Speaker 1:
From the library of the New York Stock Exchange, at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision in global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years.
Speaker 1:
Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism, right here, right now, at the NYSE and at ICE's exchanges and clearing houses around the world.
Speaker 1:
And now welcome Inside the ICE House.
Pete Asch:
Over the past year, I've had a crash course on the mortgage finance industry with the acquisition of Ellie Mae and launch of ICE Mortgage Technology. It was the perfect time to learn more about the space because my wife and I decided to join millions of others in refinancing in response to historically low interest rates.
Pete Asch:
But also in doing so, I became a data point on Ice Mortgage Technology's millennial tracker, albeit categorized as a geriatric member of that generation. The tracker was created to offer insights and analysis to the mortgage industry on borrowers born between the years 1980 and 1999.
Pete Asch:
I often find myself hovering over that online dashboard, watching how my demographic is flexing its financial muscle. Interestingly, according to the most recent data, has spread away from the coast towards the middle of the country. The implications of that migration will certainly be the topic of many podcasts to come. But today we're focusing on the homes, not those inside them.
Pete Asch:
The price of houses being sold is continuing to rise. And according to a recent press release from ICE Mortgage Technology, new home sales surpassed refinancing for the first time since 2019. Fortunately, we have an expert Inside the ICE House today.
Pete Asch:
Our guest today is Realogy Holdings' CEO, Ryan Schneider, who has been at the thick of the real estate frenzy as his company has reported more than 1.4 million of those transactions I've been mentioning. He joins us to talk real estate in the future, the technology supporting it today, and location, relocation, delocation of the housing market.
Pete Asch:
Our conversation with Ryan Schneider coming up right after the break.
Speaker 3:
Whether it's markets, exchanges, or networks, connection makes everything possible. The connection between data and technology, innovation, and expertise, and most of all, between people and opportunity.
Speaker 3:
For over 20 years, ICE has transformed markets, products, and processes to make things work better, faster, smarter, from modernizing energy and commodity trading to revolutionizing the bond markets. Whether it's the world's largest stock exchange or the dream of home ownership, we do more than see the big picture. We create it.
Speaker 3:
You may not know our name, but we bet you know our network. ICE. Make the connection.
Pete Asch:
Our guest today, Ryan Schneider, is the President and CEO of Realogy Holdings Corporation. That's NYSE ticker RLGY, the leading and most integrated provider of US residential real estate services, comprising of franchise, brokerage, relocation, and title settlement businesses, as well as mortgage joint venture.
Pete Asch:
Ryan joined Realogy after 15 years in senior roles at Capital One Financial Corporation which, of course, is NYSE ticker COF.
Pete Asch:
The commercial that our audience just heard that, before I introduced you, ended with ICE's tagline, "You may not know our name, but you certainly know our network." And as I was praying for this podcast, I kept thinking the same thing for your company, where you operate a number of well-known brands, including Century 21, Coldwell, and Sotheby International, just to name a few. But yet, Realogy's not necessarily as well known.
Pete Asch:
And I was thinking about sort of the other connections to ICE you might have. And I was going into your background, and you have a PhD from Yale in Economics, and your dissertation focused on exactly what we do here at ICE, which is risk management, hedging, and derivatives.
Pete Asch:
What attracted you to economics?
Ryan Schneider:
Well, I was really lucky. I really have a good mathematical side to me, as well as the strategic and leadership side that some of the jobs that I've been into require, and I was just fascinated by the field. And so, when I finished my undergraduate education, I decided I want to go ahead and continue to study it. I was especially fascinated on the macroeconomic and the financial side, which is what I specialized in. And I wasn't sure I was going to be an academic, actually. And, in fact, when I got my PhD, I decided not to go down the academic path because I was much more fascinated by what's happening in the macro and the financial area in the business world. So, I'm so glad that I went down that kind of academic learning journey. It has served me well, from a thinking standpoint and a context standpoint, for my whole career.
