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Real Estate Trends For 2019

Real Estate Is Changing From The Inside Out

If you’re involved with the real estate market you can see what’s happening. Disruption is now occurring from the outside with new investment. From the inside, construction companies and real estate developers are looking for new ways to produce affordable properties. Innovative commercial models like co-working or Airbnb are also opening up the market to new kinds of professionals. Real estate is changing and we continue to be ahead of the curve.

Opportunities Abound, With New Investment

Forbes published an article back in February entitled, “The Future of Real Estate Tech: How We Got Here And What’s Next In An Exploding New Ecosystem.”

In that article, writers David Snider and Matt Harris share about the staggering increase in the investment of real estate technology. According to Snider and Harris, in 2010 an estimated $33,000,000 was invested in this domain. However, in 2017, a reported $5,000,000,000 was invested. That is over 150x increase in less than 10 years. Most of this investment has been going towards the scaling of existing or newer companies.

U.S. real estate is approximately a $35 trillion asset class, with over $1 trillion in revenue generated every year according to IBISWorld Industry Reports. There is a strong drive from entrepreneurs to compete in this arena given the massive potential and upside. With an order of magnitude like this it is easy to understand why so many are looking to find new ways to do things.

Modular manufacturing will be an integral component

Most software technology businesses aim to do things more efficiently. Consolidation, automation, and elimination would make this possible. These three components are the fundamental activity software technology performs in adding value to an existing industry.

  • Consolidation: Bringing together the ability to perform multiple tasks that otherwise occur on different platforms. Combining functions in closer proximity generally adds value.
  • Automation: Having machines do things for us. This reduces human error in theory, and allows people to be more creative in other ways.
  • Elimination: Taking away steps, distance, jobs, or other parts of an equation to make it cheaper to accomplish. What people mean when they say “reducing friction.”

Software technology can only go so far, though. It can automate the process of machines which build something or distribute something. But software cannot actually build things. Real materials can be consolidated, automated, and/or eliminated to make construction more efficient. That’s what modular manufacturing is, and that’s why it is so important to the future of real estate.

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