Think about how things are conducted in real estate today compared to five or ten years ago. There’s no question that things have changed, and it makes you wonder what the evolution of real estate will look like over the next decade.
DocuSign is another considerable convenience. Real Estate agents and their clients can sign contracts in their pyjamas, from the beach, or on the road. A decade ago, presenting offers only occurred in person. Electronic signatures weren’t permitted in the province of Ontario; Realtors had to be there in person and with multiple copies printed. Realtors would sometimes have to wait hours to present their offer; if there were any changes, their clients would need to be close by. It was a huge time waster compared to now when you can do it all in 30-seconds. Today, agents can even efficiently work on multiple offers simultaneously.
Technology That’s Changed the Process of Buying and Selling
Today’s technology makes it possible for people to feel comfortable enough to buy a house sight unseen, something that couldn’t have happened in the past. The mediums realtors can provide, such as Matterport, iGuide, 3-D video walk-throughs, photos, etc., makes it possible to see the house virtually without ever stepping inside. In the case of new construction, until recently, most builders still required you to go to the sales centre to buy. COVID has played a role in changing this mindset and getting the industry to catch up with the times. Chances are that five or ten years from now, we’ll see more and more people buying property without seeing them in person beforehand.
Buying Sight Unseen
Is it possible that in time there’ll be a buy now button on real estate listings? It would mean people would have to be ready for it and agree to specific stipulations permitting a home inspection to ensure some protection. In B.C., there’s been talk about implementing a cooling-off period, much like they do for new condo sales. In most cases, if you have a motivated buyer who wants to close on the property, it will happen. However, people do get cold feet. They’re still liable with conditional offers and deposits upon acceptance, but how often are they held to it? In a down market, it’s more likely that the seller will take action, depending on what the other offers are.
When eBay started in the mid-’90s, it advanced the early free-for-all transactions of the early internet to incorporate documentation and verification. Suddenly, buyers and sellers were being reviewed, and there was accountability. They’ve been selling houses and real estate on eBay for years, especially in the U.S. in places like Florida, where people are buying timeshares. If you look at how other products and services have transformed to make life convenient for consumers to buy and sell online, the real estate market hasn’t caught up yet, at least in the Canadian market.
Cooling-off periods or conditions would need to be in place to protect the consumer and to make them comfortable with the online purchase. But the opportunity to include a condition, such as a home inspection or mortgage approval, doesn’t generally exist when you’re in a sellers’ market. Is it possible to have pre-inspections without bias toward the seller? Making home inspections a legal right or mandatory has been discussed too. Who knows if that could ever come to pass? In a hot market, it could have profound implications.
Listen to more about this topic on the full episode of K.T. Confidential | The Real Estate Podcast:
The Virtual World
The virtual reality world will also likely play a significant role in the future real estate market. Currently, you have a bunch of pictures stitched together, and you virtually move forward by clicking into another section of the home. At some point, it will become more like the Metaverse model, where you’re transported into it virtually and not limited to where or when you can walk to various locations on the property. It will be completely immersive. If you’re interested in this technology, The K.T. Team has an Oculus that offers immersive virtual walkthroughs, and all of the properties get the 3D experience!
How much of a role will cryptocurrencies play in the industry? There have already been transactions across Canada that were purchased or sold using cryptocurrency. A big part is the buying and selling experience and the ownership aspect. It could be tied to an NFT (non-fungible token) that easily transfers from one person to another, possibly even for land transfer taxes. As governments develop their digital currencies, it will be interesting to see how that affects the value of current cryptocurrencies and the role it will play in how real estate changes hands.
The Future of Real Estate and Gen Z
Unfortunately for Gen Zers, realistically, at some point, home ownership is no longer going to be a viable option in certain areas. We’ll start seeing more opportunities for people as far as a primary residence is concerned. Mily and Ariel had a great discussion about what the future holds for Zoomers, and you won’t believe how much Mily is spending on some of these daily purchases! Zoomers looking to save money should check this out!
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Perhaps fractional ownership will enable people to buy real estate at reduced prices while providing investors with an alternative method of sharing ownership in a piece of real estate. This means that other people contribute to the purchase of your home. Maybe they want to own property in another province but not be fully invested. We’re likely to see a lot of manipulation of financing revolving around fractional ownership. Considering their options, Gen Zers are likely to be more open to the idea than earlier generations. Tiny homes are also on the horizon. It’s something you already see in big cities. Municipalities are pushing for higher density, and it’s possible that shared ownership, where you have a small personal living area and shared communal living spaces, will become more commonplace.
Renting, at some point (if not already,) will be the only feasible option for many. When there’s limited space to build, instead of eight homes on one lot, you may have eight people living in dorm-style housing with a touch of lux, differentiating it from traditional student-type accommodation; think student living, but for independent adults. Imagine a beautiful oversized kitchen with all the amenities, built-in appliances, and hi-tech features you could want. Things the average person couldn’t afford on their own. Long term, what sort of living arrangements does the future hold? One thing we know for sure is that real estate has to change. Stay tuned.