Pete Asch:
After getting that PhD, you then took it to McKinsey, which is really involved in many of the macroeconomic things that you studied.
Pete Asch:
What kind of lessons did you learn working with McKinsey? And how does that stuck with your career? You mentioned pulling some of the macroeconomics across your career. What about those early years at McKinsey helping companies?
Ryan Schneider:
Well, McKinsey was a wonderful place for someone to go to really learn and have different experiences in the business world. And the power of just great talent being around you is probably the biggest lesson that I took away from McKinsey. But I also got to see so many different companies operate differently that when I transitioned into an operating role with a large company in Capital One, I felt like I had a good baseline of different ways to have seen people succeed. And I was able to take kind of the pieces of each of those that were powerful to me, make them my own a little bit, and use that as my transition from consulting to actually being an operating leader.
Pete Asch:
You take these lessons from McKinsey, go to Capital One, which is one of the largest credit card issuers in the world. And you worked in both the credit card and also auto financing divisions.
Pete Asch:
What were some of the initiatives you did there? And how did that prepare you to then move into real estate?
Ryan Schneider:
Well, the greatest thing about Capital One is it's a phenomenal company, and it has just an excellent ability to retract and retain great talent. And, in my case, they were fantastic about giving me growth opportunities. As a strategic consultant, they didn't ask me to come in as a strategist. They asked me to come in and run an area on day one, which was a phenomenal learning experience. And then they continued to expand my roles. I got the chance to run our auto finance business, which was the first general management role that I had. And then, right before the great recession, I got asked to run the credit card business, which is the biggest part of the company. And I ran that for nearly a decade, and really was proud of both the things that we did to steer the company through the great recession, but also the growth and expansion of that kind of market-leading credit card business that Capital One has.
Pete Asch:
And you mentioned the great recession, which was led on partly by an issue in the real estate market. How aware were you at that time of that space of the economy?
Ryan Schneider:
Really pretty tangentially aware. Capital One did own a smaller mortgage company, so I saw some of the issues secondhand. But, thankfully, I wasn't deep in the middle of it. Ironically, like you mentioned, Realogy is not a very well-known company as a holding company, but everybody knows our brands; Coldwell Banker, Sotheby's International Realty, Century 21, Corcoran, Better Homes and Gardens Real Estate, ERA Real Estate. And the power of Realogy going through the great recession and coming out of it successfully is a good corporate memory that the place has. And there's a lot of lessons with what happened both with banks and with real estate that I try to absorb and use to kind of think about how we run the company in the future. And it's really good to have the learnings from both financial services and real estate combined which, again, I get the benefit of now.
Pete Asch:
Yeah. And you joined Realogy in 2017, I believe. Let's go back four years ago. What attracted you to the company? And what made you say yes to when they first asked you to be the President and COO, and now as President and CEO?
Ryan Schneider:
I thought Realogy was a great company with even greater potential. And I still believe it, and I believe our results, especially the last year, are demonstrating that in terms of some record earnings, substantial improvement in our balance sheet, some of the growth that we've been driving, where we're incredibly excited about it. And a lot of that is anchored in digital and technology improvements.
Ryan Schneider:
So, my thought on Realogy back in 2017 was this is the market leading company. We lead the market in owning brokerages, in franchising brokerages. We've got a great title business, a great mortgage business. We're the leading relocation company. And I thought that was such a powerful base to grow on with technology and data transformation, which is what's happening out there in the world.
Ryan Schneider:
Now, real estate as an industry, I think, is still working through some of that transformation, but I thought there was a great opportunity to use this market-leading company with the most data in the industry, for example, to lead some of the transition to the future of real estate.
Ryan Schneider:
And some of the success that we've had in the last 12 months comes from some of the technology and data investments we made back in 2018 coming to fruition, improving the experience for customers. And we've got some pretty exciting thoughts on how we can continue to improve the real estate transaction and simplify it for customers in the future. A lot of people in the world are trying to do that. We come at it from this position of strength with the leading market share and the scale that we have. And I like using that position to go forward.
