Twenty years ago, the real estate business was primarily a very local ordeal. Real estate agents and home buyers had to work at a very local level in order to buy and sell a home. There was no Realtor.com, RealtyShares.com, or any other online resource for people to preview and compare homes from the other side of the country.
Digital platforms are completely changing all of this, and it has really picked up in the last decade.
Increased Exposure
One of the main reasons this industry continues to boom is because of the extremely high visibility and exposure. Twenty years ago, unless there was a home catalog or Parade of Homes, the exposure to a home was limited to people passing by or consulting a real estate agent.
Today, websites like Roofstock or Realtor give potential buyers not only access to homes in their area but all over the world. A quick search for homes in Juneau, Alaska shows over a hundred homes on the market. These websites also allow for specific demographics to be filtered, such as proximity to a school, the age of the home, and the safety of the neighborhood.
Flexibility
Perhaps the most obvious advantage of everything being digital is flexibility. Scheduling a meeting that works for two separate parties can be very difficult, especially if both are having to deal with work schedules. The flexibility of digital means that both sides can work when itβs convenient for them.
Another way that flexibility is now common is in investment properties. Companies like New Western have developed online platforms for unique local off-market opportunities for investors, vs the traditional auction, sheriff sale, or foreclosure listings. This has made it so that these investments can be discovered from anywhere, instead of having to go to local auctions at a specific time.
Zillowβs Experiment
You may know Zillow.com to be a home-selling site similar to Realtor. However, in 2018, they made a decision based on algorithms and data-based research that will either change the market completely or put them out of business.
In 2018, the CEO of Zillow, Richard Barton, decided to move away from the traditional online catalog, and go into the home flipping business. The idea was that by using algorithms and research, inexpensive homes could be purchased by the company, renovated, and resold.
Early results are not looking great, with 7,000 homes now having to be offloaded, meaning a $300 million dollar hole to climb out of. Despite this, big investors and agencies are fascinated by the concept of using algorithms to target renovation projects.
While Zillow may not have done it correctly, the concept and potential seem to be there to completely change the market forever.
Downsides of Digital Platforms
The downside to this growing industry is limited, however real, especially for homeowners and real estate agents trying to sell. Before, for someone to tour a home, it was a very serious ordeal.
Today, it isnβt uncommon for real estate agents or homeowners to give dozens of tours before selling a home. In large part, this is because potential buyers know exactly how many other homes are on the market.
At the same time, however, real estate agents and home sellers will both agree that itβs better to have too many showings and interest than not enough. While digital options have made things much less dependable as far as the show-to-sell ratio goes, the exposure has opened up the potential to have out-of-state or international buyers.
The Future
Nobody is quite sure what the future holds, but it is safe to say the market is still in the beginning stages. As the real estate market continues to go more virtual every day, further market research and technologies will be created to make the entire process more efficient, dependable, and safe.
