The Other Factor In The Housing Boom
May 15, 2002
Technology May Be Playing Role With Market Upturn
Inman News Features
Washington, D. C. -- Home sales rose by double-digit rates in 26 states in the first quarter of this year, according the National Association of Realtors. Nationwide, home sales reached a record of 6.54 million units in the first quarter, up 9.3 percent from the previous record of 6.11 million units in the first quarter of last year.
Every description of the current housing boom points to the same factors: low interest rates, strong underlying demand and the improving economy. Another factor may be at play, however, technology, which has increased the productivity of lenders and Realtors, given consumers better access to better and more instant market information and streamlined the process of getting a loan and closing a house sale.
The net effect of these efficiencies in the long-term should be more home sales.
Technology is recognized for its important role in every aspect of the American economy, but its role in bolstering the housing market goes largely un-recognized and the notion is poorly researched.
Nevertheless, the evidence abounds. Consumers can now search for listings online, giving them more choices and more inspiration and instant gratification. When homes are more effectively marketed, which the Web does, more homes sell.
The loan process has also improved thanks to automated underwriting. Plus costs have come down. It is estimated that automated underwriting programs saves $300 to $650 per loan, and these savings can be expected to grow. As these savings are passed through to consumers, they reduce one of the greatest obstacles to owning home -- up-front costs.
Plus, these underwriting tools are color blind, giving more people access to mortgage capital.
Agent productivity tools and transaction management will be the next big improvements.
Together, a more efficient market is more robust, say economists. So, it follows that the home sale market will reap the benefits of recent technology innovations.
Copyright: Inman News Service