In 2019 a lot of things are changing and the real estate industry is not an exception. The industry is undergoing a transformational change that presents both an opportunity and challenge for businesses small and large across the USA, Canada, and everywhere in the world.
In this article, we will explore the key forces driving change in the estate industry and consider some of the best strategies for home real estate businesses, investors, and everyone involved can reimagine their businesses to thrive in this competitive and ever-changing industry.
#1. The Rise of Technology
Technology is everywhere we look and its impact on our society has been pretty thorough. Despite the increase of technology across every facet of our everyday life, the real estate industry has been a slow starter when it comes to technology adoption.
But, this has slowly been changing and since 2018, around 53% of commercial real estate businesses reporting directly investing in technology. Although some of the investment is coming via venture capital, it has been confirmed that active investment is also coming from traditional real estate companies showing a shift in thinking as more and more businesses realize the impact of technology in the industry.
Employees, tenants, and consumers will all cry out for seamless, more connected and meaningful engagements with real estate agencies as demographic changes, What does it mean? What does the future hold for today’s technology?
We expect to see many businesses transforming to a point where technology is part of their everyday working. Given the vast amounts of transactions and operating data, solutions that can offer data-fueled insights to managers and property owners, agents, and brokers will be high in demand. Companies today look to realize operational savings, gain a better view of their business, and offer better experiences to employees, buyers, and tenants alike.
There has been a fear that technology will actually replace human beings but we think that it will empower real estate agencies to be more productive and enable them to provide a more meaningful experience for the buyer.
#2. Changing Customer Demographics
According to real estate industry analysis 2019, 45% of mortgages will be accounted for by millennials.
Globally, we are seeing a demographic shift with the rise of millennials. This generation is already having a huge impact on the way we think about things from the environment, to shopping online. Not only does their perspective differentiates from other generations but they are driving changes on a large scale.
In 2017, Inc.Magazine stated that 66% of millennials plan to purchase a home in the next 5 years suggesting that millennials have more purchasing power than ever.
For real estate agencies, this can mean one thing – a different approach is required when selling a new home to millennials. Real estate agents need to be able to use social media as a touchpoint for buyers across the purchasing journey. Considering the number of research millennials undertake online having great photos and videos of the community, amenities, and similar can make a difference.
#3. New Business Models
Lyft, Uber, and Netflix are all examples of businesses that have disrupted their respective industries. One of the factors in their global success has been the concept of cutting out the middleman or disintermediation. Lyft and Uber connect passengers with drivers and own no vehicles.
In the global real estate industry, this new business model is disrupting established business models and helping businesses create bigger operational efficiencies. More than 70% of executives said that the sharing economy is having a huge impact on their business, for example, Airbnb. More than 60% of commercial real estate businesses said their companies are using online lending places.
Cloud computing has changed the ability to make sense of large data and make better decisions on actionable insights. Also, there is the ability to use the power of AI to predict behaviors and allow customers to make assumptions ahead of time.
#4. Macro-Economic Trends
Macro-economic trends will continue to affect the real estate market on different fronts. Considering changes caused by the actions of central banks, Brexit, trade tensions, etc. are the forces to impact the industry together with significant legislation changes. What does it mean for real estate businesses? What can real estate investors, employees, and everyone involved in the industry expect? The takeaways for real estate agencies are:
- Make sure the processes and solutions are well planned and will enable the businesses to level up according to the market.
- Make sure there is an opportunity to optimize operations and simplify processes to drive cost savings when the market is tough or unstable.
- Make sure there are in-built transparency and compliance across the value chain.
#5. Changing Employee Demographics
We often hear about the influence of changing demographics from a customer perspective buy a larger and more profound one is actually happening in the workplace
We can see that an increasing number of millennials, as well as, Gen Z’ers are entering the workplace and that is not all – they are taking up better positions (marketing positions) across every sector on the market. With the oldest millennials aged just 35 or less, many have years left at work.
According to one research, G’Zers are going to become the largest demographic during 2019 and 2020 meaning there are going to be a lot of changes in the way people work, where they work, and expectations they have regarding their office space, technology, and more. More than 40% of Americans spend their time working from home with flexible schedules.
The real estate industry is changing as well. The real estate agencies are going head-to-head with other sectors when recruiting new talent. They create new work environment to cater to the needs of a younger workforce and supporting technology that is powerful and easy to use as the apps on a smartphone.
A career in real estate is one that comes with significant rewards but there can also be challenges that you will need to solve. It
A career as a real estate agent is a perfect job for you if you enjoy meeting new people, helping others find a beautiful home,
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