Being one of the last markets to embrace digitalization, the real estate industry is actively making up for it by following the most popular real estate technology trends.
More startups are likely to receive funding if they’re using AI and ML, one of the hottest trends in PropTech.
This industry is already enjoying its best times thanks to financial investments, new models, and functions of real estate platforms that keep appearing.
By 2050, the urban population will increase by 75% to 9.3 billion.
This means that the real estate platforms will become the most popular and developed.
Our article sheds light on business and tech real estate trends, market state, and industry predictions.
State of Real Estate Market and Business Predictions
Investments in the Real Estate Industry
The real estate market will become far more prominent and global. Real Estate 2020 mentioned that institutional-grade expanded by more than 55%, from $29 trillion in 2012 to $45.3 trillion in 2020. It may then grow further to $69 trillion in 2030. The predictions show an exciting market future, and this fact can’t inspire.
In 2021 investors will lead to a much greater range of opportunities. Second, the building investment community will provide more property chances for people. It’s vital for those working with funds with shorter maturities and differing return profiles.
In 2021, the global real estate market grew from $ 2,687.35 billion in 2020 to $ 2,774.45 billion at a compound annual growth rate (CAGR) of 3.2%.
Of course, in 2020, due to the Covid time, the market growth and development decreased by more than 2-3 percent. However, starting from 2021, active recruitment begins as much as 8% per year
Asia-Pacific is a significant region in the global real estate market, which accounted for 40% of the market in 2020. Western Europe was the second largest region, accounting for 24%. The same trend continues in 2021.
Predictions for the Real Estate Industry
Value of the Real Estate Industry
According to the Business Research Company, the real estate industry will reach a value of nearly $7227.13 billion by 2022.
New Features for Real Estate Tech Startups
The startups that use AI and Big Data are likely to receive more funding. They will be the ones who automate different segments of the real estate industry. Virtual tours will be highly in demand in the digital world. They will be integrated on both leasing and buying platforms.
New Business Models
iBuyer, is an example of a non-traditional business model in the real estate industry. It uses modern technology to make property selling and buying easier. You can do it using an automated valuation model. Since iBuyer’s first appearance, many customers have decided who to turn to first: real property agents or iBuyer. We’re waiting that new platforms with an automated buying and leasing experience.
Competition on the Real Estate Market
The real estate market is going to become even more competitive. There will be low mortgage rates and not enough properties for sale. The bidding war for properties will grow and drive a 6% price growth in the first six months. Later on, the demand and supply will stabilize and cool down to 3%.
Influential Issues on the Real Estate Industry
Besides a possible lack of investments in the industry, there are some other issues that might influence the landscape of the market:
- Economic issues:
- job and income growth,
- available qualified labor,
- interest rates,
- cost of capital and its availability.
- Political issues: the political landscape and government budget issues.
- Development issues: construction costs.
Top 5 Real Estate Business Trends in 2021
Every year we hear many assumptions about the real estate industry; some are justified, and some turn out to be false beliefs.
Some people thought 2020 would be the real estate tech crash year due to Covid-19. But there was only a slight decline in the market. Today everything is gradually returning to normal. Now in 2021, we can see how this sector is once again alive.
What are the truest real estate trends we expect in 2021? Let’s find out in more detail.
Millennials Are the Leading Commercial Buying Group
Statistics: According to FinanceOnline, millennials remain the largest real estate buyers in 2021 worldwide. The same real estate trend has continued for many years. The time doesn’t change priorities for millennials and the situation will go on in the future.
Millennials have always been the leading group of home buyers since 2010. And this trend will continue to grow in 2022.
Despite the Covid time and other restrictions, modern realities show that every year the population involved in purchasing real estate grows by an average of 5%. Millennials are expected to account for about 55% of the real estate market in 2022.
Millennials Real Estate Preferences
Embracing new ways of research: Unlike other generations who used agents to sell, rent, or buy a property, Millennials are using the Internet to research before hurrying up to buy a house or a flat. They use our new digital space to realize their old dreams. For example, people want smart houses with lots of modern perks.
According to New Real Estate Trends & Forecasts we can show you such significant information:
- 44% of new homeowners find information online first about buildings for sale,
- 73% of buyers are using mobile or tablet search devices for their purchases in 2021.