Ryan Schneider:
Capital One was a company that we think we did a phenomenal job leading a lot of the technology and data transformation in financial services. And my learnings from there have really, I think, helped me apply them to Realogy.
Pete Asch:
And we're definitely going to go deep into the technology and the transformation. But I want to go back to something you just sort of mentioned, which is that idea of the individual person. And, in Realogy's most recent corporate sustainability report, you noted, "The company's responsible for helping people make one of the most important decisions of their lives, buying a house."
Pete Asch:
How do you view that? I mentioned it myself. We refinanced, and it was an arduous task with hundreds of papers to sign and collecting things that we never thought we'd have to find again after buying a house the first time.
Pete Asch:
How do you view, from a sustainability aspect, the role you play in making sure that there's a roof over people's heads?
Ryan Schneider:
Well, let me start with I think you should have used us to refinance because, with our FlAschClose mortgage product, you don't have to do any paper. It can all be done digitally to do your refinancing, which is an example of us improving the customer experience and using it to drive better results for our shareholders.
Ryan Schneider:
But look. One of the things I think is the most exciting thing about Realogy is our mission is nothing but good for customers and people out there in the ecosystem.
Ryan Schneider:
So, for example, we are helping. In those over a million transactions... That's over a million folks who need to get to their next phase of life, whether it's buying or selling a house. Almost all the time, those are very joyous situations. And even in the times when they're challenging, the fact that one of our agents is a trusted advisor to help people through a tough time easily, we think, is a very powerful thing.
Ryan Schneider:
We have 200,000 agents here in the US and 2400 franchisees. Every one of them is an entrepreneur building their business, and we are here to support them. And we love that aspect of our mission. And then, finally, our agents and our franchisees tend to be very strong leaders in their local communities.
Ryan Schneider:
This is an industry that has a very positive mission to it, I believe, for both the end customer and the entrepreneurs who are part of it. And we like being a leader in that and supporting all of that ecosystem. And it's part of the thing that attracts me and others to this industry and to our company.
Pete Asch:
One of the things you've done and, actually, even early on in 2019, when you're featured in a cover story for Real Estate Magazine, you noted that consumers are the most important aspect of the industry. You mentioned some of the ways to make it easier. But one of the things that that came up in our research is... What is RealSure?
Ryan Schneider:
We're doing everything we can to make the transaction easier for the consumer. And there are two legs to that. One leg that's really important is like the mortgage example I talked about. How do we digitize and simplify the execution of today's transaction? We've done that in mortgage, we've that in title, we're doing that in our core business, all to make it easier for the customer.
Ryan Schneider:
But we have a bigger vision, which is how do you actually take the buying and selling of the house and turn that into more of a single transaction that makes it even easier for the customer?
Ryan Schneider:
So, our RealSure product gives the customer a guaranteed offer on their house, so they know it's going to sell. That offer's good for 45 days. And then, one of our agents will try to sell the house in the market during that time period. And if it sells, which it often does, the customer keeps all the upside and they pay a lower fee than some of the other versions of people trying to do this. And then, we're going to try to help the customer buy their next house. Because they have that guaranteed offer, they can bid like a cAsch buyer.
Ryan Schneider:
So, along with just improving the customer experience of the current transaction, which is an important thing to do, for us, RealSure is a vision of where we think the world can go to make it more certain and make it easier for the customer, not just to sell their current house, but to be able to bid as a cAsch buyer on their next house in a way that, hopefully, takes even more friction out of the transaction. Because, remember, buying and selling a home is just a massive financial investment for people. It is where most people's wealth is. And it's also can be a very stressful process because of that fact. And so, anything we can do to create more certainty and simplicity, both in the transaction today, but also to redesign the transaction in the future with RealSure, is something we've got a lot of passion about.
Ryan Schneider:
And so, we've really upped our investment in RealSure. It's now in 21 markets to really try to help simplify the transaction for customers going forward. And we're excited about it. And we're going to keep investing in it along with the business partner that we're doing it with together.
