The modern world provides many challenges for the commercial and private real estate industries. Changing demographics, uncertain economies, shifting values, unstable climate – all of these affect how people buy and sell property.
So here are 10 of the biggest challenges facing the real estate industry. They don't have to be hurdles to jump – instead, they can be opportunities that accelerate our progress and lead to improvements in how we buy and sell property.
Changing Global Economy: This one is always cited as a big influence on the real estate market, and it makes sense – homes and property are a huge expense, and people will buy more when they have more money. The real estate industry ends up being very sensitive to the economy.
Interest Rates: Completely intertwined with the economy - the lower the global interest rates are, the better rates people can get for mortgages.
Virtual Economy: More people are working from home than ever before, and this means that their property needs change. There's less need for office buildings, more need for domiciles that can accommodate outfitting with modern tech.
Digital Realtors: People can work from home, and they can also shop for a home from home, too. Realtors need to come to terms with this new situation, and learn to take advantage of these new marketing opportunities.
Random Tech Innovations: Entrepreneurs and innovators of all kinds can come out of nowhere, to disrupt industries that nobody expected. That kind of thing happens here at HeroX – right now, you can participate in the $100,000 Land Survey Automation Challenge, a contest to improve the property boundary survey with an autonomous system (maybe drones!).
Sharing Economy: If you use Uber or Lyft to get everywhere, you don't need a parking lot for your car. If everyone does that, we don't need as many parking lots. A similar phenomenon can happen with Airbnb and similar services, that allow people to crash at a friendly home instead of a hotel. And both the commercial and private real estate industries need to react to this.
Focus on Sustainability: Going green is getting more important, and commercial real estate investors are paying more attention to factors like energy efficiency and sustainability. Local regulations are beginning to force property owners to disclose relevant factors related to green building standards.
Disappearing Middle Class: As the wealth gap between the rich and poor continues to increase, it leaves millennials with less cash for a place of their own, or an office building for their new business (especially with lots of student debt to deal with). Multi-family homes in densely populated areas are increasing, while demand for middle-class neighborhood-style homes is decreasing.
Health Care: Changing regulations on health care (the ACA, and now who knows what) demand changes in real estate strategy, as health care providers try to work together offering convenient services. An aging baby boomer population also requires more facilities to be built to accommodate them.
Water: Most people in the U.S don't need to think about water scarcity, but for many around the world it's a harsh reality – availability of water affects the value of land, and the viability of future investment. This problem is expected to grow, and is already affecting parts of the U.S. like California.
These are some of the challenges (and opportunities) that face anyone working in commercial or private real estate. There are a whole lot more, but some of these are bound to be an issue in many real estate transactions today.
Do you have a great idea to help revolutionize this industry, which sometimes seems to crawl along at a snail's pace? Then check out the Land Survey Automation Challenge, your chance to win big while making real estate more efficient, and less of a pain in the neck!