How Technology is Changing How The Real Estate Industry Works
There is a study by Oxford University that found that most of who you’d call successful real estate brokers will be jobless in the near future. This comes as industries continue to push for the use of artificial intelligence to replace jobs such as those offered by telemarketers, brokerage clerks, and of course, real estate agents. Here are 6 reasons why the real estate market as you know it will cease to exist in the coming years:
The consumer has changed
Most people today want to rent or borrow goods, including property, and if we go by this study from Norbert Winkeljohann, this sort of thing will affect how the traditional real estate market works. We already have an aging population that is changing the way we thing about real estate, and a younger population pushing for services such as AirBnB, which allows them more freedom to move, and to experience more than they would be able to while living in the same place. Consumers are unpredictable, and everything that drives this industry is changing, including values, attitudes, interest, and lifestyle.
Urbanization is happening fast
There’s a growing need for affordable housing, and now more than ever, huge populations are living in big cities. This affects social infrastructure and changes expectations for traditional real estate trends. Urbanization is affecting housing prices, the quality of transport, infrastructure, utilities, communication, etc. Things like high speed internet may be more important to renters than other things old home owners would think about.
Skills and the uncertain future of real estate
A survey was published recently by the PeW Research Center, and it showed by robots will take over some of the mundane jobs of answering phones, doing telemarketing, and finding homes for renters. Probably not every profession mentioned in the report will be affected severely; but still, one has to wonder about real estate in general, and whether it will change drastically enough to reflect the times we live in. The reasons mentioned include:
- Robots will be favored for simple tasks due to higher efficiency
- Technology platforms will affect employment markets and traditional job structures, and jobs in the future will be more flexible, and networked
- Real estate agents will have to create their own markets by targeting audiences
- The workforce is changing, and the real estate agent of the future might be a nerdy teen
Changing energy use and habits
The real estate industry accounts for over 40% of global energy use, with homes contributing as much as 20% of greenhouse gas emissions. With the rise in global temperatures and rapid weather changes, people are likely to rethink the entire home-ownership arrangement, and they’re likely to favor smaller, more customized abodes, preferably with eco-friendly material and with a smaller patch of land. All these factors are bound to change how real estate works.
Technology has reduced the value of location
Business innovation is no longer driven by old definitions of space and brick-and-mortar. High value renters and home owners of the future will most likely operate in the already well-connected world of cyberspace, which will change buyer attitudes and increase connectivity. Things like work flexibility, prices, and smart homes will be valued more than the traditional sense of location in real estate.
High-value office real estate are not being used in the same way as ten years ago. Close to half are empty during work hours, because people don’t work the same as before. This is likely to translate into new trends for the entire real estate industry.
Virtual space is just as valuable
Since we’ve established that people don’t buy homes the same way they did years ago, we can only expect this trend to continue as the virtual space becomes more integrated into our every-day-life. It is true that living in a nice neighborhood will still be valued for a while, but due to the growing interdependence between people and virtual spaces, technologies such as building information modeling will employ more of virtual technology. Forge the old house tour, virtual reality offers a more personalized experience.
These developments will happen over time, but they are inevitable as the world becomes more connected. Technologies that are new at this time will go on to take over our way of life, and this will be reflected in how we purchase property, where we live, and the reasons we pick a place to live. Clients in the future may want to stick with a 100% commission real estate brokerage, as these will provide more value to them.