The future of real estate

8.12.2022

Kirjoittanut: Marcos Homar Heinonen - tiimistä SYNTRE.

Esseen tyyppi: Yksilöessee / 2 esseepistettä.

Esseen arvioitu lukuaika on 4 minuuttia.

The future of real estate is here and there are new fascinating technologies that have been implemented into this fast-evolving industry. I have been interested in the real estate industry for some time and therefore I decided to learn about this industry some more. I know the basics of it but threw this essay I hope to learn new fascinating facts that I didn’t know before. Knowing about the real estate industry is good not only for people working in the field but for all of us that want to know how the industry fluctuates and therefore affects many other things while doing so. The real estate industry is experiencing rapid changes due to new technology and the fluctuation of capital. New technology involved in the real estate industry is going to affect investors as they will have to learn how the new technology implementation will work in the future of the real estate world. New competitors to already existing applications will generate competition which will result in lower prices. Competition is good news for consumers as it guarantees lower prices.

Virtual real estate

The future of real estate soon will allow touring a house without going to the actual location. Even if a property is in the building process or not even built at all its potential buyers could already see the property. This would allow the buyers to personalize their home beyond the actual possibilities as the customer’s wants could be seen on the virtual model. Renovation plans could be also seen in VR as the result could be seen before any major commitments have been made. Virtual reality (VR) is growing in popularity and in the real estate business, this has been seen. Steps towards implementing the possibilities of virtual reality have already been implemented on a small scale. Companies implementing VR technology could also be seen as more reliable and efficient. The reliability aspect comes from the fact that the customers have seen what the property will look like, and they have something to hold to. If they wouldn’t have a VR model to look at, they would have doubts about how their property will look when finished. Efficiency would also grow as the sketches of new constructions have been tested and seen on virtual reality renders beforehand. The emotional connection between the buyer and the property can be brought up as a more enhancing experience than for example with pictures. This would especially be great when buying a property in a foreign country as you don’t have to travel there to see the house. House-selling sites would have more traffic as people would be interested in seeing houses in virtual reality which is the closest and most real experience after the possibility of being physically there.

Are real estate agents needed?

According to a survey conducted by Redfin, approximately 17% of homebuyers in the last two years didn’t feel the need to get a real estate agent´s services according to this Fortune Builders article. It saves money for the cost of you having the responsibility to do all the paperwork and being responsible that everything is ok with the house being sold. For example, a house of 260 000 euros sold by a real estate agent with a 6% reward percentage for their service would mean around 16 000€ of the total house value. That is quite a lot considering all the other costs involved in selling a house. According to data from ForSaleByOwners about half of all homeowners in America would consider selling their house without a real estate agent. People and especially millennials are wanting to have more control of their buying and selling processes. The housing market has shifted online, and this has eased the possibility of house owners selling their houses by themselves without the help of an outsider. These are US stats so the situation in Europe is most likely slightly different but similar changes are happening here and if not, they are coming. Real estate agents have had to change their way of making business to stay competitive in the modern real estate market. The real estate agent’s job has faced a challenge, but this doesn’t mean that they are going to disappear completely as they have a place in the industry. The industry has changed, so real estate agents must change at the same time which makes it complicated but not impossible. Human interactions are very important and that is one strong point for real estate agents which is going to take them a long way.

How to predict the future of the real estate industry?

This is a hard task as nobody knows clearly where we are heading, but if some people know it is agents who have been in the business for more than a decade. They have experienced changes and may know based on that what may be coming. The future is indecisive but promising I have heard, and this is also the case in real estate. Whatever happens, it happens for a reason, and we should not fear losing jobs. When old jobs go away new ones come to replace them. If my future is to be a real estate agent maybe I don’t sell physical houses but the technology and knowledge to make virtual reality house models which are very realistic and easy to perceive. In the future customers will have a better understanding of the market situation as they have more information in their hands. The market will be driven by the fluctuation of crypto and other virtual currencies which affect the value of properties. In Europe, the invasion of Russia in Ukraine has had a significant impact on the real estate business. Such things as wars are difficult to predict and therefore the real estate business must be constantly aware of things such as wars or natural disasters. There is even a possibility that a conflict happening on the other side of the world in South America affects the real estate business of Spain. Globalization has unified us for both good and bad things.

Conclusion

The real estate business is changing as new software is being developed. New age groups will be entering the market as younger people will be more aware of the market situation. All in all, the real estate business is going through a radical change which will make the people in the industry change to stay relevant. Growing competition makes the prices go lower which will slow down inflation. Future real estate agents should have a look at the direction the real estate industry is going and go for it as the new way of selling properties is for sure a combination of exciting new technologies with the old-fashioned salesman approach that we are all familiar with. When looking for the future of real estate investors are going to have the most to look forward to.