Florida Realtors economist: Knock it out of the park through 2025. What can you do now to prepare for the buyers and sellers entering the market? Utilize digital tools, understand smart home features and attract remote workers to your market.
ORLANDO, Fla. – Experts predict technological advancements, the continuance of remote work, and a shift in commercial real estate will be the “new normal” in 2025, according to a recent canvassing completed by the Pew Research Center and Elon’s Imagining the Internet Center. Using their database, Pew/Elon selected specialists from a range of fields and sectors, such as government bodies, technology businesses, academics and business entrepreneurs. Each glimpse they provide may have implications for how your business can change and grow in the future.
Realtors® can prepare now for curveballs heading their way. As we approach the plate, keep in mind the contributions tallied occurred in the summer of 2020 – prior to vaccine approval and distribution, as well as the 2020 election.
The power of technology
The Pew/Elon commenters predict automation, artificial intelligence and robotics will increase over the next five years. They foresee both improvements to existing machines and the birth of new technologies.
Whether it is video doorbells or robot vacuums, technology is commonplace in homes. It isn’t a far leap to expect that homebuyers will continue to demand smart features.
Consider, only 15% of Realtors surveyed by the National Association of Realtors® (NAR) in 2016 indicated that their clients were interested in smart home technology. Now, according to NAR’s 2020 National Profile of Home Buyers and Sellers, 10% of new home buyers listed “smart home features” as a reason why they purchased their home.
Further, a study conducted in December 2020 by realtor.com and YouGov revealed a majority of consumers (over 80%) would be willing to pay extra for a home with additional technology devices or systems. Solar panels and security systems topped the list of features that would motivate consumers to spend more.
Prepare competitive offers for your buyers and/or accurately price your home listings with these features by understanding the worth of smart home tech. Just know technology will continue evolving, so stay abreast of new trends.
Similarly, digital tools will be commonplace for Realtors – whether that’s virtual showings, online documentation, or even connections with clients through social media and teleconferencing.
Technology usage will play an active role in real estate transactions and probably expand heading into 2025. Remember what’s in your Florida Realtors toolkit – MLS Advantage, Form Simplicity and SunStats.
Telework/remote work stays
Social distancing was a catalyst for more, and quicker, technology adoption in the workplace. The Pew/Elon experts agree that a significant portion of those working remotely now will continue to do so, at least on a part-time basis, in the years ahead.
According to one of the specialists canvassed, Glenn Edens, a professor at Thunderbird School of Global Management, Arizona State University, “Many of the firms I’ve talked to are seriously thinking about incorporating working from home as a long-term part of their human resources and commercial real estate strategy.”
If this comes to fruition, some remote workers may consider changing their residence; others might purchase a second home to adjust their office view. Or even workers searching for a home near their office could have a longer laundry list of requirements. While a 3-bedroom, 2-bathroom home may have suited them in the past, buyers may now need an additional room to function as a workspace.
Another interesting note made by several contributors: the emergence of home cooking. As restaurants became taboo, people have learned to cook (and enjoy it). The kitchen, already one of the most important rooms in a house, may hold even more weight for buyers who persist with this trend.
Commercial real estate shake-up
The contributors had a lot to say about the changing commercial landscape. Here’s some of their thoughts about the different types:
- Office – Some contributors believe the demand for office space, particularly Class A, will decline in the coming years. Jamais Cascio, a research fellow at the Institute for the Future, believes remote work will continue but also concedes “the longer the forced isolation lasts, the greater the likelihood that people will be desperate to return to human contact at work.”
- Hotels – They suggest employers will have less corporate travel impacting hotels and hospitality, a change that will also impact event venues and the airline industry
- Retail – Restaurants, shopping malls and other retailers were hit hard by health guidelines that prevented customers from entering their doors. Some have closed. E-commerce accelerated its share against traditional brick-and-mortar, and Edens boldly suggests it will account for 50% or more of retail sales by 2025 and continue growing. For reference, estimates from Digital Commerce 360 suggest it reached a market share of 21.3% of total retail spend in 2020 compared to 15.8% in 2019.
- Industrial – The convenience of e-commerce likely will continue eating into the traditional brick-and-mortar share even if it doesn’t amount to 50% by 2025. With quick delivery as the standard, industrial storage demand will grow. Industrial needs may push outward as people leave dense urban cores for more suburban and rural locations.
- Land – The demand for land will increase. The forecasters focused on agricultural advancements, but the scarcity of land is impacting new home construction today.
- Multifamily – Multifamily construction has slowed but the availability of residential real estate may tip the scale if buyers have no other options.
Babe Ruth said, “Baseball changes through the years,” and so will the real estate market. Although these technology innovators and developers, business and policy leaders, researchers, and activists have some consensus, none of them have a crystal ball.
Still, you can use their insight to strategize ways to make yourself an all-star now, through 2025, and beyond.
Erica Plemmons is an economist and Director of Housing Statistics
© 2020 Florida Realtors®
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