Pete Asch:
You mentioned buying a house is usually a joyous occasion, that it's also a stressful occasion. One of the other things that is normally also a joyous occasion, and also a stressful occasion, is changing jobs. And one of the things that your company offers through Cartus Corporation is global real location and workforce development. How has that changed?
Pete Asch:
I, personally, five and a half years ago, sold a house in the West Coast, bought a house in the East Coast, moved my whole family over to New York to work here at the New York Stock Exchange. What does that look like today? And.
Pete Asch:
I can tell you back then, it was a bit stressful. Did not have a RealSure situation set up there. But where are people asking for help today as they're beginning to do that, move cross-country, change the next phase of their life, buy, sell houses, move?
Ryan Schneider:
Yeah, it's a great question. We're seeing these amazing trends that I think have been in the works for a while, but are really coming to fruition. And you've talked about a couple of them in this, as you've set this up, right?
Ryan Schneider:
One of those trends is your generation, the millennials, really coming into the housing market. The way the demographics would predict, it's really happening. The low interest rates you mentioned have helped enable a lot of that. And then, there is this large trend of people moving to these different geographies, especially the rotation to these attractive tax and weather destinations like Texas and Florida, as well as, frankly, more movement going on into the suburbs. And that's led to a strong housing market but it's also led to the challenges you're talking about. What we've seen is two things.
Ryan Schneider:
One is, we support kind of about half of the Fortune 100 in moving people when they move people. And we're always trying to make that as seamless as possible. But the other thing is the power of our scale, being the largest player in the industry, is the power of the referral networks that are happening to make customers' lives easier, right? It is the agent in California who's connecting with the agent in New York to help someone transition there that creates, not just good business for us, but a better customer experience. It's having products like RealSure that can make life people's easier moving.
Ryan Schneider:
Or another product we have in partnership with ANGI called RealVitalize which, if you're selling your house, it does a turnkey solution to do whatever work you need done to get it ready to sell; painting, light construction, cleaning, whatever, all coordinated by ANGI, in a turnkey way. And no money upfront from the customer. They just pay at the closing. But it's another thing to make the experience of selling your house easier for people.
Ryan Schneider:
And we're continuing to bring more of those products to the market. And we see them resonate because, again, we believe the customer experience in this business absolutely can be simplified and improved. And we're coming at it for multiple vectors to do that.
Pete Asch:
And I think one of the things that happens with technology is that the consumer may be ready to accept it but then also you need your franchises and the people you're working with in the brokerages to accept it as well.
Pete Asch:
What's been your strategy for revolutionizing how agents think about the role of technology in buying or selling a home, particularly agents who may have been decades of what's been a people business, and now you're asking to use this technology?
Ryan Schneider:
Well, it still is a people business, to be blunt. And one of the cool things about agents is they're incredibly entrepreneurial. And when you have 200,000 entrepreneurial agents like we do, the biggest insight I've had joining this industry is that you're never going to have one technology that's going to work for all of them because each of them is entrepreneurial and each of them does business a bit differently.
Ryan Schneider:
And so, our approach has actually been to create more of an open architecture for technology. Again, because agents are independent contractors, we can't demand that they use anything. But what we choose to do is we provide some really good technology as Realogy or as our brands, like Coldwell Banker or Sotheby's International Realty, to agents. But we also have built, and are continuing to build, what we call an open ecosystem. We're using APIs to integrate with other companies' products that can support agents.
Ryan Schneider:
And if an agent wants to use one of our products, which we provide for free as part of our value proposition, that's fine. But we also provide some third-party products to others as part of our open ecosystem. And we've also got the system architected so that other companies can plug in, if it's something our agents want to use.
Ryan Schneider:
So, our realization is this is a people business, I think, will remain a people business but you've got to get better using technology to help on both productivity and efficiency. And our approach to dealing with the adoption challenge you mentioned is not to mandate one thing because we don't think one thing fits all in a very entrepreneurial, a couple-of-hundred-thousand-agent universe. It's to build more of an open ecosystem where we have some great first-party products we provide, some great third-party products that we curate, and we're agnostic to which ones our agents want to use. We want them to know if you're a part of our ecosystem though, you can do business the way that suits you.