Means of communication: Another real estate trend is the way of communication. As it turns out, most Millenials text to show interest in a certain property, to ask additional questions and to book the appointments. Phone calling is mostly reserved for urgent matters.
According to the above-mentioned NAR research, agents are embracing the demand for electronic communication: 90% of agents communicate via text, 94% of agents use emails, and only 36% of agents chat with clients via instant messaging.
Millennials’ goals: Millenials are eager to have a home of their own, which is why they don’t want to buy second-handed homes and deal with bad plumbing or old furniture. They want to have a turnkey house designed for them.
How to Keep Up with Millennials
If you are planning to build a real estate website or some other proptech product, there are 3 core ways to attract the biggest buying group of the market:
Distinguish Popular Features
Besides having the necessary features, your product needs to have features that are currently in demand. This way you’ll be able to keep customers longer on your platform. The whole impression of your company will be more positive, which will be needless to say with all the closed deals.
Here are the most appreciated features for a real estate website, according to the NAR 2019 report:
Improve Your Online Listings
Listings matter. It is the buyers’ first impression of their possible future home. That’s why it should be perfect.
To provide the best user experience, work on the mobile version of your website, upload only high-quality photos, and allow your buyers to see the building inside out by using virtual tours.
The previous year 2020 showed that houses were in great demand and not everyone could buy what they wanted. Therefore, in 2021, the process of hunting dream homes is expected. Property platforms with agents are already on the way to look for the perfect option for you.
Emphasize Benefits, Not the Size
Everyone who has ever bought or rented a property knows how some customers become obsessed with the property size.
Your website’s right decision is to focus all of the customers’ attention on the perks of a particular building and its location. Based on the NAR research, Millennials care more about the neighborhood they will be living in, not the size of their home.
New Business Models in the Real Estate Industry
In order to keep up with the new and forward-minded generation, modern real estate technology companies create more and more ways and models to satisfy their customers.
Amazon and the largest residential real estate brokerage company Realogy have teamed up to create the Turnkey solution for home buyers.
TurnKey is a buying program of Amazon and Realogy. In other words, by connecting a customer with a property agent, Turnkey enables a customer to have a voice in a matter of buying.
Moreover, after purchasing a house, Amazon helps turn it into a home by providing free technologies, like installing a TV and free intelligent products, all according to the sum a customer spent on the house.
Marketplaces are Becoming the ‘it’ of the Real Estate Industry
More and more marketplaces are invading the real estate market by introducing a new business model: a platform that is a middleman between buyers and sellers.
Marketplaces are disruptors for many incumbents: Airbnb threatens hotels, WeWork threatens office management companies.
However, real estate marketplaces create a new segment in the industry. Above all, many of these marketplaces fall into the sharing economy – the solutions they offer are shareable with others.
With Airbnb, you can rent a room in a house where others live with all descriptions. You don’t need any agents to make the deal. Using WeWork, you share a working space with others. Start with CasaOne, you can rent furniture for a certain period of time. And with Zeus, customers can rent furnished homes while they go on business trips.
Examples: Zeus, AirBnB, WeWork.
New Era of the Digital Real Estate Industry
According to the Real Estate Innovations Overview, digital real estate technology trends have spread all around the globe.
Beyond 2020, the generation that has grown up in the digital world will dominate consumer spending and work culture. Social networks will help to determine where and how people will want to live, work, and what space to choose for their dream smart house.
There are around 42 countries that are embracing Proptech real estate. The most innovative country in real estate digitizing space is Australia. In the second place is Belgium and France, then Australia. The last among the big runners are the USA, Canada, and Austria.
PropTech is Taking Over the Real Estate Market
PropTech (Property Technology) uses information technology to help people research, sell, buy, or manage the property. With proptech, real estate tech companies seek to add value to their business through technologies.
Alex Edds, director of innovation, at JLL UK says “On the face of it, proptech is the digitalization of real estate, but beneath the surface, there is so much more to it than that.
At its core, proptech addresses fundamental questions of how we experience and extract value from real estate.”
Emerging Trends in Real Estate Europe 2021 shows 78% imply that the use of technologies for real estate companies will trend upwards over the next three to five years.
