If there’s a sector which got hit in a pretty strong way from this pandemic, that would definitely be the world of real estate and property. With dozens of companies and agencies suffering from the fact that companies and building contractors were on pause during lockdown, let’s try to dissect what the major trends within the real estate industry will be.
Harder To Get Mortgages
Tighter lending standards, simple as that. Banks learned their lessons from the 2008-2009 financial crisis and have tightened lending standards since then. However, banks are further tightening lending standards because they also are unsure when the economy will recover.
If it’s hard to get a mortgage, it’s harder to buy a home. I’ve talked to several mortgage lenders in depth about the state of the mortgage industry. They all say that getting a jumbo or super jumbo loan poses more difficulty
Banks are requiring 20% or greater down payments and 720 or higher credit scores for a jumbo loan. As for getting a conforming mortgage loan, it’s still OK as Fannie Mae and Freddie Mac are still buying because the government is supporting them.
Built With Data
Data has become the most valuable asset on Earth and, for quick buying and selling processes such as commercial property auctions and residential property auctions, this could be a game changer. Today, in fact, there is a growing cadre of technology startups, as well as behemoth real estate companies, that are beginning to seek insights through the real-time crunch of enormous data sets that power Artificial Intelligence tools. The generated knowledge is starting to underline vital real estate decisions—what property to build, how to price a for-sale residence, and how to reach buyers, among others.
Utilizing big-data-fueled tools, developers better gauge potential projects; agents more efficiently serve clients; and home shoppers and sellers receive a real estate experience free of clutter and redundancy.
Yet, to understand the potential of “big data,” a buzz term splashed across headlines and uttered at industry conferences, it’s useful to differentiate it from the conventional data collected in the real estate industry.
The evolution of the real estate sector is definitely going to move towards technology and it’s mandatory, at this stage, to realise the fact that in order to survive this pandemic in the real estate world, you must embrace such technology pieces.