Pete Asch:
And the proofs have been in the reporting numbers. In Q2, Realogy reported 2.3 billion in revenue.
Pete Asch:
You talked a little about the environment but, also, can you just talk about the inside Realogy space? How does all the pieces that we've been talking about, brokerage, franchise, title group, how do you fit all that together into what you call a value circle? And how does that differentiate you from other competitors?
Ryan Schneider:
Yeah. Well, if you look at us versus other competitors, we have, I think, probably the most integrated value circle in that we do own brokerage ourselves, right? We're also a franchisor of brokerages but our franchisers know we own brokerage. So, they know we are in the trenches with them, and so we understand the issues they face every day, and we can do a better job as a franchisor.
Ryan Schneider:
We've also got title and mortgage businesses deeply integrated into our company. And a lot of our competitors don't have those, or they don't have them anywhere near our scale. And you can see that we've been able to impart with some, actually, digital technology improvements, increase our earnings in those title and mortgage businesses from under 100 million to over 200 million back in 2020. And we continue to have good success here in 2021.
Ryan Schneider:
So, we've architected probably the most integrated version of real estate to support the customers through their journey, not just with the agent, but with the title and the mortgage side of it. We actually also have an insurance business that's smaller but growing that can also be part of that integration to help the customer. Again, all to make it simpler. And if we can deliver this, especially digitally, to customers like we're doing more and more, we think it's a powerful integrated story that not all of our competitors can match.
Pete Asch:
And when you think about it, insurance, mortgage, title, what's nice about digitization is that then allows you to do things like add machine learning, add artificial intelligence.
Pete Asch:
What role do those technologies play in, not only your growth strategy but also in simplifying the process for the end consumer?
Ryan Schneider:
Well, they play a big role. One of the things that attracted me to Realogy that I mentioned earlier was, as the largest player in the industry, we have the most data scale in this industry, both historically but also on a real-time basis, given the number of transactions that we're participating in every single day. And we get that data, not just from brokerage but from title, and mortgage, and other vectors that we've got.
Ryan Schneider:
And so, we've got a lot of investment anchored in our Oakland, California, data team to utilize AI, both to help us run the company better but also to build products that help our agents and customers have a better experience or have greater insight.
Ryan Schneider:
And The Wall Street Journal did an article recently. It called out some of the good AI things that we've done. We're increasingly running our company more efficiently by using the data scale to build these robotics process automation processes so that they can do the work effectively, the AI can do the work, not a human being can do the work. And the more we can do that, we can lower our cost base to reinvest in the customer, reinvest in the agent, and invest less in how we run the back-office side of things.
Pete Asch:
After the break, Ryan Schneider, President and CEO of Realogy Holdings Corporation, I turn our attention to culture and the future.
Pete Asch:
We'll be right back after this.
Speaker 5:
We started with a vision to transform energy markets, using technology to boost transparency and level the playing field. That vision and customer focus continues to drive how we look at opportunities and challenges in our industry.
Speaker 5:
Today, we connect participants around the world so they can trade, hedge, invest, and raise capital. We establish prices across asset classes and create opportunity to solve complex global problems. We provide pricing that markets rely on, transform the way business is done, help companies grow to fuel innovation, and provide data to advance economies and society while we invest in our communities.
Speaker 5:
Twenty years ago, we saw an opportunity to create a market driven by customer needs. Today, our markets create endless opportunity for participants around the world, and our team is focused more than ever before to ensure the markets continue to function properly.
Speaker 5:
On behalf of my colleagues around the globe, thank you from Intercontinental Exchange.
Pete Asch:
Welcome back. Before the break, Ryan Schneider, President and CEO of Realogy Holdings Corporation, and I were discussing his background and his company's mission.
