Homebuying in Pennsylvania and the rest of the United States is facing a decline. Experts put forward several reasons for this. From new homes flooding the market to higher interest rates and high student loan debt, there are many reasons Americans are not currently purchasing new homes at the rate they once did.
According to Forbes, there was a 6.4% decline in December of 2018 compared to just the month before. The professionals who take the greatest hit when this happens is real estate agents. These professionals rely on real estate transactions to make money, usually from commission. Even so Pennsylvania remains one of the top states to earn an income in the real estate business as an agent. In 2017, agents in Pennsylvania made a mean salary of $66,550.
Some experts put forward that what the real estate industry really needs is a little shaking up and Silicon Valley is attempting to deliver exactly that. CNBC notes that in 2017, investors poured $3.4 billion into real estate tech startups. This is five times the amount it was in 2013. Tech developers even have their own name for this new sector in the market: proptech.
In 2018, Opendoor raised about $725 million to invest in proptech. The company’s goal is to make moving as easy as possible with the help of technology. They evaluate a home, make an offer and purchase homes from owners so they can move on to their next property. They then carry out some minor improvements and resell the property in 90 days or so.
Opendoor is not alone in executing this idea. Companies like Zillow, OfferPad, Knock and Redfin also offer similar services and flip houses. Many real estate agents worry that these companies may replace them, but Opendoor actually keeps 100 licensed real estate agents on its payroll. It could also help to generate more real estate transactions. As one of the founders of Opendoor noted, if moving becomes easier, people may become more likely to engage in buying and selling.