Forecasting 2019 Real Estate disruptors
In a technologically expanding world with artificial intelligence, electric cars, Uber, Netflix, personal space flights, bitcoin, and more, the Real Estate industry just seems to keep grinding on resisting change at every turn.
But the Real Estate industry cannot hold out forever, so what are the major disruptors that will ruffle feathers this year?
Youth And Technology
The first is obvious but bears pointing out and that is youth. The world is getting more and more tech savvy while the average age of a Realtor is about 60 years old. However, there are more and more younger agents that are starting to act as internal disruptors to Realtors.
Just as the industry has been resistant to change so has its Realtors. The 60 plus Realtor crowd with very limited social media and internet knowledge is rapidly getting crowded out by the younger generation that can do much more productive marketing for less money. This is why many of these younger tech-savvy Realtors are joining lower cost discount real estate brokerages because they can do so much more with less and can sell your house cheap.
The second biggest disruptor is margin compression. For years on end the real estate industry has operated in a very hush-hush monopoly of price fixing. Sure no one really collaborates to charge 6% but everyone does seem to be stuck on that number.
Every other industry known to man is fighting to sell you a better product for less money but the real estate industry seems completely oblivious to this idea. However, technology is changing that.
Sellers are wising up to the fact that “old-school” marketing techniques are all but extinct and the internet and social media is driving sales. With that being the case Realtors have less influence over sales than they ever have and they are losing their influence on a daily basis.
Discount real estate brokerages are wise to this and they are seeking to offer you the services you actually need like social media and internet marketing and not forcing you to pay for services that you don’t need like open houses and magazine ads.
Youth and margin compression are going to be huge disruptors to the real estate industry in 2019 and going forward that the real estate industry will have to deal with. Younger agents are learning how to do more with less and they are applying the lower cost higher value principle that they see in every other industry to real estate and it is scaring the socks off the older real estate crowd.
Economy And Interest rates
For all but the wealthiest, the lack of wage growth is slowing the housing demand, while consumers are limiting their spending it’s putting a strain on growth in the economy.
Lumber prices are dropping fast, although, new construction has fallen by 12% in June, 2018. New data from NAR is showing home prices are continuing to rise and predicted to rise another 5% by 2019, while a lack of listing are slowing sales.
Interest rates are on the rise, changing the residential real estate market, and proving that buying a home is less affordable for the first time buyer. Sellers are demanding record home prices, yet first-time buyers are struggling to afford them or the new construction that is being built.
Natural Resources And Infrastructure
To improve critical infrastructures it is estimated that 4.5 trillion is needed by 2025, stated by the American Society of Civil Engineers. Repairing things like public transit, roads, bridges, airports, electricity, and water and sewer lines.
Energy and water are being threatened by environmental damage, and are vital to quality of life and real estate property.
Change is coming and it should be welcomed. It is about time the real estate community actually saw some real innovation.