The pandemic has made some adjustments and changed the priorities in the market. Previously lagging real estate assets, such as data and medical centers have become a priority. They’re gaining high demand in acquisitions and leases.
Local Market Focus as a New Business Trend
The main priorities for 2021 were the focus on the local market. Investors prefer places where they already have some experience and information.
Prioritizing stability has also helped Germany gain popularity. Now Berlin is topping the city rankings this year. The relative health of the German economy with the effective fight against the virus helped the country survive this period.
Respondents believed that the events of 2020 are likely to reduce the cost of metropolitan areas. The spread of infection will lead to increased costs and complications. Overcrowding in the big city can be a headwind in case of demand.
However, the beginning of 2021 showed that the liquidity of cities such as London and Paris remains consistently high. All fears about real estate tech startups’ crashes were false.
Smart Homes with IoT as a Popular Real Estate Technology Trend
The local real estate technology market with IoT is becoming the future of housing technology trends.
Agents can integrate these technologies into their marketing plans. They take advantage of business leaders responsible for the best building renovations and future maintenance.
These services combined with a robust IoT device system can contribute to high-quality property management. There is the best heating control, ventilation, air conditioning, lighting, fire, and building security. What’s more interesting – tracking pets while you are away from home. A smart house is a leading real estate technology trend now!
Changing Estate Priorities for the Best Commercial Strategy
The primary commercial trend in 2021 is a change in real estate priorities. The time is to change your property vision.
If earlier business owners focused on selling houses, apartments, and land plots, you should now pay attention to other purposes.
Your online real estate platforms must be as convenient as possible. It’s vital for those looking for premises for various medical, analytical, and industrial grounds.
How can you make your search as convenient as possible? With the help of technology trends like artificial intelligence algorithms, of course.
Artificial Intelligence Algorithms Assistance
This technology is the best weapon in the real estate industry. There are 2 ways to improve your business performance that will help you achieve success.
- Recommendations. Real estate solutions need to provide more customers with relevant offers to choose what they want.
- Property management. When defining mobile app technology trends in real estate, one should not forget about effective property management. There are many issues to be constantly monitored. These are property and lease listings, buyer’s and tenant’s requests, maintenance requests.
- Data analysis. Data asset analysis is more about machine learning. The algorithms help property business owners improve their data aspects. It provides better services and has transparency with up-to-date prices. This information makes the buying real estate technology process more helpful and accessible.
Top 9 Real Estate Technology Trends for 2021
Buying and Selling Websites
The first and foremost popular way of digitizing a real estate business would be taking it online.
Forbes showed that customers’ first source in home searching and information finding is online websites. People also use popular social media platforms like Facebook and Instagram.
Besides using web information services, the National Association of Realtors is trying mobile devices for a number of different activities, including communication with their clients.
Leading real estate websites can offer much more than a single agent. With the below-mentioned web services, customers can find the best residential and commercial properties for sale and rent, either domestic or overseas.
Examples: Zoopla, RightMove, Realtor
Real Estate Management Software
Real estate management software makes it easier for property owners to manage their real estate and customers online.
Users need to have a lot of features in such management software:
- namely and reporting,
- accounting and planning tenant screening,
- automatic monitoring of insurance policy,
- other vital functions.
Real estate management software saves money and time. It’s going by utilizing the cognitive functions of an efficient computer program for management. This process goes instead of a human or humans.
Examples: Appfolio, Rentec Direct, TennantCloud, Yardi.
Discover more on: How to Create a Proper Property Management System
High-quality photos and 360° videos are not going to be not enough for cutting-edge Millennials.
The Young generation is accustomed to the conveniences of the modern world. That’s why they won’t be using outdated features; they will use only up-to-date features in the future.
A 3D virtual tour is a great millennial-like feature for letting customers explore the property.
The technology real estate technology trend of using virtual reality is not a newsflash.
Zillow, an online real estate tech company, has been using this feature for years. 2021 is the year where VR and AR will enter a mass property market. It’s going to be the truth since this estate tech trend has become popular.
Virtual Tours like a Must-have Digital Reality
Interestingly, the first action that users do while searching for a home is virtual tours according to FinanceOnline. Although virtual tours are a cool digital feature necessary. They can’t replace the natural viewing of the space.
