4 Startling Real Estate Trends to Close Out the Year
Should realtors be worried? Or excited.
1. Company-sponsored Living Arrangements
Newsflash: San Francisco and Silicon Valley (i.e. the southern portion of the Bay Area) houses some of the most expensive land in the world. Buying an entry-level home in that area on a sub-$150k salary (without outside help) is, for all intents and purposes, impossible.
As an attempt to address the obscene housing costs and overburdened transportation infrastructure in arguably the most expensive area of the country:
“This summer, both Facebook and Google proposed multimillion-dollar projects to build self-contained towns near their headquarters — towns complete with grocery stores, shops, cafes, movie theaters, gyms, and hundreds of apartments.”
Will other high-tech / high-cost cities like Seattle, Boston, and Washington DC follow suit?
The Line Between Work and Play
What’s “work”, and what’s non-work? Now that I think about it — what is the right word for activities that aren’t exactly work? Is it play? Is it life? I’ll have to get back to you on that one.
This sort of living arrangement moves by companies seem to make those waters even murkier.
Read more about how everyone’s favorite tech giants are building out employee housing
2. Blockchain & Real Estate Industry Disruption
When people hear about cryptocurrencies, a few things commonly come to mind: unpredictability, the unknown, fear.
Despite this, Samantha Radocchia — a blockchain expert on the Forbes 30 Under 30 List — argues that since it has a “predictable cadence”, real estate is ripe for disruption via bitcoin.
She thinks Bitcoin (and other crypto-currencies) have the promise of handling security aspects, like fraud protection, better than current real estate processes. This is especially the case when it comes to developing nations.
But why bitcoin? Here are two ideas:
- It disrupts un-optimized customer flows with efficient, direct-to-consumer models — in the same way Dollar Shave Club and Harry’s disrupted Gillette’s market share
- It allows for fractional ownership, which we’ve already seen play out (quite successfully at this point) with DC-based Fundrise.
That’s all well and good, but how far are we from owners accepting payment in Bitcoin?
The answer is: it’s already happening, in London and Ukraine for example.
Read more about how cryptocurrency is infiltrating the real estate industry
3. Limited Housing Stock for “Starter Homes”
Here’s an oldie but a, er, depressing statistic for first time home buyers. There’s extremely limited amount of housing that costs less than $250,000 — and more people are bidding on those homes.
That means the less money you have to spend on a home, the harder it will be to acquire one. And if the last year is any indication of future performance — it’s only going to get worse.
Here’s a more thorough explanation of the graph:
“The under $100K range has shown declines in recent years due to the shortage of distressed homes available for sale (just 5% of sales this past month, compared to 35% in January 2012). Sales in the next two price ranges are no doubt being hindered by low inventory as buyers compete for the same home.”
4. Getting Started in the Real Estate Industry Remains the Same
The barrier to entry isn’t necessarily low, but it is straightforward.
From focusing on goals, to organizing your finances and searching for valuable deals others are missing out on — striking it out on your own requires thoughtful strategy and implementation.
