How Home Buying Technology May Be Pushing Prices Higher
Housing prices have followed an upward trajectory since the start of the COVID-19 pandemic in 2020, and technological advancements in the home buying process may be driving those prices even higher. Home buying platforms allow potential buyers to browse through updated housing information at lightning speed, moving along the process of weeding out unfavorable properties and, ultimately, making an offer.
According to Forbes, that increased efficiency exaggerated the rising demand that came from lower mortgage rates and pandemic changes in demand. Quicker offers in a post-pandemic housing market lead to higher prices, which then exacerbate a feedback cycle of even higher prices for the next wave of buyers.
A critical technology change has been electronic signatures which have become the standard since the 2000s boom. The buyer and real estate agent can now discuss over the phone what to put in the offer and have the offer drafted, signed (electronically over the internet), and submitted to the seller’s agent in as little as one hour.
No more arranging to meet the buyer in person after they get off work so they can sign an offer with pen and ink. What often took a day, can now take an hour.
In addition, the amount of information house buyers have today is phenomenally more than during the 2000s boom. Potential buyers can find tons of information online about the general real estate market, individual houses for sale, and sold prices. They may not need to see as many houses in person before they feel confident enough to make an offer.