National Housing Market OutlookBuild-to-Rent

Permanent Tech Disruptions to Home Sales

Rick Palacios Jr photo

Rick Palacios Jr

May 10, 2017

Technology has permanently taken two months off the time required to sell a home. New real estate technologies empower:

  • A new group of highly informed, quick-close, all-cash buyers
  • Very informed homeowners who are increasingly choosing to rent the house rather than sell it, or to sell the home themselves to an all-cash buyer

Traditional first-time and move-up home buyers have a competitive disadvantage in this new market.

Zillow, Trulia,, Redfin, and others now provide home buyers and sellers with a treasure trove of free real-time research tools. They have transformed a historically opaque industry into one that is now almost completely transparent. Armed with better, faster information as well as smart phones, buyers and sellers quickly make informed decisions on homes—sometimes from the comfort of their couch and sometimes from their cell phone standing in front of a home that was listed for sale just hours earlier.

These new technologies have created multiple disruptions in the resale market:

  • Less time to sell. 4 months of supply is now the new normal, compared to 6 months of supply only 10 years ago. Homes can be bought and sold much more quickly than in the old days when it took 30 days to run a newspaper ad and hold the first open house—and another 45 days to get the mortgage approved..
  • Professional landlords. Using proprietary pricing algorithms and local experts, newly formed professional landlords like American Homes 4 Rent, Invitation Homes, Colony Starwood, and Progress Residential can quickly and confidently enter escrow within days or even hours of a listing being posted. Technology also set the stage for companies such as Roofstock to launch an online marketplace for investing in single-family rental homes, reducing much of the acquisition uncertainty for investors while simultaneously driving down costs for sellers. Other companies like Mynd Management and Onerent have simplified property management. In many ways, new technology has allowed the single-family rental sector to become a scalable, institutional investment class, one that we expect to continue growing for the foreseeable future.
  • Lower homeownership. First-time buyers who need the seller to wait for the mortgage approval or a contingent sale are frequently losing out to all-cash buyers, many of whom intend to rent the home rather than occupy it.
  • More home sharing. Airbnb, HomeAway, and other startups have made it easier for homeowners to rent a room or even the entire house, allowing a retiree in need of cash to own their home longer than they would have otherwise. Roughly 5 million people turn 65 this year, and we expect an increasing number of retirees to utilize home sharing as a supplement to savings. Seniors are the fastest-growing demographic of Airbnb hosts.
  • Fewer Realtor transactions: New companies like Opendoor and OfferPad will now purchase your home for cash in as little as three days, similar to the model CarMax has used to facilitate used car transactions.

In conclusion, fast and free information has significantly streamline­d the home-selling and renting process. Four months of supply is now the new normal.

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About The Author

Rick Palacios Jr photo
Rick Palacios Jr
Managing Principal, Director of Research
Rick oversees and guides JBREC’s research platform while coaching his team daily.

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