Recent developments in technology have had a big effect on the real estate industry with regards to production, but production isn't the only aspect of the industry being affected by technology. These developments are beginning to change another part of the industry: the role of the homebuyer. The Internet has greatly changed the amount of information available to the world, something that can be clearly seen through the effect it has had on real estate. The Internet, along with a drastic change in homebuyer demographic, is starting to change the industry entirely. The homebuyer is not what it used to be, and continues to get younger and more knowledgeable with time. The picture to the left features a young couple getting their information primarily from the Internet, rather than using traditional means like brokerage firms. This is the new homebuyer; a young couple, or even single man or woman, who mostly researches the housing market through the Internet. This new search method allows potential homebuyers to get more information from a better variety of sources. The increase in information available through the Internet might not have a direct effect on the housing market, but it has done a great deal in creating a better-educated and more informed homebuyer.
The homeowner has been changing drastically over the past few years. According to Stefan Swanepoel, a contributing writer at realblogging.com, “in 2005, 40% of homebuyers were first time buyers and 50% of them were between the ages of 25 and 34 (Gen X and Echo Boomers). Even more telling - 38% of all homebuyers in that period were under the age of 35…According to numerous studies undertaken by NAR and the California Association of Realtors, approximately 70% of all homebuyers start their search on the Internet.” This means that the traditional ways of buying and researching homes has become a thing of the past. The new homebuyers are beginning to take full advantage of the resource that is their computer. A new medium has taken control of the industry, and there are a number of ways with which it is doing so.
One of the many recent developments keeping consumer's informed has been, interestingly enough, the blog. According to reTrends.com, one of the top 10 trendsetters in real estate in 2006 is Blogging Systems, “for leading the way in expanding blogging into the real estate industry.” The blog allows a means for homebuyers and homeowners throughout the country to communicate with one another about whatever they desire. One site, Outside.in, currently collects blogs from over 3,000 neighborhoods in 55 cities. Blogs on this site can range from types of restaurants in any given area to the quality of schools. Sites like this bring with them a huge amount of information, and have begun to severely limit the role of the real estate professional. However, blogs are not the only resource being used by the new generation of homebuyers.
Broker review sites are another trend that is turning the real estate industry upside down. Homethinking.com offers reviews of brokers in any area in the United States. A feature like this, according to Les Christie, a staff writer for cnnmoney.com, allows consumers to “engage the most professional real estate agents available." It also forces brokers to pay more attention to how they treat the people using their services. It might not be the most ideal situation for brokers, but it will ensure that their customers receive the best service.
The most dominating theme in the changing industry is the amount of information becoming available to the common man. As long as there is Internet available, there are no boundaries to what any homebuyer can learn about the housing market. Having a more educated and informed consumer not only means that they are able to make a better decision regarding the purchasing of a new home, but it also means that the role of the real estate professional is becoming increasingly less important. Before the introduction of the Internet, brokers were relied upon for most of the information regarding their housing markets. If they are going to remain a major role player in real estate, brokers will have to adapt quickly to the changing industry.
There are a number of ways professionals can use the Internet to reach the new generation of homebuyer. Although the Internet might limit the consumer’s reliability on real estate professionals, the Internet does offer a new medium through which the industry can advertise. The Internet is a relatively cheap way to reach a large number of people, and is becoming large part of most companies advertising campaigns. Also, companies could begin to offer certain online services via their website, which could once again increase their role with consumers. There is a lot of potential for brokerage firms with the Internet, and they must utilize that potential in order to keep up with the evolving industry.
If the people currently working in real estate would like to keep up with the industry they will have to adapt to the changing environment; if they fail to do so, the entire industry will pass them by. With that said, real estate professionals can take advantage of certain aspects of the new direction the industry is going by offering a number different services that only the Internet allows. There is an opportunity for professionals to make themselves more available to homebuyers and owners. This generation has a lot of information available to them, and they have begun to utilize it. The homebuyer is no longer the traditional family in the United States, and the real estate industry is becoming anything but traditional.