Do you know what your home or apartment will be worth in five years? How about ten?
These are things we can't predict with any certainty, but there are telltale signs that give us some clue about where real estate is headed in the short and long term. These industry insiders spend their time and careers, in part, by monitoring the trends that will determine what the future of real estate looks like.
Here's what they have to say:
1. Adena Hefets, co-founder and CEO of Divvy Homes
“Deserving families are locked out of homeownership not because they can’t afford it, but because the system wasn’t designed for the new financial realities and lifestyles we see today. I believe the only way to break out of this cycle is to get people to rethink housing entirely. Gradual
homeownership programs are a unique and accessible real estate trend that present a new home buying process – one that allows people to own a portion of a home now, rather than waiting years to save up for a down payment.
This type of program allows people to purchase a percentage of the home of their choosing and buy more ownership over time, providing flexibility to a generation of financially complex Americans.”
2. Chris Smith, Co-Founder of Curaytor
“The two trends that have caught the industry's attention are iBuyer (Opendoor and Zillow Homes) and new brokerage models (eXp and Compass) that are more pro-agent and consumer less pro broker.”
3. Grant Cardone, Real Estate Investor and CEO of Cardone Capital
“Apartments are going to continue to rob the headlines as homeowners become renters. This will not stop as America will become a renter nation. Also, investors are looking for real assets to provide cash flow in addition to long term appreciation.”
4. James McGrath, co-founder of Yoreevo
“One way or another, the standard 5-6% commission is coming down. I can tell you from our experience in NYC, it doesn't take a lot of convincing to get buyer and sellers to realize their agents are not worth $30,000. That's actually what agents get paid here – the average home in NYC is about $1,000,000 and 3% per side is the most common commission.
While we and other companies have found ways to operate at lower commission rates, iBuyers are effectively eliminating commissions.”
5. Dominique Burgauer, CEO of Archilogic
“Two macro trends are having a huge impact on real estate right now. Most notably, the proportion of millennials in the market (36% of buyers in the US). Their digital-native expectations are driving companies to innovate faster and compete on a digital landscape rather than a physical one.
Another shift in real estate has been the application of AI. Intelligent algorithms are now taking over the long, mundane or repetitive tasks. For example, the best furniture arrangement for a room type can be determined by algorithms running hundreds of scenarios and determining the best fit within seconds. A huge time saver in commercial real estate and potential for an upselling application in residential sales.”
6. Ryan King, Agent at Nourmand & Associates
“A trend shaping real estate in 2019 are small homes. Small homes do well in all economies. Especially in hard times. For commercial real estate, I see more and more storefronts closing because of online shopping. I think this will cause more buildings to turn in multi-family units.”
7. Zach Lombardi, Principal of the Aranson Lombardi Team at Compass
“The latter half of 2018 was a scary and uncertain time for investors across all asset classes. The global economy was volatile which caused investors and home buyers to become nervous. 2019 has been completely different; home prices corrected slightly and we are now seeing gradual appreciation combined with lower rates. People are starting to become very educated and hyper focused in the real estate market looking towards cities and sub-markets that are supported by many industries (i.e – universities, hospitals, financial institutions, technology companies) to mitigate risk long-term on their investment.”
8. Brandon Green, Co-Founder and Principal Broker at Keller Williams Capital Properties
“The surprise market rebound. I think most expected it to really cool this year. Turns out, we get another year on the upswing.”
9. Adam Hooper, co-founder and CEO of RealCrowd
“We're on the front wave of consolidations and M&A activity, both by strategic acquirers and those seeking to create cross-platform functionality. We see lots of activity in the streamlining of information and transaction processes, democratization of capital markets by way of crowdfunding platforms, and the changing nature of how real estate companies view the role of technology in their organizations.”
10. Itay Banayan, VP or Real Estate at Mindspace
“Transportation to the business area from the surrounding residential areas will become easier and faster as commute is measured in time and not distance. Autonomous cars, ride and scooter sharing will change cities centers and distances. The last mile will become much longer as people will feel comfortable with longer distances, and the need for parking will be gone. Parking structures will need to be converted into a different new usage (potentially logistics, or office). Coworking has also changed the business model for office buildings as more companies realize that they don’t have to sign a long term lease anymore, especially in such a dynamic and unpredictable business environment.”
11. Than Merrill, Real Estate Investor and CEO of FortuneBuilders
“Sustainability: One of the most notable real estate trends of the year is a shift towards sustainable building habits. While homebuyers and sellers alike have incorporated green building materials and energy efficient appliances for several years now, there has been increased demand in 2019.
