Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.” Read more opinion SHARE THIS ARTICLE Share Tweet Post Email

Photographer: Daniel Acker/Bloomberg Photographer: Daniel Acker/Bloomberg

A colleague just had twins and is looking for a larger home. He wondered aloud “Where is Silicon Valley in the real estate world?” For those buying or selling a house, the impact of technology may not be especially visible.

But it is there. You just have to squint a bit to see it. Extrapolate the trend a decade out into the future, and the impact will become much more obvious.

Why has the housing market been so resistant to change? There are a few factors that buttress the status quo:

Real estate is local; knowing the neighborhood has value;

The broker has a monopoly on listing information through the Multiple Listing Service;

Information asymmetry: people don't understand their options and what they can and can't do;

Complexity of mortgages, contracts, closings, makes buyers and sellers comfortable working with an agent, even if it is expensive.

Not only is real estate local, but the U.S. market is very different from other parts of the world. Fixed-rate mortgages are almost universal here, thanks to government intervention in the market, but rare elsewhere. Home mortgage interest-tax deduction is a cherished part of the U.S. tax code. And the standard 6 percent commission for real estate brokers in the U.S. is much higher than elsewhere in the world. In short, the U.S. market is highly inefficient.

Real estate is ripe for disruption. In fact, the process has already begun. Consider the following:

No. 1. Pressure on commissions: This has been an issue for decades. A New York Times article from 2005 “The 6 Percent Solution: Skip Real Estate Agents” references a variety of flat-fee and discount real-estate brokers. That has only accelerated in the ensuing years.

The Washington Post reported in 2015 of a “National Association of Realtors’ “DANGER” report -- which stands for the Definitive Analysis of Negative Game Changers Emerging in Real Estate . . . [that] rocked the real estate world with its acknowledgment that consumers are demanding lower commission rates and that brokers and agents are responding with new pricing models that ‘will most likely become commonplace in the next five to ten years.’”

The key, in my view, are changes to the information asymmetry mentioned above. Savvier homebuyers need less from agents. They can learn about neighborhoods via their own social networks and online resources. In short, the agent is less essential than in the past.

No. 2. Zillow, Trulia, RedFin and other mobile apps: Surveys show that almost half of all real estate searches begin online. But it isn't merely online that is driving changes. Ever since the smartphone became ubiquitous, home-sale information has been set free.

You can drive around a neighborhood with Zillow running and see what is for sale and for how much; what has sold and at what prices; and you can see picture of home interiors, take a virtual tour, learn the price history and find out what the real-estate tax is. In short, this is almost everything you used to rely on an agent to provide.

No. 3. Using data to price, sell and buy: I had put my last home up for sale during a tricky time: I had sold my first house at the peak of the real-estate market in 2006, which meant I also bought my next house at the peak, too. Getting out whole in Long Island's New York suburbs in 2014 was going to be a challenge.

I came up with a fun little Zillow hack that helped a lot; you have to register with Zillow.com to do it, but it is free and very useful. This is but one way to use Zillow data, but I am sure there are many others.

I searched for a house with as many similar characteristics to mine as possible: I included the same number of bedrooms, bathrooms, amenities, updated kitchen, school district, proximity to parks, waterfront and so on. The more detailed this set of parameters is, the better your results will be.

From this set, you can create two different lists: the first is of those homes most similar to yours that are for sale; the second is made up of similar homes that were sold during the past two years. This creates two price ranges -- what is for sale and what sold. Where those two price ranges overlap is the sweet spot for selling relatively quickly.

I found it to be a good use of market data -- we priced our house in the middle of that ask range, and sold it in less than a month within $10,000 of our asking price.

So yes, technology is changing housing sales. Despite the entrenched interests aligned against it, the coming disruption is inevitable.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:

Barry Ritholtz at britholtz3@bloomberg.net

To contact the editor responsible for this story:

James Greiff at jgreiff@bloomberg.net