Published on August 23rd, 2016 | by Guest0
How advanced technology is altering the way people buy and sell properties
Things are rapidly changing in the real estate industry. Technology is taking the lead, and realtors must adapt in order to stay afloat. The first step in tech development was taken when online listing services for residential properties emerged. Industry leaders have relocated in the online environment, and some even sell via the web. Video presentations of a house, panoramic and 3D views, available amenities, and price fluctuations are features that home buyers didn’t have access to 10 years ago. This is a clear sign that advanced technology is completely altering the way people buy and sell homes and properties.
Real estate – an asset class worth “trillions”
Today’s real estate is a global asset class worth trillion. In the US, the industry is worth $40 trillion based on a Federal Reserve report issued in December 2014. Residential housing in particular, is a tangible asset – the largest in the United States – with a net worth of $23 billion. Surprisingly enough, the market is even bigger than other top-tier industries such as the health care system, fixed income or equity.
Now back to the technology, it’s worth mentioning that venture funding of startups centered at real estate technology has gone beyond the mark of $300 million in 2014. Venture fund spent over $605 millions on advanced real estate tech in 2014 as opposite to $241 in 2013. The growth is outstanding, which makes us wonder – is advanced technology reshaping the real estate industry? Truth be told, it has done that already.
Commercial vs. residential
The very first tech innovators that turned their attention on real estate focused on the residential marketplace. Companies such as RedFin, Zillow, Trulia, StreeEasy and Realtor.com were the first to prove that advanced technology is incredibly powerful; and the future of real estate has move into the online environment. These huge enterprises offer mainly residential listing services, which has piqued the interest of buyers and investors around the country. Commercial real estate on the other hand, features malls, hotels, multifamily housing, office buildings, retail stores, warehouses, industry properties, garages and medical center. Sadly, tech innovation in this niche is still limited. There are only two major companies that have embraced technology in commercial real estate – LoopNet and CoStar.
We’re currently witnessing an economic recovery with lots of cash heading back into commercial property development. The market is getting back on its feet, and it will soon enough be ready for new entrants eager to use advanced technology to gain new customers and boost revenue. In commercial real estate, the products and services are extremely exciting, as opposed to what residential real estate can offer because commercial property deals with higher transaction, thus centering on high-stake players.
Areas of opportunity
The benefits of using technology in the real estate industry are numerous. Industry businesses should ditch old-fashioned marketing techniques because they’ll eventually hit rock bottom. We can’t put a stop to technology, and whether we like or not, increasingly more start-ups will embrace innovation. In property management for example, many companies are already fighting for a spot in the top. Most of them offer smart software that can help a property owners oversee and track real estate assets.
Today’s real estate professional is on the go. However, he wants to be constantly updated with changes in the market. So what does he do? He uses apps. Real estate mobile apps are extremely convenient, easy to use and constantly updated with new information. Brokers, developers, appraisers and landlords all use them to check out the latest available properties. Opportunities for innovation in property lending have expanded tremendously. An increasing number of companies targeting this area are shaping up. Both commercial and residential lending are winning more ground, and as technology advances the market will be faced with one challenge after another.
Real estate is vast industry nowadays, and this is just the beginning. New opportunities for tech-enabled innovations are materializing with every day that goes by. Considering the risks the US dollar is currently facing, it shouldn’t surprise anyone that tech-savvy companies with an extreme fondness to the online environment are becoming wildly popular. In the past 5 years we’ve seen lots of changing in real estate. Who knows what awaits us 10 or 20 years from now?
By William Taylor and PropertyTurkey.com!