Pete Asch:
Realogy has won several awards, including the designation of one of the world's most ethical companies, and is one of LinkedIn's 2021 Top Companies in the US, among many other awards.
Pete Asch:
Can you talk about when you're building a culture, what you seek to do at Realogy?
Ryan Schneider:
Absolutely. And, actually, we've been named to the World's Most Ethical Company List for 10 years in a row, which we're really proud of. We've been named to the Great Place To Work List for the last three years. We were excited for Forbes 2020 Top Companies for Diversity, and for LinkedIn to now put us on one of the Top 50 Companies for Talent earlier this year was just phenomenal. And we didn't apply for that award. No, it wasn't an award that you apply for. LinkedIn just kind of did their work, and then designated us as one of the Top 50 Companies for Talent. So, we're really excited about it. We don't do the things we do for the awards but we think they're good recognition of the progress that we're making.
Ryan Schneider:
Culturally, look. You've got to have a strong, ethical integrity foundation. I believe you've got to have excellence, and you've got to do the right thing. But beyond that, you can see the focus on talent built into some of those awards. And creating a culture that's going to attract great talent, and then let that great talent be great, is a very, very powerful thing. And that is the journey we're on as a company from a culture side. We want to be a phenomenal place for people to grow and expand their careers, have a big impact on the world. And the fact that we get recognized for our progress in the last three years is one of the things I am the most proud of because culture is everything.
Ryan Schneider:
And again, I started out with this combination of doing the right thing, and excellence is what you need. And I love how the excellence really shows up in talent as the most important thing.
Pete Asch:
How have you kept employees and colleagues engaged over this period, and make sure to preserve and grow that culture that you've built?
Ryan Schneider:
In our case, we have about 10,000 employees. Sixty-plus percent of them have been in the field every single day, supporting agents, supporting customers. So, for most people, most of our company has not actually had a change in their working routine other than the health and safety protocols that are the most important thing that we do to take care of our folks.
Ryan Schneider:
But for the folks who have been able to move to more of a work-at-home or hybrid environment, we've actually felt good about out how we've stayed connected as a team. And it's been really nice in the last number of months to be able to start getting teams back together in person, again, with the good health and safety protocols, and especially with the progress around vaccines.
Ryan Schneider:
And the reason that's powerful is we all, I think, were living a little bit off the culture that we'd built up until COVID hit, and staying connected over video was harder but I felt good about how we did it. And, in fact, we're going to move to a hybrid model for our corporate offices going forward.
Ryan Schneider:
After Labor Day, we're only going to have people in the office for collaboration, right? For corporate offices, we're going to let people work from home if they want. I'm not going to have an office anymore. We're knocking down walls. And what our goal's going to be, have people be together in the office when they need to collaborate with each other but don't have people come into the office just to work with their heads down because we found that people can be as, or more, productive at home. And we found that, for many people in corporate roles, they prefer that flexibility, and we're here to retain talent, and it's going to help us even recruit talent more broadly. We've brought in new talent in multiple geographies in the last six months. And we think there's a real strong continuation of that trend as we operate more as a hybrid company at the headquarters level. And then again, in the field, our employees will be there supporting our agents and customers every day like they've been through the whole pandemic.
Pete Asch:
You mentioned knocking down walls but what does that look like? Are you adding more conference rooms? We've talked to CEOs who are getting rid of conference rooms because they think it's unfair to allow congregations to occur when not everyone can be there.
Pete Asch:
What is it physically going to look like in that headquarters?
Ryan Schneider:
It's physically going to be a lot less walls, and a lot more open space and, frankly, kind of no offices, which isn't new. Some companies have done this. But I had a nice big office in the traditional building. I'm not going to have an office.
Ryan Schneider:
We absolutely will have conference rooms. People need places to go in private to do work, to do meetings, et cetera. And we're all going to have to get better, like we've done. I think in the last 18 months, of having part of the population in the room, and part of the team on video. And that's not a totally new thing. Like we've had people remotely for years as a company. We have a pretty distributed business, so we've always had some people who didn't work out of our headquarters.