Even with changes to energy tax credits, the appeal for environmentally friendly homes is here to stay.”
12. Jeff Revoy, co-founder and Chief Commercial Officer at SpaceIQ
“Space/Utilization Tech and Real Estate: Space utilization and occupancy technologies will have the biggest impact on how commercial real estate is managed.
Companies are embracing flexible workspaces and with them more flexible leases. In 2016, 43% of American workers spent part of their week working remotely. It’s why businesses are embracing hot desks, hotel desks, and flex schedules to make the most of existing space.
Space utilization and occupancy tech allow companies to better understand how workplaces are used now while forecasting future space needs in relation to lease cost per square foot. Better planning means greater budget and cost control.
Example: one company used space utilization technology from SpaceIQ to shorten desk lengths by one foot. This simple alteration allowed leadership to defer leasing new space for five years.”
13. Glenn Orgin, founder of Richr
“We have hit an inflection point in the real estate industry where real estate brokers can no longer justify their fees with the amount of time and effort spent on each transaction. As a result, real estate brokers may just charge 1% commission fees resulting in a possible one-broker representation trend.”
14. Paul Burke, co-founder and CEO of RentHoop
“Co-living is clearly creating massive waves in real estate. We're seeing big bets made on it in nearly every big city due to a shift in consumer preferences; furnished, shared spaces, flexible leasing terms and inclusive utilities make it easier and more streamlined of a process than a traditional rental.”
15. Adrian Fisher, founder and CEO of PropertySimple
“The biggest trends have to be the implementation of AI, IoT, and big data. The smart home is now a reality, and it's only becoming more advanced in its capabilities. But these emerging technologies are also impacting the real estate agent's selling methods.”
16. Trevor Mauch, CEO of Carrot
“The biggest trend shaping real estate is companies like Zillow entering the home buying and selling market. Big companies are beginning to buy up property, causing people to think real estate agents are going away. This is similar to the stock market.
People said stockbrokers are dead when e-trade and Charles Schwab came out. They're not. They just had to specialize and become an expert. In fact, most stocks purchased are not purchased through those self serve or cut-rate brokers, they're purchased through advisors, mutual funds, pensions, etc. The same thing that drives people to purchase stocks through a person will drive them to do so with real estate: expertise.”
17. Daniel Steinfeld, CEO at On the Block Realty
“Consumers want data, and they want to be able to use it in order to make decisions. Simply seeing what is available is not enough, with the breadth of information that drives business decisions in every other sector, an individual's largest lifetime purchase can be no exception.”
18. Fred McGill, co-founder and CEO at SimpleShowing Real Estate
“The biggest trend we've seen in the last year has been the emergence of iBuyers like Opendoor and Offerpad. These companies are providing consumers with more rapid access to liquidity in their homes and providing a layer of convenience when selling a home that was previously unseen.”
19. Daniela Andreevska, Marketing Director at Real Estate Data Analytics Firm Mashvisor
“Real estate has been shaped for a number of years now by the entry of millennials into the market. This trend continues in 2019 and is expected to continue into the future. Millennials are technology-savvy, which means that they will demand the use of more and more high tech in all real estate process, whether they are related to buying or selling a home or investing in properties.”
20. Mark Armstrong, CEO of RateMyAgent
“We are starting to see a diversification of real estate marketing for both agent and property promotion. Facebook and Google will play a huge role in shaping real estate marketing and agents find more points of integration to cost effectively promote themselves and their listings.”
21. Gynell Vestal, Certified Residential Appraiser at Vestal Appraisal Solutions
“I’ve started studying tech companies that have recently entered the home buying space and find that some of them are engaging in deceptive and predatory practices which mislead consumers. They use in-house algorithms for valuations and low ball offers when purchasing from consumers, then hide the purchase and sales prices. The lack of transparency and manipulation of the system with hidden fees are a real threat to consumer trust.
I’m not sure when, but I would imagine at some point there will need to be more stringent regulation on these iBuying real estate platforms.”
22. Bruce Ailion, Associate Broker at RE/MAX Town & Country and Founder of LocationLocationLocation.com
“The 2019 housing market is seeing increased inventory and steady lower interest rates. This means 2019 is shaping up to be a great market for agents and a better market for buyers. Most predict absent a catastrophe, the long positive market will continue through 2021.”
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