Tuesday, May 24, 2005
Real Estate: an Industry in Evolution
As a real estate Agent I have witnessed personally over the years a continuous change in the industry. Changes have stemmed out of improved technologies, different consumers and an overhaul of our entire lifestyle, especially here on the West Coast and particularly in the Lower Mainland. People's expectations are different today, both in terms of the services sought and products demanded. Expectations are so different today, that in fact they have impacted even the engineering and architectural aspects of real estate.
Not too long ago the Strategic Issues Subcommittee (SIS) of the American National Realtors Association was asked to identify the top trends influencing changes in the industry and give a futuristic outlook of what the real estate landscape will look like a few years to come, both in the United States as well as in Canada. Their findings are extremely interesting, both from a professional viewpoint as well as from a social sciences perspective. Ultimately real estate is a "people's business" and the following major factors speak volume about how we are all going to think and act. Here they are.
The concept of family is changing. Family has been the pivotal knot throughout all human civilizations throughout the centuries, but this pivotal knot will be entirely different. No more Dad, Mom and two kids. An ever greater number of people will be living alone or as a couple at most. The general trend throughout Western societies is not to have children and this trend will be more remarked in times to come. 'Home Sweet Home' will change too. Our children will be living mostly outside and will not require large homes or, for that matter, large apartments. The one-bedroom and den will be the standard fare a few years from today. On the other hand, tomorrow's consumer will be increasingly technically competent, will want to have access to all sort of information - products, financing, services - and will be 'decision-independent' , meaning they will be more than capable of making their own decision as to what real estate product to buy. The times of the streotyped old, pushy, hard-selling real estate agent trying to shove a house down consumers' throats are soon to be over (they already are, as a matter of fact).
The financial impact of buying real estate will continue to be the primary consideration. Consumers will increasingly look at their home purchase as just another facet of their overall financial picture, pretty much the way they look today at stock and bond investments. Price, in fact, will supersede emotion. No more purchases dictated by the impromptu feeling of the moment. Tomorrow's buyer will be cold and calculated, and will buy only if it makes financial sense to do so. He/she will hardly fall in love with the product they buy, even if for their own use. As such, the people of tomorrow will have no time for household chores: carpet cleaning, window cleaning, gutter cleaning will all be carried out by specialized companies or strata management companies as in the case of apartments.
Consumers, both buyers and sellers, will have their own access to data from a variety of sources, but mostly from the Internet. As they will be technically skilled and computer proficient, the Realtor will no longer be seen as the primary source of real estate information. Instead the Realtor will function as an interpreter of information, both relating to products as well as the workings of real estate, especially financing. Realtors, moreover, will be required to be very skilled at negotiating. In essence they will function pretty much like ambassadors. It will not be only a matter of writing and presenting offers: they will be required to explain the rationale behind the offers they write. They will also be required to explain why offers have not been accepted and to provide solutions.
This will probably be the largest single change in the industry. Banks will no longer be only lenders. They will become suppliers of real estate as well. With their large working capital, branch networks and back-end technology solutions they will at one time step into the industry and build, finance and sell their own real estate products with and through their own Realtors. They will do it on a catalogue basis, so to speak. Just as you can walk into a Sears today and order a vacuum cleaner on catalogue, you will be able to walk into a bank tomorrow and order a house on catalogue, perhaps a house not yet built. Pull out your own credit-card size computerized ID, and in the same branch you can view the schematics, order the interior decor, sign the offer, get the financing all set up, order the appraisal, request the lawyer, sign the warranties and I'll bet by the time you are finished about an hour later they will give a bottle of champagne before you walk out too ! I can imagine already how the conversation will go: " Just speak up, kiddo - tell us what you want. We provide a one-hundred percent service and guaranteed solution to all your real estate needs, from foundations to door keys. We open up an account and you are on your way ".
A world of change is awaiting on us all. Everything will be different: vehicles, clothing, informatica ... why not real estate. Doesn't all this make you feel old already ? You are not alone.
Real Estate Chronicle