Robert Reffkin, the CEO of tech-focused real estate startup Compass Inc., says he never planned for the company to go public so early. The company IPO'd in 2021, in the midst of a pandemic and housing bubble, and is currently valued at $7.8 billion. A housing boom and particularly strong period for IPOs helped fuel Compass's growth to become the largest independent brokerage in the nation.
The 41-year-old founder and former Goldman Sachs executive spoke to Brit Morse, Inc.'s assistant editor, in a recent stream event about his personal and professional journey as an entrepreneur, as well as his views on the housing market outlook.
The son of a white Jewish mother and a Black father, Reffkin recounts how his mixed-race background helped him develop a sense of belonging and fueled his desire to be an entrepreneur. Reffkin's mother is a real estate agent and currently works at Compass. He recalls being the only Black child at the synagogue, and people asking his mother if he was adopted. In the workplace, Reffkin advises people to remember that they can be different, and still belong.
"Who I am is just fine," says Reffkin.
Below, we recap some of his predictions on the future of the housing market and the pandemic's impact on the real estate industry.
The entire process of buying a home will go digital.
Reffkin estimates that the average real estate transaction now takes about 40 days to close. During that time, the buyer's lender, title company, and the county file the necessary paperwork to complete the home-buying process. In the future, Reffkin says, every aspect of the real estate process will go digital and occur on one platform. Compass plans to expand in the area of titles and mortgages to help speed up the sales process.
"It will be more seamless and less complex," says Reffkin.
People will remain a vital part of the real estate process.
A tech-centric real estate industry doesn't mean that the role of the real estate agent is defunct. In Reffkin's view, humans will still be powering the real estate process. Real estate agents will take on more of a project management role and focus on such tasks as marketing, virtual showings, and compiling listings. Many people will still want to see houses in person. Other parts of the transaction can go digital, such as the negotiation, the transaction documents, the disclosure documents, the title, and the mortgage. But agents will still need to move that process forward, says Reffkin.
"I like to say that Compass is building technology to accelerate what agents are doing already," he says.
The pandemic-fueled housing boom is far from over.
The pandemic helped ignite the current U.S. housing boom. Demand is high, supply is low, and the easy availability of remote work is allowing urban professionals to leave cities. Reffkin believes that the current housing market is here to stay.
"I personally believe this is a permanent shift in demand we're seeing. Everyone wants more space," he says.
Remote work has caused more professionals to value their home environment, and it widens the possibilities of where one can reside. People will be using their home more than they did in the past, as a place to work, live, and entertain. He predicts that the future will see homeowners demand more space, and multiple homeownership will be more common as well.
Corrections: An earlier version of this article stated that Compass went public in 2020. It went public in 2021.