Half of all home purchases in 2030 are going to be made using alternative methods of financing.

By then, or possibly even before, cash offers will become the default purchase offer made by buyers if they want a chance to make a winning offer.

The inventory shortage will continue through the decade, keeping prices at least as high as they are now and likely higher.

That will lead more people to explore co-ownership options or the opportunity to share a property with friends, family or strangers.

The future is more digital, more seamless, more diverse and more conscientious, according to the industry titans who took the stage at Inman Disconnect 2022. That listing in 2030? It might literally talk to you.

These were some of the predictions offered by a group of legacy and disruptor CEOs, venture investors, brand specialists, brokerage leaders and other insiders who gathered in an oasis in the Sonoran Desert to talk about the biggest changes coming to the real estate industry in the next decade.

The entire event was off the record. But Inman had a reporter on the ground to pull out the key takeaways and predictions for what real estate will look like in 2030. 

The future will bring challenges, too. Brokerages are going to have to figure out how to meet the desires of agents in what many believe will become a permanent hybrid and fully remote work landscape. Some agents may want an office as a home base. Others might want to be fully remote. Flexibility for their workforce will be a key to success.

Agents, meanwhile, will have to adapt to changing needs from consumers. Some of those clients will want a transaction-focused, touch-free homebuying experience. Others will need a hands-on guide. Several leaders suggested agents must figure out how to become more of a financial adviser for their clients.

Real estate brokerages and agents are also going to have to wade into the metaverse.

The invite-only event was held at the Parker Palm Springs, a boutique hotel on 13 acres with landscaped corridors of hedges, citrus trees and herb gardens that conceal great lawns, fire pits, pools and ballrooms.

Here, about 150 of the foremost leaders of real estate shared their thoughts on the present and future of buying and selling homes.

The biggest and boldest predictions from Disconnect 2022, shared without identifying who made them, below.

PREDICTIONS FOR THE INDUSTRY

Prediction: Anything but cash offers is considered “subprime.”

A general theme emerged among industry insiders that the amount of home purchases using “alternative financing” would make up 50 percent of the transactions by 2030.

One group predicted that within two years — by 2024 — any offer with a financing contingency would be considered “subprime.”

“We believe that cash offer products, so people who are making cash offers, will be the default scenario by 2024,” a representative of the group said. “In most major markets, if you submit an offer that has a financing contingency, that will generally be considered a subprime offer.” 

That would more than double the number of people buying homes with cash, which was 23 percent in 2021. Companies have been offering new models to help strengthen buyer offers by letting them make cash offers.

It was perhaps the boldest and most specific prediction among lots of chatter about alternative financing for home buying. In general, many foresee a growing importance for companies that strengthen buyer offers or allow them to buy a new home before selling their current one. 

“More than a third of sellers will buy before they sell,” another speaker said. “And more than 50 percent of buyers will use financing tools to make all-cash offers.”

Prediction: Companies without a social conscience won’t thrive.

One industry leader said there’s enough room for the legacy companies as well as the disruptors to operate in real estate. But they said the key difference was in who would simply survive and who would thrive.

This encapsulated discussion around growing concerns over climate change, diversity, social injustices, wealth discrepancies and more.

“The companies that are really going to thrive, they’re going to have a social conscience,” the leader said. “That can be everything from diversity and inclusion, affordable housing, climate change, paying attention to where they can actually make a difference and really make an impact.”

Prediction: Amid shrinking commissions, brokerages will lean into ancillary services.

There has been plenty of chatter among brokers about downward pressure on commissions, and several groups at Disconnect expect that to continue.

That will create a need to boost revenue with ancillary services by providing mortgage and title and even relocation revenue. That would insulate brokerages from downturns in the market while also making them more valuable in the long run.

If more brokerages go in that direction, it would also produce a market for companies to create a seamless way for brokers to offer more services.

“You’re going to have to have this tech platform with ancillary services,” one attendee predicted. “That is going to get commoditized.”

PREDICTIONS FOR AGENTS 

Prediction: Real estate agents become financial advisers.

There is widespread agreement in the industry that buyers are more informed about properties than ever. They’re now looking for real estate agents to fill new roles during the purchase process. 

One way that might manifest itself — especially if buying and selling homes becomes an easier process by 2030 — is for agents to act as a financial adviser to their clients.

