Steve Murray sometimes gets together with other old-timers in the real estate industry, shares some wine and inevitably gets around to remarking, "I sure would've thought it would've changed more by now."
Murray, president of consulting firm Real Trends, has been tracking for 40 years how U.S. real estate agents do their jobs. And over the past decade, the internet has disrupted almost every aspect of a transaction that sits at the core of the American Dream. Everyone now has free access to information that used to be impossible to find or required an agent's help.
But as a new homebuying season kicks off, one thing remains mostly unchanged: the traditional 5-to-6-percent commission paid to real estate agents when a home sells.
While the internet has pummeled the middlemen in many industries -- decimating travel agents, stomping stock-trading fees, cracking open the heavily regulated taxi industry -- the average commission paid to real estate agents has gone up slightly since 2005, according to Real Trends. In 2016, it stood at 5.12 percent.
"There's not a shred of evidence that the internet is having an impact," Murray said, sounding like he almost can't believe it himself.
The stickiness of the real estate commission is a source of fascination for economists and curiosity for consumers who are doing an increasing share of the homebuying legwork themselves online. It also offers potential lessons for workers in other industries worried about the Internet's destructive powers. The Web has changed how agents hustle for a share of the estimated $60 billion paid each year in residential real estate commissions. But it hasn't taken their jobs. In fact, the number of agents has grown 60 percent in the past two decades.
It wasn't supposed to be like this.
Experts have been predicting the demise of real estate agents for years. Consider the title of a 1997 article in the Journal of Real Estate Portfolio Management: "The Coming Downsizing of Real Estate: The Implications of Technology."
In the mid-2000s, the arrival of real estate tech startups like Zillow, Redfin and Trulia spurred a fresh dose of anticipation. "Realtors' sacrosanct commission rates of 6 percent may be in danger," warned "60 Minutes" in 2007. Jeff Jarvis, a City University of New York professor who examines the Internet's effects, wrote a 2006 blog post predicting, "Real estate agents are next."
Agents thought so, too.
"The industry was fearful of the internet. They didn't think they'd have jobs," said Leonard Zumpano, a retired finance professor who for years ran the University of Alabama's Real Estate Research Center.
The Web automated and simplified huge swaths of a process that once was complicated and time-consuming. With a few taps on a smartphone, homebuyers and sellers now can find information that once required digging through musky deed books at the county recorder's office. And the new technology has made agents more efficient. In many ways, their job is easier now.
Yet agents stand to earn more in commissions today than in the pre-internet era, because of stable commission rates and surging home values.
In 1997, the typical commission on a median-priced U.S. home, adjusted for inflation, was $16,600.
Today, that commission is $20,131.
"It's a mystery to me," Zumpano said. "I would've expected commissions to go down."
In 2005, the Justice Department and the Federal Trade Commission held a workshop to talk about why commissions had not fallen more. The American Bankers Association argued that the commission rate could be cut in half in a truly competitive market. Attendees at the workshop appeared to place great faith in the power of the internet to lower commissions.
In a typical home sale, the commission is paid out of the seller's proceeds and split between the seller's and buyer's agent. The rate is negotiable. But the traditional rate has held firm, even as an agent's main advantage -- information -- has been eroded by the internet.
Experts don't have a good answer for why these commissions have survived the internet's onslaught. They point to several potential factors. A home sale is a massive financial transaction. It's complicated. And it doesn't happen often, with homebuyers staying put for an average of 12 to 13 years. So intimidated consumers keep turning to agents for help.
Regulations may have slowed the pace of change. Twenty states and the District of Columbia set minimum levels of service for agents, dissuading brokers willing to do less for lower fees. Ten states also ban agents from rebating a portion of the commission to their clients. But commission rates do not vary wildly among these states, analysts say.
The National Association of Realtors also has worked to reinforce the role of agents through lobbying and advertising, sometimes in unconventional ways. Last year, the group struck a deal with the ABC sitcom "Modern Family" to work into an episode that character Phil Dunphy is a true real estate expert -- a licensed Realtor. And national broker Century 21 is running ads with the tagline, "Good luck, robots," adding "there's no robot for insight or hustle or a handshake."
