The 21st century introduces many changes that have a significant influence on the interest of the real estate industry. In most cases, the immediate impact is on the downside to cause the devaluation of real estate to affect not only the consumers but especially the investors. Prevailing trends, epidemic fears, and increasing competition from the non-traditional market are among the challenges that are disrupting the industry today. Despite it all, technology is introducing change to impact the business and find opportunities amidst the challenges.
Mortgage Rate and Impact to National Economy
Due to the current issues and conflicts, the mortgage rate dropped to its lowest record of 3.13% on March 2, 2020. The interest rate recovers back to 3.65% a week later. Though the flat mortgage rate attracted 6% more of the homes purchase loans, 16% of realtors are seeing a significant drop in the buyer’s interest to buy a property.
In any country like the US, the mortgage rate is an indicator of economic status. The higher the interest rates indicate that the economy is doing better, while the opposite can state its struggling condition. There are many factors influencing mortgage interest rates. And the increasing rate trends promote consumer confidence to drive the economy in a positive direction.
Technology and the Real Estate Industry Today
Technology is revolutionizing the real estate industry in many ways. From streamlining the business processes to integrating digital platforms, embracing the trend is essential to tap the growing millennial consumer. Tech-savvy homebuyers prefer online purchases, and home sellers make use of virtual reality to leverage marketing. Also, CRM systems streamline workflows in estate management, while the Internet of Things (IoT) transforms the real estate landscape significantly.
There are opportunities to explore the technologies and integrating them into real estate. While the benefits can serve as a cure to the challenges facing the industry today, there are downsides that worth the attention too.
More Challenges Paralyzing the Housing Market
The housing market is volatile to experience many downturns recently. Despite the low-interest rate, only a fraction will have a successful purchase of property due to many reasons, such as loan disqualification. The situation may result in a surplus of foreclosed properties to cause the devaluation of properties. Another challenge facing real estate today is the outbreak of a deadly virus that affects the selling and buying process of real estate. With the epidemic continues to stir fear among the people, 1 in 4 home sellers are pulling out their property from the market.
Opportunities in the Real Estate Industry Today
The real estate industry has many untapped opportunities that are both interesting and profitable, with little to no investment capital needed for a startup. Despite the challenges surrounding the business, the house is a basic need, and people will continue to seek for property to buy or rent. And the industry is multifaceted to allow other niches ranging from architecture and construction to personalized services. The infiltration of technology in enhancing the business workflows also provides a haven to endless opportunities.