“The example someone gave was ‘I can do my trust online, but I prefer to meet with an attorney instead,’” one executive said.

Prediction: The metaverse’s $100 billion opportunity.

It was a topic that some were eager to talk about, while others were more reluctant to discuss: the metaverse.

What is it? Who cares about it today? Will it grow in the coming decade and, if it does, how fast?

Several attendees said brokerages and agents should learn up on cryptocurrency and get familiar with the metaverse, as it may be a massive opportunity to help guide consumers through purchases of digital property.

In these metaverses, digital “land” can be bought, sold and developed entirely within a virtual world. A metaverse is a 3D online world where users can interact, hang out and, in some cases, own their own corner of the virtual landscape.

“The innovations in metaverse, in virtual real estate, which also includes crypto, NFT, [decentralized finance], it’s obviously going to have an impact,” one leader said. “We may not understand it, but our kids certainly do. We really need to be aware that there’s a train coming.”

“The innovations in these fields are going to touch 30 to 40 percent of real estate transactions by 2030.”

The numbers could be huge, they said. It could be $100 billion in transactions by 2030. That would be an immense, new market.

PREDICTIONS FOR CONSUMERS

Prediction: Think Tinder, but for finding a housemate.

Industry leaders are clearly focused on the concept of co-ownership, fractional ownership, accessory dwelling units and any new concept, product or company that helps people take ownership of part or all of a home. 

Some talked about a growing trend for “Scandinavian living,” or living in groups in the same house or in multiple, smaller houses on the same property.

Whatever the case, co-ownership was a buzzword at Disconnect among titans of the industry. And that creates the opportunity for new or existing businesses to satisfy a growing group of people looking for ways to own homes or properties with people outside their immediate family.

“That could become the norm,” one leader said. “Do people even have a primary home anymore? Or do they have one residence here, one residence there?”

There was much talk about the growing normalcy of buying with groups outside the family in the coming decade. That could be facilitated by a company managing the purchases, maintenance and agreements of a home. Or perhaps it could be handled by new services that make it easy to find co-owners (think swipe left, swipe right for a housemate). Time will tell.

Prediction: Home buying is going to become a whole lot more user friendly.

Think about Zillow, Redfin, Trulia. The change the online search portals brought about in the home search space was only half the battle, multiple industry CEOs said at Disconnect. 

That made finding homes for sale and picking up more information about them much easier than it had been. But it still left a cumbersome purchasing experience that has yet to be revolutionized. That revolution will happen over the coming decade.

Many industry insiders have been investing in companies and products that seek to make the processes of buying and selling homes frictionless, and few believe the work is done. It happens, they said, in the next eight years.

“The homebuying experience for consumers is going to be as digital and as delightful as home search is today,” one CEO said. “The change we’re all going to experience between 2022 and 2030 is going to feel as dramatic as the home search change felt between 2002 and 2010.”

Prediction: Listings will talk to consumers. (Yes, really.)

Zillow and Redfin may have revolutionized home search, but the companies offering data about homes will have to continue to evolve to meet the needs of the next generation of homebuyers.

Listings are going to need more experiential data to meet the demands of an increasingly plugged in group of consumers. That means photos, videos, artificial intelligence and even audio.

“Not only visual but you can hear, the data is going to talk to you,” one speaker said. “It’s going to tell you about the house and neighborhoods.”

Prediction: Homebuyers in 2030 will be more diverse than ever.

A loud, clear and consistent theme at the event was around diversity — both in the group of homeowners that is growing more diverse, and with what many said was a lack of diversity among leaders in real estate.

Multiple leaders spoke about the historic lack of diversity and systemic challenges around home ownership. Those days are ending, and the industry must do more to meet prospective homeowners’ needs.

Some saw changes that are already happening, like an industry focus on disparity between appraised values for people of color. One pointed to Realtor.com’s launch of an ad campaign in more languages as evidence of recent industry change.

But there was broad consensus that the industry must work to find ways to help a growing and diverse group of first-time homebuyers enter homeownership.

“In 2030, we’ll be serving the most diverse and educated homebuyer ever. If we don’t get serious about meeting their needs and what they’re looking for, we’re not going to be ready,” one said. “They’re going to inherit their boomer parents’ money and they will be serious shoppers. If you need more reasons to look to make change within your organizations, this is it.”

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