NAR Releases Reports on Blockchain Technology And Consumer Home Buying Preferences/Trends
Real Estate In-Depth | December 2018
WASHINGTON—The National Association of Realtors unveiled a Blockchain Guidance Paper earlier this month during a webinar designed to keep real estate at the forefront of conversations surrounding the emerging technology. NAR also authored a paper that found buyers continue to overwhelmingly utilize both the Internet and real estate agents in the home-buying process.
Although blockchain usage is not yet widely prevalent in the industry, NAR has worked to proactively educate state and local Realtor associations, members and consumers on hurdles that could arise as the technology begins to penetrate the market, ensuring transactions with Realtors “are accurate, efficient and reliable,” as the Guidance paper reads.
Blockchain technology can be explained by using online platforms to conduct a transaction between two or more people. Whatever the transaction is, all parties involved receive information in a secure way. When all parties agree to the terms of the transaction, there is a recorded “block” that locks the agreement in place indefinitely. This ensures the data cannot be altered unless all parties agree once again to accept changes, which would record the new block. New blocks always include a reference to the previous block, forming a “chain.”
“Blockchain technology is quickly evolving from a theoretical concept into a resource that could become ubiquitous in our industry,” said NAR President John Smaby. “America’s 1.3 million Realtors will be some of the first professionals to fully adopt this technology, and we want to be sure that our members and local associations are prepared to engage and educate their communities as this change occurs.”
While blockchain is predicted to be a major part of all real estate transactions in the near future, its true impact on the real estate industry remains unknown. However, state governments are beginning to anticipate the impending evolution and some legislatures have already moved to ensure laws are in place to protect consumers and businesses.
“As local governments continue eyeing potential blockchain regulation, NAR’s proactive efforts will ensure policymakers understand how legislative action could impact the real estate industry. And, specifically as blockchain eliminates an intermediary from home sale transactions, our voice is key to ensuring the protection of consumers remains everyone’s primary concern,” said Smaby, a second-generation Realtor from Edina, MN. “Blockchain technology has yet to affect the market or consumers in any practical way, but NAR’s industry-leading actions will ensure that all legislative or regulatory efforts positively impact real estate transactions and the industry as a whole.”
NAR also released a report earlier this month that contended consumers retain the Internet as a critical tool during their home buying process, while buyers continue to utilize the knowledge and expertise of a real estate agent. Those findings were part of a NAR Real Estate in a Digital Age report.
The report found that finding the right property was ranked as the most difficult step in the home buying process. Since the Internet is now the first place many people go for information, it is not surprising that 44% of buyers looked for properties online as a first step in the home buying process (the same as 2017). However, 87% of buyers in 2018 purchased their home with assistance from a real estate agent, a share that grows higher for millennials at 90%.
While 99% of millennials and 90% of older boomers used online websites in their home search, only 70% of the silent generation—those ages 69 to 89 years—did the same. Older boomers used a mobile device at over half the rate of millennials (21% compared to 58%).
When it comes to website listing features, photos and online property information were more important to millennials, while virtual tours and direct contact with a real estate agent were more important to baby boomers. Despite visual content growing in popularity and importance, older home buyers found virtual tours more useful than younger buyers.
All buyers typically spent 10 weeks looking for a home, whereas millennials, members of generation X and the silent generations typically spent eight weeks looking for a home. Younger and older boomers typically searched for 10 weeks.
The Real Estate in a Digital Age report also found greater technology use by Realtors and real estate firms to serve the needs of clients. Realtors prefer to communicate with their clients via e-mail (93%) as well as text messages (92%) and instant messaging (37%). Over 90% of Realtors are also using e-mail, laptops/desktop computers, and smartphones daily.
Social media continues to be popular with Realtors, with 76% of females active on social media compared to 72% of males. Facebook and LinkedIn are the most utilized social media platforms among Realtors (at 97% and 59%, respectively) compared to Instagram at 39%.
The top technology tools that provide the highest quality of leads are social media (47%), MLS suite (32%), a brokerage’s website (29%) and a listing aggregator site (29%), according to the report.