From travel to entertainment to news, almost every industry has been disrupted by technology, save for one notable exception: The real estate sector. Technology has certainly changed the real estate industry, but for the better. Instead of causing industry professionals to fear for their jobs or eliminating the need for age-old processes, technology has streamlined existing processes and lead to improved efficiency. This is evident in the existence of sites such as Zillow/Trulia, Homes.com, and Realtor.com, all of which help individuals search for residential and commercial real estate better and faster but that did not significantly alter how individuals buy or lease or from whom or how.
The shift in consumers’ priorities has largely influenced the direction of real estate technology. Today’s real estate professionals are taking old systems and reimagining them to address the growing need for flexibility, affordability, and community.
1) Flexibility Is Essential in Today’s Modern World
While most members of older generations can count on one hand how many employers they’ve had, young people make a career of job-hopping. The growing gig economy has made short tenures the norm. As a result, young people not only change jobs frequently, but they also change houses, towns, and even states as seamlessly as they would trade out one leased vehicle for another.
To make moving from job to job and place to place easier, many members of the millennial, Gen Y, and iGen generations prefer to rent furniture instead of buying. Companies like Fernish, Feather and CasaOne rent high-end furniture to individuals who desire flexibility in their living arrangements.
For those consumers who prefer to buy but still don’t have the job stability of yesteryear, platforms like Knock, a Trulia creation, makes it easy for them to shop and buy new homes before selling their old one. On the other end of the spectrum, OpenDoor, another platform, pioneered “instant offers,” which leverages algorithms to calculate the value of a home. Via OpenDoor, homeowners can sell their homes quickly without compromising on price.
Residents aren’t the only ones who seek flexibility in real estate. Many modern companies that utilize freelance workers allow employees to work from home and/or value a healthy work/life balance desire flexibility in their workspaces. The same is true of companies that experience periods of rapid growth, followed by ones of uncertainty. To accommodate these businesses, platforms such as WeWork, Knotel and Breather rent out office spaces on an as-needed basis.
2) Affordability Is Becoming More of a Concern
According to a 2016 Pew Research Study, over 70% of individuals between the ages of 25 and 35 moved into a rental property that year, compared to 22% who bought a home. A more recent Rent.com survey revealed that eight out of 10 of those millennials had no plans for trading out their rental homes for homeownership any time soon. The reason? Buying is expensive.
Several innovative companies are striving to make housing more affordable, particularly in expensive markets, such as the Bay Area and New York City. For instance, Landed helps educators find and finance affordable housing in the communities in which they teach. Divvy’s concept is to help consumers, many of whom have low credit scores, find rent-to-own homes. Homeshare and Bungalow take luxury apartments and create them into several smaller, more affordable units.
3) Young People Desire Community
Although technology allows for 24/7 connectivity, or maybe because of it, more than half of Americans today feel lonely. The loneliest of the lot happens to be those in their late teens and mid- to early twenties. Millennials are the second loneliest generation. Why is technology to blame, though?
Technology not only makes it easy for individuals to stay connected constantly, but it also allows them to work at any time and from anywhere, and for employers to expect them to. To meet employers’ expectations, more young people are putting in overtime outside of the office, making it more difficult than ever for them to build communities organically. As a result, they’re relying on their employers and landlords to do that for them.
Companies like The Wing and The Assembly free events designed to foster connections between members. StarCity, Ollie, and HubHaus offer shared living arrangements that range in style, from dorms for adults to luxury micro apartments to full houses. These companies use technology to facilitate connections and help individuals find their perfect roommates.
For many industries, technology has spelled nothing but doom. For others, it’s presented its fair share of challenges. When it comes to technology & real estate, however, the two go hand-in-hand like peanut butter and jelly. As consumers’ needs continue to evolve, so too will relevant real estate technologies. However, if the current trends are any indicator, it seems as if it will only evolve for the better.