When we talk about the tectonic shifts in the housing market, the major reference points have been disruptive events: pandemic, the housing crash, and crises past. But the more gradual process of technological evolution has been far more important in terms of the overall effect on the market, and — crucially — how the market responds to those disruptive events.
To understand what’s happening today, and what we should be ready for in the coming years, it’s worth looking back at how technological progress has changed the real estate industry.
- Until just twenty years ago, we were still using a largely analog, famously archaic process conducted in-person, executed via hand-signed paperwork, and controlled almost entirely by regional gatekeepers, a.k.a. brokerages, banks, and agents. In terms of characteristics, it was slow, restricted, and local.
- Since then, the industry has rapidly digitized. The big bang was the migration of the MLS database to websites, first for agents-only, then to the general public. Transactions were still mostly conducted as they always had been, but everyone had access to listings, photos, and selling prices for homes across the country. This market was only slightly faster, but much more open and data-rich.
- Which brings us to today, when people now not only have access to incredibly detailed listing and market information but to digital tools and services that radically accelerate real estate transactions in every possible way. That makes this market incredibly fast-moving, liquid, and responsive.
Much of this is common knowledge to most people in the real estate world. But it’s critical to understand technology as the driving force in the market, over and above any individual event. Consider the buying frenzy that started in 2020. On the demand side, it was caused by the pandemic. But it was enabled by technology; without the ability to confidently buy or sell houses remotely, in exponentially shorter timeframes, the buying frenzy simply would not have been possible. And, of course, one day the pandemic, like other anomalous (fingers crossed) events, will be fully in the rearview. The technology will not only stay with us but continue to progress.