions. In order to obtain the most accurate information, the interviews were all conducted as one-on-one, face-to-face interviews by Stefan Swanepoel, with contributors included in the Report without attribution.

Report

The results of the research and analysis are incorporated in the D.A.N.G.E.R Report. The research data, survey results, and interview responses were categorized into one of five major industry sections: Agents, Brokers, National Association of REALTORS®, State/Local Associations of REALTORS®, and MLS organizations.  Each danger is presented on a double page spread, beginning with its reference number (category and ranking; e.g. A1 – most severe danger in the Agent section), followed by a descriptive title, a short statement of the danger, and an “In Context” section providing clarity on the background of the danger. The final contribution to each danger is the Author’s Perspective. This reflects the author’s perspective and ranking of the danger’s threat level on the Probability, Timing, and Impact of each danger. 

Data Classification

In order to best evaluate and present each danger, an Index was created based on the probability (P) of each danger occurring, the future timing (T) of the potential danger, and the possible impact (I) of each danger. The combined scoring of these factors results in the PTI Index. The index is not scientific but rather a combined and weighted representation of the research, surveys, and interviews that enable the dangers to be placed in order of significance as to the level of danger they present.

The overall result of evaluating each danger is presented in the PTI index (Probability, Timing and Impact), which ranks the danger to provide a level of consistency between the dangers/sections of the report. The Danger Index represents a composite overall score.

Checklists

At the end of the Report a detailed checklist of all dangers is provided—first in priority order by section and second in overall combined priority for quick comparison. Download these checklists separately and use them for your next strategic planning or management retreat to ensure that your organization is aware of these dangers. Slide decks are also available for your personal use and can be downloaded from the websites listed.

Important Note

Remember that the 50 dangers listed in the D.A.N.G.E.R. Report are about hypothetical future events that may or may not occur. The dangers included are a compilation of the opinions of a large group of the most knowledgeable and influential leaders in our industry. No confidential information was included in this Report. The content does not necessarily reflect the opinion of the National Association of REALTORS®, its management or elected leaders. As far as possible, the information gathered is provided with its original intent and messaging intact. Information may or may not apply to your market and you are always urged to use sound judgment and consult with proper counsel and experts before making any significant decisions.

Distribution

The 160-page D.A.N.G.E.R. Report is distributed electronically to the real estate community at no cost. The Report will be available separately in each of the five sections as well as one combined Report and can be downloaded from one of two websites from: realtor.org/dangerreport and www.www.dangerreport.com. A print edition will also be available from the National Association of REALTORS® bookstore.

Copyright

The D.A.N.G.E.R. Report was researched and authored by Stefan Swanepoel, President and CEO of the Swanepoel | T3 Group (now T3 Sixty), on behalf of the National Association of REALTORS®. All rights are reserved and copyright is owned by the National Association of REALTORS®.

REALTOR® Survey

In October 2014 a survey of REALTORS® was conducted asking them to evaluate the impact of 19 potential disruptions or dangers to the real estate industry. Respondents were asked for their opinion about the impact of each danger on agents and brokers and not whether it would be positive or negative or even whether or not it is likely to occur in the future. The goal of the survey was to collect REALTOR® opinions on the question: Assuming that each danger did occur in the next 3 to 5 years, how much would it impact agents and brokers? Respondents rated each danger on a five point scale ranging from “No Impact” to a “Game Changer” impact. Reviewing the results, REALTORS® often agreed on the level of impact of each danger, frequently with at least three quarters of respondents believing some dangers would have a “Major Impact” or would be a “Game Changer”. The intensity was particularly strong in a few instances with at least half of REALTORS® indicating that a particular danger was a “Game Changer”. The survey results that follow are based on 7,899 responses reflecting an adjusted response rate of 5.8%. 

Strategic Thinking Advisory Committee

NAR Leadership Team

Senior Vice Presidents

NAR Staff

Committee Members 2014/2015

Disclaimer

DISCLAIMER While the publisher, authors and editors have used their best efforts in preparing this Report, they make no representation or warranties with respect to the accuracy or completeness of the contents of this Report, and specifically disclaim any implied warranties. References to any companies, products, services and websites do not constitute or imply endorsement, and neither is any reference or absence of reference intended to harm, place at a disadvantage or in any way affect any company or person. Neither the publishers, authors, or editors shall be liable for any loss or any other commercial damages, including, but not limited to, special, incidental, consequential, or other damages.

TRADEMARKS Companies mentioned in this Report own numerous trademarks and other marks, and this Report, the publishers, the author, and the National Association of REALTORS® or any other party involved in this Report in no way seeks to challenge or dilute any of these marks. Specifically, REALTOR® is a registered trademark of the National Association of REALTORS®.

IMAGES AND PHOTOS All images are protected by copyright and licensed by Shutterstock.