So many lives are tied up in global real estate markets. A downturn in the value of real estate can upend lives, while an uptick can enrich them. Those with money in a home, apartment, building, or parcel of land should be aware of what the markets are saying. For those not inclined, it's not always fun trolling Zillow to monitor changes in home values or rent prices. That's why we've turned to industry insiders to fill us in.
Here's what those industry pros told us about the future of real estate:
1. Glenn Orgin, founder of Richr
“Currently, selling homes is very expensive. This expense is driving a trend toward more automation for increased efficiencies. The future of real estate is all about transaction automation to enable buyers and sellers to seamlessly transact on their desired home purchase using one platform.”
2. Luke Babich, CSO at Clever
“Information about homes has become more accessible than ever before. Sales history, home details, and pricing information are all available online to the public, dramatically reducing the friction and costs in the home buying process.
As the costs and barriers to *finding* a home fall, other costs in the process become a bigger problem. Now, the transaction costs of selling a home are a bigger expense. The process of getting a home ready for sale, pricing it correctly, and finding reliable professionals is still inefficient and expensive: it's the next frontier for the real estate industry.”
3. Chris Smith, Co-Founder of Curaytor
“Fast, frictionless and fun. People want things instantly. They want them drama free. And they want experiences that are enjoyable (and thus shareable). But the future of real estate also looks like the past in many ways. People (agents) + Technology (MLSs) assisting you with the largest purchase (or sale) of one's life.”
4. Grant Cardone, Real Estate Investor and CEO of Cardone Capital
“Important to realize going forward that all real estate is not created equally. In the past, it almost didn’t matter what kind of real estate you invested in you could make money. That will not be the case going forward. Single-family homes will prove to be a terrible investment and I believe America is waking up to that fact right now — that buying a home is not an investment but a very expensive proposition that costs money and mobility.
Retail and office will continue to be speculative at best due to disruptive technologies. Apartment complexes that offer security, amenities, built in community and mobility will lead the way due to changing desires of millennials and more importantly boomers.”
5. Adam Hooper, co-founder and CEO of RealCrowd
“Real estate as an industry has always been slow to adopt technology, but this is rapidly shifting and the pendulum is swinging heavily towards quickening adoption. Everything from efficiencies in property and building management, the capital markets, sales processes to blockchain is now on the table. Driving this shift is the rise of younger, more tech-savvy executives that are coming into positions of leadership and bringing with them a much more open view into how technology will disrupt the industry.”
6. Avi Sinai, Owner of HM Capital
“The future of real estate finance is private. Even with a booming real estate market – it's hard to get a loan. Banks are too slow to adapt to trends in real estate. Ask how many bankers will lend on a second house with AirBnB income – the answer is not many.
Peer-to-peer lending is the future of real estate – where parties agree to terms and borrowers are unchained from old barriers of ‘credit scores' and past mistakes. It will bring more buyers into the market and allow investors with cash to put it to work, earning good passive income.”
7. Dominique Burgauer, CEO of Archilogic
“Almost every stage of a building's lifecycle will be managed online. From construction and furnishing to sales and maintenance, the real estate industry will be online.
The highly-discussed concept of ‘digital twins’ will not appear overnight, but we can already see that a new standard is forming from the adoption of data-led tools by leading innovative companies. We are moving to a point where there will be a single source of truth on each building powering spatial decision-making across the value chain. Tomorrow’s stakeholders will not tolerate the industry as it is today. Companies will need to push their services online or be punished by the growing number of millennials entering the market.”
8. Brandon Green, Co-Founder and Principal Broker at Keller Williams Capital Properties
“- 2-3 biggest firms will win the race and the business will be shaped for the next generation as a choice between high end, high touch service models, and DYI models – both technology enabled.
-The number of Realtors will be half what we have now
– Venture-backed firms unable to make a profit, that don’t deploy game-changing consumer-facing tech, will have a tough reckoning and funding will stop.”