The efforts appear to be working. The association reports 89 percent of home sellers used an agent in 2016 -- on par with the previous five years. At the same time, for-sale-by-owner transactions fell to their lowest rate -- 8 percent -- since the association began tracking the data in 1981.
"Who is going to write a contract? Fill out a disclosure statement? Anticipate what's coming on the market?" asked association president Bill Brown. "There's a human element to buying and selling a home that can't be replaced."
But the internet is expert at discounting that human element.
That was the worry that greeted Zillow when it was launched in 2006 with executives from Expedia and Hotwire, travel sites that were on their way to pushing out human travel agents.
"There was fear in the beginning," Zillow chief marketing officer Jeremy Wacksman said.
Agents fought to keep Zillow from accessing private databases known as the multiple listing service -- where agents post homes for sale and which many considered an agent's ultimate advantage. Zillow eventually tapped those listings. But it decided not to challenge the industry head-on, opting to focus on real estate ads.
The reception was harsher for Redfin, a tech-heavy broker in Seattle that tried to cut agent commissions. It started out selling homes for a flat $3,000 fee and rebated part of the homebuyer agent's commission.
"Competing agents have threatened us with violence, intimidated our customers and tried to block their offers," Redfin chief executive Glenn Kelman said in testimony before Congress in 2006.
Redfin changed course. Today, Redfin more closely resembles a traditional broker. It has its own local agents. It sells homes for a 1 to 1.5 percent commission. Redfin agents are paid a salary and a bonus tied to customer satisfaction.
Redfin remains a small player, with 1 percent to 2 percent of the U.S. market. But in some big cities such as Chicago, Seattle and Washington it holds a 5 percent share. Kelman said he believes Redfin will continue to grow as a new generation of buyers and sellers enters the market.
"Kids who grew up buying textbooks on Amazon are now buying houses on Redfin," Kelman said.
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Other agents are not standing still. They have adopted technology, too.
A peek at Samina Chowdhury's smartphone shows how.
A veteran agent in Ellicott City, Maryland, Chowdhury has one app that scans closing documents and one that writes contracts. Another accepts digital signatures. She has an app that allows her to keep tabs on sales leads and another to unlock residential lockboxes. She uses an online video editor for making home tour videos. And while Chowdhury speaks five languages, if she runs into trouble she can call up a translation program.
"None of these technologies were here 10 years ago," she said.
Chowdhury has seen other agents struggle with the pace of change. But she's done well. She estimates that she made $300,000 last year.
The push of technology into real estate is what motivated Chris Speicher to leave his job at Microsoft to join his wife, Peggy Lyn Speicher, as a real estate agent. He figured he could help.
"It's no longer about going to the real estate agent because they hold 'the truth' -- they have the data," Chris Speicher said.
They work in a team model, with staff divided among different duties. They target potential homebuyers with online ads. They get leads from Zillow. Last year, the Bethesda, Maryland-based team helped close $100 million in deals.
But Speicher, like many agents, feels the pressures of change, too. He has noticed more pushback from homebuying customers, driving that commission down closer to 2.5 percent.
Murray, of Real Trends, found that commission rates tend to fluctuate with the health of the housing market -- almost as if the internet hadn't happened.
In 2005, at the housing market's height, buying and selling were easy. The market was tight. And the national average commission stood at a low 5.02 percent. Four years later, during the housing crash, with almost twice as many houses on the market, commissions rose to 5.38 percent.
Now the commission rate is falling as the housing market heats up again, Murray said.
He noted the rate has drifted down 16 percent over the last 25 years, but surprisingly, all of that decline happened before 2004.
Murray does see one way the internet could attack commissions: It could consolidate the highly fragmented market for agents. Today, two-thirds of consumers still find their agents through knowing them or by a personal referral. But if the internet weakens that bond, popular agents could win more market share.
"And they're going to cut rates," Murray said. "They can be more productive now, so they'll do volume instead. They'll be more prone to discounting."
It will be agents doing what the internet hasn't.