The Future of Living
“The strength of a nation derives from the integrity of the home.” — Confucius
The future of living and home buying has been particularly relevant to us as we navigate the journey to figure out where we actually want to live. Our early 20s were filled with staying in 10 bedroom frat houses and with the rise of covid, becoming digital nomads with no home base. As GenZ navigates into adulthood, starting families and settling down, what role will technology play in shaping the way we live and how we purchase our homes? Will the rise of virtual reality allow us to “try before we buy” when it comes to homes? Will co-living & walkable neighborhoods become the norm as we seek more affordable and sustainable options? Only time will tell, but the future of living and home buying is an exciting and dynamic space to be in.
45% of GenZers want to buy a house within the next 5 years.
Easier said than done.
The rising cost of housing, with most houses now costing 8 times the yearly income (a far cry from the historical 5 times annual income average), combined with high levels of student debt and low wage growth, has ma
de it difficult for many individuals to save up enough money to make down payments on homes. This has led to a situation where many are forced to rent, rather than own, losing precious equity in the process.
Starting from when millennials faced the issues of affording homes, there have been countless startups trying to solve the problem of affordable ownership.
The two main models have been shared equity vs rent-to-own.
Companies such as Unison, Noah, and Point offer unique forms of home financing known as “shared equity.” With this model, they provide the funds for a down payment on a home, and in exchange, they receive a share of the equity in the property. This allows individuals to purchase homes without having to save up for large down payments, making the process more accessible and affordable.
We also see companies like Divvy Homes employ their rent-to-own models where Divvy helps homebuyers pay for mortgages while buyers pay a monthly fee to rent from Divvy with each payment going towards future ownership.
However, with rising mortgage rates of late, we’ve seen these unicorns struggle and downsize with Divvy laying off 12% of their company in the last 2 months.
As we move into the next decade, much of the generation will be looking to buy their first homes and amid rising costs, many of these shared equity or rent-to-own startups will thrive.
Figuring out all of the processes to get homes inspected and appraised is much harder & time consuming than one would think.
With real estate being a buyers market, we’ve seen inspection figures rise over the last 5 years. For first time homebuyers, finding great inspection agents and home appraisers is usually done through word of mouth or Google search — not particularly advanced.
To address this issue, some startups now offer services connecting homebuyers with qualified inspection agents and appraisers. For example, companies like Inspectify make it easy for homebuyers to find qualified professionals who can provide the services they need. By simplifying the process and providing access to a network of qualified professionals, these startups are helping to make the process of buying a home more efficient and convenient. When more digital natives become homebuyers over the next decade, we will likely see an increase in demand for tech-enabled marketplaces and all-in-one bundlings of housing-related services.
I bought my house in Austin after Facetiming my real estate agent. It’s been 4 years and I’ve still never stepped foot into the property. In 10 years, we’ll replace these Facetime calls with VR. With the use of VR technology, homebuyers can now “try before they buy”.
Real estate companies are able to create virtual models of properties that allow potential homebuyers to tour the homes without leaving the comfort of their own homes. This reduces the amount of time it takes to find a potential home and offers homebuyers the ability to see what a property looks like without having to physically visit it. These models can also be used to showcase potential renovations and design ideas as well, helping buyers to make the best decision on their future home.
So that’s the future of homebuying. But what’s the future of living?
Over 50% of Americans want to walk in their neighborhoods more but only 8% of all neighborhoods in the US have a Walkscore of at least 80. Not only do more people want walkable neighborhoods, people are now becoming digital nomads & living in shared communities.
Startups such as Culdesac have created sustainable and livable communities that prioritize pedestrians and reduce reliance on cars. Emerging community houses/centers such as Verci, Treehouse, and Elysian House act as social hubs and beacons for the digital nomad, allowing visitors to find communities with shared interests, housing, and more everywhere they go.
There’s still much to be done in this space. Emerging community houses still have not figured out a way to grow at scale and I doubt they ever will. Instead, we’ll see community houses started and sponsored by local startups and community builders unique to each city, with a surge of tech-enabled marketplaces for home-sharing, short term furnished stays, and popularity of community hubs that offer both locals and digital nomads a sense of community.
The future of living is about to undergo a major transformation. Gone are the days of living like our parents — the rise of virtual reality, walkable neighborhoods, and technology will change the way we live and make buying a home easier than ever before. And for the growing population of digital nomads, the rise of co-living, community hubs, and home-sharing marketplaces will make this lifestyle more attractive and accessible than ever. Get ready for a future of living that’s unlike anything you’ve seen before!