The biggest change to the industry has been the internet and technology however the general structure and practices of real estate much remain the same. Despite this within the next decade real estate could change.
The majority of sales require somewhere around 3- 6% of the selling price to go to the real estate agents. Previously this percentage was well earned with agents driving and taking pictures of properties, analysing and comparing prices to value a property. In recent years many of these processes have been automated via online applications making the life of a real estate agent a lot easier, so why is commission still the same. Due to these changes disruption in commission has already begun for example Redfin sells homes on a platform for just 1.5% commission, with other platforms selling direct to buyers cutting out fees altogether. As this decade unfolds it is hard to picture people continuing to pay high rates of commission as more and more alternative options are now becoming available.
Real Estate Agents
On the note of property platforms, the future of real estate agents is questioned. Its not so unimaginable that in the next decade automated online companies such as Zillow, Opendoor, Offerpad, and Redfin plus any new platforms could take over a large portion of the real estate market. Although Agents will always be needed for legal guidance and paperwork it is likely the number of them may reduce as direct platforms become increasingly popular.
The bigger the better? Not always. It is true that over the past century people prefer bigger homes with the average house size increasing. However, the trend could soon take a turn in the next decade due to resource conservation and home affordability. Smaller houses use less energy and need fewer items to fill the property. Another main factor is the price of a property, in the U.S the average home price has risen by 44% over the past decade. These 2 factors of the environment and money may drive people to choose smaller homes in the next decade.
Since the integration of the internet, technology is advancing and although we don’t have specifics it is a fair assumption that over the next decade more and more technology will be developed to automate the real estate sector. Processes such as getting approved for mortgages will become increasingly quicker. Technology such as blockchain is also being integrated into the sector of real estate creating transparency and efficiency. In fact, future real estate trends could be floating cities.
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