Many companies lay off workers to cut back on expenses or outsource jobs overseas for cheap labor.
From 2007 to 2017, the past 10 years were a rollercoaster ride. It began with the 2008 financial crisis where outstanding mortgages and loans are the primary cause. This turned into a recession that affected job growth and real estate.
Many companies lay off workers to cut back on expenses and/or outsource jobs overseas for cheap labor. Even service work became competitive. Spending was at an all-time low. It was a journey back to stability, and the stabilizing process started two years ago. What did this decade teach the industry?
The laptop and mobile movement
In 2007, the internet was an information magnet. Social media was for connecting with like-minded people and comments were positive and liberating. The internet evolved into an information hub, social media evolved into an effective marketing tool, and comments evolved into positive, negative, and neutral. The internet cranked communication up to a notch by adding mobile devices such as phones, tablets, netbooks, and PDAs to surf the net. The growth of mobile internet (starting in 2010) accelerated until it overtook laptops as the main source of internet surfing.
Before the internet, real estate heavily relied on newspapers, yard signs, and company promotions to attract buyers. Real estate hopped on the internet bandwagon, and it changed the game of real estate forever. Most buyers today search the internet before visiting a home, and the industry adapted to the change by posting listings and photos online. Newspapers and yard signs are secondary to the internet now.
It’s fascinating how homeowners become selective when the internet provides endless photo and video listings without leaving the house. Most buyers learned that selecting the first home available isn’t mandatory anymore. Fifty-four percent enjoy browsing the internet before making a move.
The choosy attitude guides buyers toward emotional decisions. Emotional decision-making comes from heavy input in the decision-making process. Emotional buying began during the recession. Banks and lenders took homes away from buyers with no remorse as residents cried and became frustrated. As a result, sellers sympathized with buyers and embraced the emotional aspect when real estate recovered from the recession.
Likewise, sellers are equally choosy. They used to take the first offer available due to the recession. Now, multiple offers are commonplace. Sellers can afford to wait on good offers, especially since buyers are bidding above asking price.
After a hard day’s work, buyers expect an easier time getting to local amenities. Commute time is eating away at buyers who dread it, so walkable amenities exist to reduce additional driving.
Walkable amenities attract health-conscious buyers, eco-friendly buyers, bicyclists, and buyers without a vehicle. College students and elderly citizens appreciate walkable amenities as well. Buyers appreciate and enjoy shops, stores, gas stations, banks, and restaurants close to home.
Thanks to the methodical pace of buyers, the first impression of a home becomes a great buy or a deal breaker. When an interesting home pops up, buyers act quickly. The buyer will view the home in person. Then, buyers make a bid. It’s not unheard of to bid, inspect, and close within two weeks. Meanwhile, the song and dance of negotiation seem ancient due to the fast-paced nature.
The renting upswing
The past 10 years created the opposite effect for some buyers. These buyers feel homeownership is never coming, so they continue to rent. A rental home contains less financial risk (i.e., repairs) with more reward. To these buyers, it’s safer to rent than buy.
Buyers hoping to buy another home in another city, state, or country will rent just to investigate the city and/or neighborhood before buying. It’s equally safe to rent before buying because buyers need to make sure the city, state, country, and neighborhood is exactly what they want.
“If you fail to learn from the past, you’re doomed to repeat it.” Realtors, agents, and real estate staff must value the lessons the past 10 years taught us. Otherwise, we’ll end up in another recession. Additionally, we must learn to adapt to changes such as the internet boom. Not customizing the business to fit today’s narrative will result in being stagnant. You’ll also limit business growth by not attracting enough buyers to your company.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.