(contribution)
As the year comes to an end, it’s a good time to reflect on what’s happened so far and look ahead to the future. When it comes to the real estate market, it’s interesting to see what has impacted (and may continue to impact) home prices and availability.
construction
If you’ve been to the hardware store since the pandemic ended, you may have noticed that prices have fluctuated wildly. Sometimes the cost is justifiable. Also, sometimes it’s outrageous.
There are major disruptions to supply and production chains. For example, a rare freeze in Texas knocked out a factory that produces resin used to make PVC pipes. Until factories were back up and running, prices were through the roof. After that, prices fell somewhat, but never fully recovered.
High prices and unpredictability of supply keep people away from large construction projects, which is unfortunate when we face such a severe housing shortage. The good news is that some construction is progressing.
The Bella Vista subdivision project, located across from the Ukiah Valley Athletic Club, is expected to break ground in early spring. Naturally, when it comes time to sell your home, increased construction costs (labor and materials) will affect the price of these homes, as well as how many and how long they will be built. But at least we finally had a new market-rate home.
Labor and remote work
Changes in the labor market also affect real estate. The government’s reclassification of what it means to be an independent contractor will increase labor costs, and the minimum wage for health care workers and fast food workers will also rise. This can affect how much people can pay for housing.
Increased workforce mobility impacts real estate in other ways. Beautiful rural areas not close to urban centers with good-paying jobs were once unable to command high home prices, but that is changing in areas with fast, reliable internet.
After the pandemic forced everyone to work remotely, the last resistance to it seemed to have been crushed. While some jobs must now be done in-person (it’s hard to get a remote haircut or have a plumber fix a leak over Zoom), many people are working from home or on the go. I appreciate the flexibility I have in my work.
I know a man who lives in Sebastopol and is based in Chicago. He goes there once a month for a week. Another man runs a Ukiah real estate office from his home in Bakersfield. He comes here about every 6 weeks.
Although there are benefits to having people working together in an office, there are also many inefficiencies. The social considerations required for face-to-face interactions take time. Polite people ask how others are doing and whether their children are growing up. Email, on the other hand, lets you get your point across quickly and no one will think you’re being rude. (Don’t get me wrong, I like social interaction. I’m just saying it takes time.)
artificial intelligence
Although we haven’t really felt the impact of artificial intelligence yet, I think it’s hard to predict how it will change the way we all do business. At a recent staff meeting, our Yale Manager, Jason Vanhausen, gave a demonstration of using AI to create advertisements for homes for sale. He entered little information into the system, but as the home’s features were published online, the AI program added all sorts of relevant details. Will all advertising in the future be powered by AI? I don’t believe in it, but AI could give us a good ad run-up start and speed things up.
Ultimately, AI could actually help by streamlining and automating certain work processes. Imagine if AI algorithms could continue the building permit process, eliminating the need for government officials to track documents or schedule inspections.
Next week, we’ll introduce some more industry disruptors.
If you have any questions about property management or real estate, please contact us at rselzer@selzerrealty.com or call (707) 462-4000. If you have ideas for future columns, please share them with me. If I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.
Dick Selzer is a real estate agent who has been in the industry for over 45 years.
1 Comment
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