Ryan Schneider:
But I'm excited to have 250 different people in the office every day, depending on what collaboration is needed, and to create the flexibility for people to have to build better lives around this greater choice about how and where they work.
Pete Asch:
You and Realogy signed the CEO Action for Diversity and Inclusion, which aims to rally the business community to advance diversity, equity, and inclusion initiatives, to commit to implementing a trusting work environment, and create a more equitable and inclusive workforce.
Pete Asch:
Why was it important to join this initiative? And how will this new office space help support those initiatives?
Ryan Schneider:
Well, it's really easy to join an initiative when you're already doing it, right? And so, working toward those goals isn't new for Realogy. It's not new for me. And so, it's very easy to want to make it clear that this is important to us, especially if we're already doing it. We don't tie, probably, our new mode of work to our diversity efforts that directly because the new mode of work we think is beneficial to everybody.
Ryan Schneider:
But back to your point about how do you reach people, right? The fact that we're now more able and willing to hire someone who doesn't have to move to New Jersey and live near the corporate headquarters, we think that opens up the population of people we can recruit from, and that can be people of all different types. And so, if you're not working in a kind of hybrid or virtual way, you probably are putting some constraints on your recruiting just because of the geographic focus or geographic requirement you're giving people. But taking that away does open the funnel for more people to consider Realogy, and for us to consider them. And again, hopefully, that helps on all types of people, and so it can be a positive, including in our diversity and inclusion efforts.
Pete Asch:
You're also thinking long term, and not just bringing new people at the base level but also how do you promote through, not just for Realogy, but also for your brand-affiliated brokerage owners.
Pete Asch:
You introduced Ascend, an intensive 46-week executive leadership program designed to ensure a smooth and profitable business succession planning.
Pete Asch:
What is that program like? And why is it important to you to make sure that the franchisees are prepared for their own future?
Ryan Schneider:
Well, look. Part of our value proposition as a franchisor is we only succeed if our franchisees succeed. So, we have a strong incentive to make them successful. And we think taking a long-term [inaudible 00:33:06] that they take on their family business is a really important thing.
Ryan Schneider:
But because we are a large company, because we run our own brokerages, we think we have some real insights that can be helpful to many of our franchisees. And we think there is a real power in building a network, right? The franchisees learn as much from each other, as they go through this program, as they do from us. So, we think that's a great kind of program to bring in to help our franchisees succeed more and build their next generations of leadership.
Ryan Schneider:
We're very excited about it, and proud of it. The class fills up very quickly, and it's just another commitment to helping make our franchisees successful over time.
Pete Asch:
You haven't been shy to make commitments to big things, whether it's helping franchisees advance their own businesses, and plan for succession, or looking at the overall real estate market. Realogy was the first residential real estate company to endorse the Equality Act, and also to support amending the Fair Housing Act to include LGBTQ as a protected class.
Pete Asch:
From a broader perspective, how do you look at your role in ESG, not just for your company, but for the entire real estate sector?
Ryan Schneider:
Well, look. We're the market leader in this industry, so we believe we should be leading on a number of topics. And many of these topics, like the one you just mentioned, isn't a hard choice to make, not as any sort of a political statement, but at the end of the day, we are all about housing for everybody, literally everybody. And so, we're here to support everybody in their journey to get into and out of housing as their life evolves. And so, why we wouldn't support something that's tried to continue to expand the access to housing would be crazy on our part. So, we do support it. It wasn't a hard call. And when the pandemic hit, we tried to do some leadership in WAschington, DC, to help our agents and franchisees, which we think we succeeded on, in part with the US Chamber of Commerce and some other bodies down there.
Ryan Schneider:
And we just think, as the industry leader, we have a leadership role on how the industry evolves, on how we bring talent into this industry, how we support people of all types going through their home buying and selling journey. And we're excited to do it.
Pete Asch:
As you mentioned, as the industry leader, you also can see, on a macro scale, the big things going on in the housing market.
