Although it might sound far away, the year 2025 is less than a decade from now. When you consider how much can happen in just a decade, it can boggle the mind. Consider that a decade ago, YouTube was launched, Trulia and Zillow had just been incorporated, and Facebook had only a few million accounts with only a few people seeing its true potential.
Predicting the future 10 years in advance is difficult enough, but in the real estate business it can be even more problematic considering all the changes that might occur. However, there are some basic truths to the real estate market that have been around for many decades and will continue to apply into the future. So, here are the main fields that I believe will be changed the most, and how I think they will look 10 years from now.
When you consider that amount of data available today, it will be many fold that by the year 2025. In 10 years, every piece of land and property will be fully listed and online. A standardized process will be in place so that everyone can access the same data. Plus, whenever a change occurs in the status of a property it will be documented and updated in real time. Much more data is going to be stored and available about buyers, sellers, agents, developers, lenders, and practically everyone. Demographic and socioeconomic data will be much more accurate, available at any time.
The development plans for cities and regions of the country will not only be available today but will be published 10 years in advance. You will also find statistics for every neighborhood published every quarter, as well. In fact, we might reach a point where they update almost instantly.
Rankings for professionals
Every player will have a track record and ranking from his or her clients. Websites such as Rank My Agent have already started ranking agents today, but this will extend to developers, management companies, constructors and anyone who is part of the game.
The access will be instant, and the information regularly updated.
If we assume that all the data is present and available on a basis that is far more immediate than today, there will be certain ramifications that will need attention.
Pricing of properties
Currently, Zestimate carries online estimates of properties. However, in 2025 there will be an accurate market valuation that will change on a daily basis about the value of the property itself. This means that factors such as supply and demand, new developments and other rates will have a tangible impact on the current value of properties. The same will be true of building valuations, as they will be available in real time also.
One of the most interesting aspects 10 years from now will be how new projects will get off the ground so much faster than ever before. Because the data will be available in almost real time combined with advanced analyzing tools, the costs and sales prices for any project will be known almost instantly. This instant information will mean that the risk factors that come with any project will be better ranked and understood. As the technology advances, the knowledge increases to the point where risk becomes a much more manageable factor.
The world of financing will be altered as well given the changes when it comes to the speed of information that will be present in 2025. There are three groups, in particular, that will change in new ways because of these advances.
The competition in this market will intensify as the peer-to-peer loans keep growing, and companies such as Lending Club will have a much larger piece of the action.
In fact, online mortgage markets will allow lenders to finish all the processes and procedures online so that they can get the best terms.
Lenda is an example of a company that is doing that right now, but it will spread based on its success. Also, foreign investors will get the same terms as local ones since their records will be more available, and cooperation between local and foreign lenders will improve dramatically.
This platform will only continue to grow, as Reality Mogul is demonstrating right now. They will become more legit and might even be available for nonaccredited investors. This method of financing will take up a larger proportion of the funding that is available.
Investment groups will become even more accessible to people in general. New platforms will allow investors to cooperate more easily and support the transaction process.
The ability to purchase homes will speed up and be easier to accomplish. Sites such as auction.com are the tip of the iceberg, as 10 years from now they will be far more common. Plus, the process will include obtaining the mortgage, hiring the constructor, as well as the management company and lawyer, all done online through a computer or mobile device.
This process will be easier as well with pricing becoming less of an issue thanks to all the details of the property being known. Sellers will be able to sell their properties by themselves far easier than before, and there will be no more traditional open house techniques because virtual tours will take over. Companies such as Matterport are already expanding their services in this regard.
Agents and brokers
Because more data, better analytics and interfaces available to everyone, the agents will have to bring their “A” game in order to attract more clients. More transactions will take place online without the need for agents. So, the agents will have to know the technology and have a better connection to the marketplace. It will be crucial for agents to drive qualified leads online and convert them to sales in a more efficient manner in order to stay in business.
The real estate game is going to be very different in 2025. There will be new tools for evaluating products, getting the funding, and planning and executing projects on a much faster basis.
However, the downside is that developers who use the technology will hang back, and margins will drop as new opportunities become available. The best developers with a proven track record will succeed more often in getting the funding they need.
It will certainly be a new world for real estate investing in 2025. Those who ride the wave of new technology will be the most prepared for the changes that will occur.
Omri Barzilay is the founder and CEO of Propcy Inc, which enable real estate investors at any level to invest like the pros. Propcy empower investors to make data driven decisions, by not just displaying data – but making sense of it. Omri started coding when he was 12th years old, and investing nine years later. In Propcy he combines his two biggest interests, real estate and technology. Omri writes about investing in New York City at blog.propcy.com.