Two Disruptors That Are Changing the Housing Market

You’re heard me talk again and again about the impact that two particular things that are having a big impact on the housing market, and today I ran across more evidence to their power.

I’m talking about Millennials and technology.

Millennials are definitely having an impact on the housing market. In some ways they are seen as the rescuers of the entry-level housing market, in other ways they are the primary target for the rental market.

And technology? You know how I love a good technology story, and here’s more proof that technology, specifically apps and websites outside of the “hallowed MLS” are absolutely changing the face of real estate.

I ran across an interesting interview the other day with Tom Barrack, who is the CEO and Chairman of Colony Capital. He’s also the Chairman of Miramax and happens to have more than $56B in investments worldwide, so he knows what he’s talking about when it comes to the housing market.

In his words, “Housing is lumbering along.” He outlines that the two most important factors influencing the housing market today are the Millennials and technology.

In regard to Millennials, he classifies them as the biggest drivers of the rental world because they don’t view housing as a sound investment vehicle – they are not taking the same equity growth view of housing as the older generations did and still do.

Renting is more realistic for them – they have other priorities where they’d rather be putting their money than in a house. “They look at life differently, their expectations are different. They don’t look at housing as an investment vehicle, an app is an investment vehicle [for them].” Barrack says, rightly, that while interest rates are still cheap, it’s still not easy to get a loan.

Housing will always be there but it’s getting cloudier as a chosen investment vehicle across the board.

Now as far as technology, who didn’t see this one coming?

I’ve been telling you about the strong influence that technology and different apps and websites have on the housing search, some even predicting them as the ultimate demise of real estate agents as we know and love them.

Sites like Zillow, Realtor.com, Trulia, auction.com, HomeAway and others entering the market all the time – they are the true disruptors.

More and more people are shying away from going the traditional 6% commission real estate broker route. The MLS no longer has housing data in a chokehold.

Barrack explains, “The last bastion of a brokerage exists in the single-family housing market, it doesn’t exist anywhere else, and those antiquated inefficiencies are coming out of everything; all aspects of the transaction are getting more transparent, more simple. Staying relevant is getting out of the real estate jungle and getting into these other aspects like technology.”

How will these two disruptors continue to wield their influence in the housing market?

Time will tell, but seriously, I don’t foresee any factors derailing either the mindset of Millennials in the world of housing or the impact of technology, access and transparency.

Read more at theinvestorinsights.com

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