Smart homebuyers, real estate agents, and investors are always looking ahead to what’s next. So what trends and factors have the potential to notably change the real estate industry over the next couple of years?
Interior design fashions are always changing, and the housing market itself is constantly influx. Most also expect some very sizable leaps in real estate over the coming decades, as technology really changes what is possible. However, what about changes in the works right now that could tangibly alter how real estate business is done over the next 24 months or so?
1. The For Sale By Owner Revival: As the U.S. housing market heats up, more and more homeowners will be tempted to sell by owner instead of using traditional Realtor services. It will be easier to sell as mortgages become easier to get, and many won’t feel they need to pay broker fees. The internet and apps will also make hybrid and discount real estate brokerage models more attractive and efficient too. Look at the new SQFT app, and the potential of Zillow becoming a massive brokerage. This won’t appeal to all homebuyers and sellers, however, and you can bet that there will be many nightmare scenarios along the trail. Yet, it is smart to anticipate this trend and prepare accordingly.
2. Millennial Madness: Real estate agents, investors, and builders shouldn’t neglect boomers and Generation X who will continue to be some of the most active buyers this season. The mass of millennials set to move into the market over the next few years and their tastes can’t be ignored. From a big picture perspective, this isn’t really any different to the entry of any other generation to homeownership. Just recognize the quirks and differences in what they are trending towards buying.
3. Facebook: Many have already forgotten about Facebook, and have taken down their profiles. However, it may not be time to completely dismiss the social network. In August 2015, Facebook Mark Zuckerberg announced that 1 billion people logged in to their accounts in a single day. That number represents one out of every 7 people on the planet. Other projects Mark is engaged in aim at spreading the connection to all of those that haven’t had the internet yet, and creating a completely connected world. We all know Facebook isn’t as cool as it used to be. We have also realized that we can’t beat real estate businesses on Facebook because that content is no longer owned by real estate advertisers. The costs of Facebook marketing are only likely to grow, while effectiveness may tumble. Regardless, the platform cannot be completely dismissed thanks to its immense reach and the community it has developed. Many people would still be absolutely lost without it.
4. FinTech: Over $12 billion was invested in financial technology (FinTech) startups in 2014 alone, according to Forbes. That suggests big changes are coming. We’ve already seen Wealthfront growing in popularity for stock investing, new real estate crowdfunding portals popping up, and more social finance websites connecting capital to consumers. This is likely to make financing homebuying, building new projects, and investing easier and more affordable. On the back side, it makes it more profitable to invest capital in real estate, and it is likely that yesterday’s big banks are going to lose out.
5. Twitter Replaces Email: One developer who has created a variety of real estate related startups recently took to Twitter to tell the world he is turning his email inbox off, suggesting everyone Tweet instead. Whether it is Twitter or another micro-messaging app that takes off, there is a good chance that email will go through its own cycle rotation in the near future. It is still one of the best power tools for real estate marketing, and will remain great for some niches, but make sure you are connecting with people where they are at.
6. New TRID Rules: New mortgage and real estate closing rules go into effect in October 2015. While they may be “well intentioned,” they are sure to cause some chaos, and make things even more expensive and frustrating for many homebuyers and sellers. Among these changes are new limitations on lenders before official applications are made, new three day periods between preparing closing documents and funding, and more. This could disrupt some individual’s business models.
7. The Sharing Economy: We’ve now got Uber and Airbnb. Yet, these are just the front-runners in the sharing economy. Expect even more sharing and app driven services in the real estate arena. A good example of this will be more home sharing and fractional ownership. Don’t overlook the fallout of this that can stem from less need for car ownership, to higher rental prices, and even less location dependency.