On Bubbles and Real Estate Robots
August 23, 2016
Addressing a packed ballroom at the Sheraton Grand in Chicago Monday, National Association of REALTORS® Chief Economist Lawrence Yun offered up a few key predictions for the next year or two, as well as one long-term guess about the future of a career in the real estate industry.
Yun addressed attendees at NAR’s Leadership Summit, which is a planning and educational event for chief staff executives and presidents-elect of state and local REALTOR® associations. He noted that there’s been some speculation about whether or not there’s a bubble brewing in the residential market. While he said there might be a bit of a slowdown coming, he told attendees he sees no need for concern, for one big reason: “We have a housing shortage,” he said. “We may be reaching the turning point at least in terms of sales activity, but not pricing.”
However, Yun did sound a small alarm about commercial real estate possibly being in a small bubble. His advice to real estate pros was to “be careful with commercial real estate prices, particularly the trophy properties.”
With the current focus of the presidential campaign on the impact of international trade on domestic employment rates, Yun told attendees that somewhere only around 10 percent of job losses are due to factors such as international trade, with the other 90 percent of jobs disappearing due to automation and advances in technology. He said this bodes better for real estate than others in the housing industry, however. He noted that mortgage lending, which relies on set formulas such as debt-to-income ratios are easier to teach robots than the specialized knowledge of a real estate pro: “You need to know all the idiosyncrasies of your local neighborhood, or at least you should.”
—Meg White, REALTOR® Magazine
Updated: October 17, 2018