After Real Estate’s Out Of Control Year, Proptech is Levelling the Field
2021 was the year in which the US housing market truly caught on fire. CNN tracked real estate property price rises maintained at over 20% throughout Q3, with end-of-year figures unlikely to divert from that trend. As real estate prices have skyrocketed, the market has become a lot shakier. Buyers are on uncertain territory, sellers are looking to push prices up as much as possible, and mortgage rates are shifting. It’s somewhat of a void that is calling out for determined action to rectify the market, and Proptech is helping to bridge the gap.
Homebuyers are increasingly allowing themselves to be dictated by the market. Time magazine suggests that is one of the most common mistakes being made by would-be homeowners; allowing the market to take control of their decisions. A big cause of this is a lack of quality information. Real estate prices are constantly in the news, and misinformation is rife. According to real estate industry experts The Home Loan Expert, high-quality tools, like mortgage calculators that are inclusive of the latest rates, are enabling homebuyers to make informed purchases, rather than being pushed around by the latest sensational news headlines.
Demystifying the Process
The real estate process is confusing even with tools in the right hands. This is why the entire industry that has built up around purchasing a property, from real estate agents to attorneys; deal with individual aspects of the purchasing process that can be inaccessible to laymen. However, that has come with prices attached – there are taxes, fees, and commissions at every stage of the process. Several proptech startups have sought to take that issue away. TechCrunch highlights Vietnam-based startup Homebase, which has raised $30 million in the pursuit of making it easier to buy homes. By moving the real estate market process to the modern, digital-led service that consumers are familiar with in so many other areas of life, home buying will be considerably less confusing.
Slowdown Creates Promise
Just as the real estate market has boomed, so has Proptech. According to Business Insider, $32 billion was poured into the sector through various investment methods in 2021. This has led to an inflationary cycle; many Proptech ideas are being fully funded without the usual requisite evidence as to their feasibility as a business. That means that not all platforms will be acting equally, and it is once again up to homebuyers to make a good call on the information that they’re receiving. With further investment and a cooling market, the best ideas should start to float towards the top of the Proptech scrum – but, until then, homebuyers will be reaching for tried and tested ventures.
Proptech will continue to soothe the real estate market, but it has problems of its own to attend to. Fortunately, the hype around real estate should see the hype around Proptech cool. With that will come a more level playing field for buyers.