For customers to have the ability to view home tours, Zillow, for example, lets real estate agents capture the imagery of the property by using an iPhone or Ricoh’s 360-degree cameras like the Theta V and Theta Z1.
Customers, on the other hand, can see arrows that let them click or tap around to different rooms. It’s very similar to Google Maps View.
Examples: Zillow, Sothebysrealty.
AI, ML, and Property Value Estimation
Statistical models, machine learning, and big data are used to evaluate property value.
ML algorithms are a great way to predict how much your business will get in commission after every closed deal. Pattern recognition used in ML helps define when a property becomes popular. All in all, these algorithms lead to better real estate deals.
Zillow has created a product called “Zestimate” that, with the help of ML, estimates home prices based on publicly available data.
Real Estate CRM Software
CRM helps manage the real estate business. Namely, real estate CRM software helps to track emails and leads, manage contracts, and keep tabs on the progress made with possible leads.
The commercial real estate technology trend of using CRM for property websites isn’t new. Nevertheless, it’s expected to take a mighty step further in the real estate industry.
The predictions about how blockchain can change and revolutionize the industry are huge. 2021 is envisioned to finally adopt blockchain to bring security, clarity, and efficiency to real estate transactions. There are two ways in which blockchain would help the real estate industry:
It is the usage of cryptocurrency for dividing assets into tokens that will be stored on the blockchain. Tokenization in real estate changes a lot for different participants.
For example, it enables customers from different locations and using different income to be a part of the investment process. Moreover, property owners can sell just a chunk of their property.
- Smart contracting
These types of contracts are agreements that bring transactions between buyers and sellers together. Smart contracts speed up the process of verification, search for homes, and property acquiring.
Imbrex plans to launch smart contract-enabled transactions using its own cryptocurrency.
Real estate websites try to personalize the customers’ experience by suggesting properties based on previous choices. Big data will play an important part in real estate in the future. It allows the software to recommend more intelligent and personal searches.
Redfin, for example, uses the entire Amazon Web Services big data stack.
Examples: Trulia, Zillow, Redfin.
First of all, the property websites need to be mobile-optimized. Google announced that it would be indexing and evaluating the mobile version of your website first. So, mobile app development is now at the top of its popularity.
In conclusion, you should consider your target audience and choose what to make: a website or a mobile app. This data helps you to kill two birds with one stone.
In past years, besides having websites, many real estate companies launched their mobile software apps. That’s the perfect solution for people to use digital technologies for their property needs.
Examples: Zillow, Redfin, Trulia.
Real Estate Crowdfunding Platforms
Real estate crowdfunding platforms allow customers to fundraise small amounts of capital from multiple individuals. These platforms allow people to become investors and customers. On the other hand, you can raise money from a number of investors.
Examples: RealtyMogul, Fundrise, CrowdStreet, Realcrowd, Groundfloor, Streitwise.
To recap, 5 leading real estate market trends will be happening in the industry in 2021:
1. Millennials as the major buying group
2. New business models
3. Global digitalization of the industry
4. Local market focus
5. Changing estate priorities for boosting business ideas
Many experts say that without proper technological changes in the real estate industry, many companies can disappear.
So, it is crucial not only to know the current real estate technology trends but also to implement them in your business.
The real estate technology trends that will prevail in 2021 are:
1. buying and selling websites
2. virtual reality, AI, ML
3. integration of property value estimations
4. real estate CRM software
5. Blockchain and Big Data,
6. Internet of Things
7. real estate crowdfunding platforms
8. artificial intelligence algorithms
9. mobile apps.
Frequently Asked Questions
Despite the economic crisis associated with the Covid time, the global real estate market in 2021 is in a growth stage. Buying and competitive power is not decreasing but increasing at the internal level, allowing real estate website owners to focus on the local market.
The forecasts for the real estate market are optimistic. Most analysts are confident that the tech development and population growth create favorable conditions for the real estate industry and various services related to it.
We can highlight 8 main trends: 1) buying and selling websites 2) virtual reality, AI, ML 3) integration of property value estimations 4) artificial intelligence algorithms 5) IoT and smart home services 6) real estate CRM software 7) blockchain and Big Data 8) Internet of Things 9) mobile apps.