Blockchain technology. Generational shifts. Artificial intelligence. 2018 promises to be another dynamic year for the real estate industry.
The Real Estate Industry continued to rebound in 2017—living up to the “cautious optimism” that we noted in our Trend Report last year. What does 2018 have in store? We researched the predictions of industry experts and narrowed it down to seven trends—two of which may be familiar, since they made our 2017 Trend Report too.
- Blockchain Technology Momentum Continues
We predicted last year that blockchain technology for the real estate industry would gain steam in 2017. This year, blockchain will make even greater strides, shifting from experimental to practical application. In a Forbes Community Voices post, Matthew Murphy, Global Vice President at the real estate and fintech advisory Renren, identifies three areas in which the real estate industry will benefit from implementing blockchain technology: MLS property data, title records, and transactions.
Murphy cites the challenges of working with decentralized data for both MLS listings and title records. Blockchain technology makes it easier to securely access and share data. For MLS property data, says Murphy, the result will be “real-time access to property information straight from the source.”[i] He also sees it providing more opportunities for collaboration across the real estate industry. In the case of title records, Murphy notes that Cook County, Illinois is already testing out blockchain technology for transferring and tracking property titles. We noted the transactional advantages in last year’s report. The efficiency and security of blockchain transactions will accelerate the closing process.
- Millennials (and Boomers) Drive Change
Millennials may have passed Baby Boomers by in numbers, but experts see both generations wielding a strong influence on the real estate industry in 2018. Increasingly, both Millennials and Baby Boomers are attracted to communities that combine the advantages of urban AND suburban living—walkable neighborhoods with convenient access to work, shopping, entertainment and, in the case of Boomers, healthcare providers and nursing care.
According to Realtor.com, “Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017, based on mortgage originations.”[i] But despite all the hoopla about Millennials, Baby Boomers—or as Realtor.com calls them, “the cresting ‘silver tsunami’—have proven past prognosticators wrong. “Initial predictions that the baby boomers would already be retiring en masse at fancy retirement communities and active lifestyle developments have given way to a more complicated reality, shaped in large part by fallout from the Great Recession,” says Realtor.com. This means that there will be demand for both high-end, urban living and affordable, age-in-place housing. Realtors helping Baby Boomers downsize from large homes will certainly face the next trend in our list.
Download “Trend Watch 2018: What’s Sticking Around & What’s New: A LexisNexis Real Estate Industry Report” to read about five more trends, including Artificial Intelligence and Tax Reform.
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