9. Ryan King, Agent at Nourmand & Associates
“I think the future of real estate is brokerages partnering with escrow companies. People are finding homes and viewing homes more than ever without help from realtors. They’re even becoming smarter about comps and what amounts to offer. The value of real estate agents (which can’t be done by a computer) is the problem solving in escrow and the relationships they have with other realtors. How to handle mold remediation, how to convince a seller to extend contingency periods or how to convince a seller to give a credit just to name a few.”
10. James McGrath, co-founder of Yoreevo
“The big, broad change I see in real estate over the next 5-10 years is dramatically higher efficiency. Buying or selling a home is still pretty much the same as it was decades earlier and that's because it's still run by individual agents who have small operations and therefore don't have the potential return to justify significant investments to increase efficiency and profitability. As companies start to run the process, rather than agents, we're going to and already starting to see that change.”
11. Adena Hefets, co-founder and CEO of Divvy Homes
“The real estate landscape has drastically changed over the last decade, resulting in a new and exciting ecosystem that benefits both buyers and sellers. The result of all this innovation already has, and will continue to, dramatically improve the customer experience – as more real estate companies will apply the immense data they have collected from being in the market to their platforms. This data application will help us better understand the market, helping home buyers negotiate, obtain a mortgage, deal with title issues and escrow, and efficiently remove many of headaches that previously plagued the home buying experience.”
12. Bruce Ailion, Associate Broker at RE/MAX Town & Country and Founder of LocationLocationLocation.com
“Real estate runs in 8 to 10-year cycles. This will continue. We had hundreds of thousands of new agents enter the business since the Great Recession and many new concepts funded by Wall Street and Silicon Valley. The near term downturn will clear the field. The outcome will be new models and a return to business models and agents having to be profitable to survive. There will be a place for iBuyers, discounters, DYI buyers, but it will be relatively small. Movement of the Millennial demographic cohort and the Baby Boomer demographic cohort will have predictable impacts on housing markets.”
13. Daniel Steinfeld, CEO at On the Block Realty
“Without question, the increasing availability and accessibility of information has made transparency the single most important driver fuelling the tech developments in real estate.”
14. Zach Lombardi, Principal of the Aranson Lombardi Team at Compass
“There is a strong movement inclusive of Millennials to Baby Boomers who are actively viewing real estate as a smart investment; interest has steadily increased from these demographics over recent years. Home ownership is on the rise in many cities and the on-going trend is families and single people alike, purchasing smaller homes closer to cities and public transportation that are more affordable and easier to maintain. With continued historically low interest rates and healthy price corrections, at a micro-level, we see home values continuing to appreciate.”
15. Than Merrill, Real Estate Investor and CEO of FortuneBuilders
“New Tech: The future of the real estate industry will be largely impacted by current developments in technology. In particular, the emergence and growing popularity of cryptocurrency and blockchain will greatly impact transaction times. Typically, real estate deals have a closing period no shorter than one month. However, with increased access to blockchain networks, buyers and sellers will be able to negotiate and sign contracts faster and with greater ease than ever before.”
16. Itay Banayan, VP or Real Estate at Mindspace
“Urbanization is changing the entire world and the real estate industry more than perhaps any other industry as the large migration to urban areas requires rapid development of housing solutions as well as commercial solutions. The real estate industry is also changing as a result of e-commerce and consequently the real estate for commerce as space is now being used for different reasons.”
17. Daniela Andreevska, Marketing Director at Real Estate Data Analytics Firm Mashvisor
“The future of the real estate industry lies within big data, predictive analytics, AI, and machine learning. With the advance of high tech, tech real estate companies will make more and more use of these to automate all process related to the industry such as searching for properties for sale, analyzing real estate deals, and even buying and selling a property.”
18. Mark Armstrong, CEO of RateMyAgent
“I think as a result of new technologies and business models we will start to see the market split into two distinctive groups divided by price points. The lower end will be dominated by new technologies and business models such as iBuyer, self sell, and low-cost agents. Technology such as virtual tours that assists in low touch from agents and a high level of automation will become more prevalent.
At the higher end of the market demand for good real estate agents will intensify. Sellers of expensive property demand a higher level of service. Transparency around agent experience and customer satisfaction will drive agent selection. It is unlikely that technology will ever reduce the need for a good negotiator at the top end of the market.”
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