According to a report done by Statista, the number of housing units in the U.S. has continuously increased over the past 40 years. In 1975, there were approximately 79 million that slowly grew to a current total of 138.5 million. In addition, the revenue accumulated in this market alone so far in 2019 is $165 billion.
So, if anyone was to gauge the prospective power and success of an enterprise based on previous growth patterns and revenues, not many markets would top real estate.
While all of the figures mentioned above paint a positive image of the real estate market, that image is a bit misleading. Contrary to the enormous earnings and an ever-growing number of construction projects, this industry is suffering from a dangerous lack of innovation.
How so?
Well, the vast majority of the projects done nowadays still rely on the same development processes and technology that was used 40 years ago. Also, nearly all data required to facilitate construction is still processed through the software that was invented and used since 1985 – Microsoft Excel. Obviously, there is nothing wrong with relying on Excel, but in the wake of tools like Big Data, artificial intelligence, and far-reaching automation, “SumIf” formulas alongside macro worksheets seem obsolete.
The Time to Innovate Is Now
Howard Wilner, Former president of Marlboro Auto Exchange who is currently working as the president of Automax Pre-Owned, has been a long-time proponent of real estate modernization. Equipped with a business degree and years of experience in senior management, he understands the proper ways to leverage technology to boost sales.
According to him, one of the most significant factors that lead to the successful integration of innovation is timing. For example, the social media platforms would have never been successful if they were created as soon as the dot com bubble was born in the early 2000s. Instead, they had perfect timing as they penetrated the market once people already had access to the technology needed to use them.
As far as real estate goes, the time to innovate is right now. Howard views the current conditions in the nation as more than satisfactory to slowly integrate new technology. The economy is improving, the frequency of inventions is at an all-time high, and accessibility to modern tools has never been better. The question that remains is how exactly do we innovate a market that has side-stepped most encounters with modernization over the past few decades?
Support Mobile Real Estate Investing
Regardless of the innovation strategy that is used, mobile investing is definitely going to be a major talking point of every blueprint. As of 2018, 81 percent of all Americans owned a smartphone. That is more than 265 million people who are relying on advanced mobile technology on a daily basis. So, promoting mobile investing for real estate would help the industry become more prominent in the spheres of young entrepreneurs and those seeking easy portfolio diversification.
Carefully Choose the Legislators
There is a very common misconception that makes it seem as though the real estate investors and construction companies are unwilling to employ innovation. In reality, however, this is about as far from the truth as can be. In fact, Howard Wilner points to the Forbes findings from 2017 that proved how venture investors spent 150 times more on real estate technology than they did in 2016. That means that there was 150 times more interest in improving the market from a modernization standpoint.
So, what prevents such massive spending from gaining momentum and completely revolutionizing real estate? The regulations and those who make them.
In most states, construction projects are preceded by a borderline torturous procedure of gathering endless licenses and permits. If new technology was created, these same regulations would momentarily cripple the movement until legislators fully understood and believed that all inventions are safe and purposeful. Hence why choosing the right lawmakers, which would be those who are innovation-inclined, will help speed things up.
Automate the Administrative Procedures
Howard Wilner also reminds that the real estate market is much more than construction approvals and development projects. It also includes a plethora of administrative work related to finance, management, human resources, and accounting. Not to mention the role of realtors who happily claim about six percent of properties’ selling prices.
Inventing ways in which all of these tasks can be automated is an area that the research and development projects should focus on. Just consider the improvement in efficiency and increase in monetary savings that would take place if error-proof robots, not humans, were tasked with all administrative roles.
Luckily, these types of changes are already taking place with software such as Built, Qualia, OpenHome Pro, Premier Agent, and Zillow.