The Impact of E-commerce on the Real Estate Industry: Baen and Guttery Revisited

Abstract

Executive Summary. One widely reported prediction is that the emergence of the web as an open medium for commerce threatens the role of the real estate agent as a market intermediary. In their 1997 article, for example, Baen and Guttery predicted that the increased use of the Internet and information technology would lead to a downsizing of the entire industry. However, recent Bureau of Labor Statistics data show that the real estate industry, like most of the economy in the United States, experienced steady growth during the last few years. This article revisits the issue of disintermediation in the context of the real estate industry. It discusses—from a theoretical and conceptual perspective—several reasons why the predicted downsizing did not occur. The analysis suggests that the Internet, though clearly a very powerful tool with strategic implications, may not be as disruptive a technology as originally predicted.