Pete Asch:
What are the trends you're seeing now? And how are consumers approaching the housing market, either in what you've seen happening or what you predict for the near and longer-term future?
Ryan Schneider:
Well, look. We really like what we're seeing in the housing market. You opened this podcast with a few things about maybe the housing market slowing down. We're actually not seeing that in our data the way that you described, but that may just be that we are outperforming. As you mentioned earlier, we've gained market share for four quarters in a row, we are at record earnings, and we've improved our balance sheet to its best position it's ever been in as a public company. So, we're really excited for our progress, strategically, and how it's showing up in our financials. So, that's a really important thing.
Ryan Schneider:
We do see a pretty strong, positive momentum for housing, and it comes down to three things in our view. And we've talked about all of them a little bit. But the first is the past year and a half has really changed the world in terms of things like remote work, and where people want to live. And you're really seeing people move from one part of the country to another. You're seeing people find houses that better fit their needs for work from home, and things like that. And all of that's driving more housing transactions. And we see that trend continuing as you watch even like the moving data of who's moving to Florida, Texas, and things like that.
Ryan Schneider:
The second trend is the millennial trend, right? Your generation has been lagging my generation in home ownership but they've been moving along at the same pace, but like five or seven years behind. Well, in the past year or so, your generation has accelerated. The millennial generation has really stepped up on the home ownership side, if you look at some of the census data you talked about. And there's a real demographic trend that's going to continue there. It's just the math of the demographics.
Ryan Schneider:
And then, finally, the fact that we are at a historically low interest rate is helping everybody afford homes in a way that would be harder if rates were twice as large, or if they were three times as large that they've been sometimes in the past.
Ryan Schneider:
And so, that combination has us bullish for housing. It is a cyclical business. We will see, but our data, and we gave out our July data in our earnings call at the end of July, continues to show some pretty strong strength in the housing market, for us at least. And because of those three factors, we're pretty bullish about housing for the future.
Ryan Schneider:
And, by the way, we're always rooting for more housing, right? We want the builders to build as much as they can because we think America does not have enough houses, given the population growth and the household formation.
Ryan Schneider:
But we're excited about what we're seeing in the numbers, and what it means for the success of our business.
Pete Asch:
Well, everything you're working on, and everything you're touching, what are you most excited for in the future, going forward with Realogy?
Ryan Schneider:
Well, I'm most excited for what we can do to make this even easier for the consumer, right? I'm most excited about the RealSure product that we're rolling out in a very large way across 20-plus cities.
Ryan Schneider:
But also, I'm excited how we are leading the way to digitize the transaction. When you think about innovation, everyone always thinks, "Oh, the innovation's going to come from two guys in a garage," right? Well, the reality is, I think there's real power in large industry leading companies like Realogy disrupting ourselves and leading the innovation in an industry. And that's what we're here, not just trying to do, but we believe having success doing when you look at our numbers. And so, we think we're just getting started on that journey to see it translate into our strong financials for our shareholders is very exciting for us. We are here to help people get into houses. We're here to help entrepreneurs, of agents, of franchisees, grow their business and make their lives better. And we like the role we play in society. And we like the financials that we can deliver for our shareholders.
Pete Asch:
Well, thank you so much, Ryan, for joining us Inside the Ice House.
Ryan Schneider:
Thank you for having us.
Pete Asch:
That's our conversation for this week. Our guest was Ryan Schneider, President and CEO of Realogy Holdings Corporation.
Pete Asch:
If you like what you heard, please rate us on iTunes, so other folks know where to find us.
Pete Asch:
Got a question or comment you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @ICEHousePodcast.
Pete Asch:
Our show was produced by [Stephane Caprose 00:39:56] with production assistance from Ken Abel.
Pete Asch:
I'm Pete Asch, your host, signing off from the library of the New York Stock Exchange.
Pete Asch:
Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified.
Speaker 1:
Neither ICE nor it's affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes.
Speaker 1:
Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice.
Speaker 1:
Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
