How the Internet affects the real estate market today
In effect, the Internet has made us a much more mobile, always-on society, which has implications for real estate.
With our parents’ generation, there was a distinct boundary between work and home life. They worked in an office all day. When five or six o’clock rolled around, they went home, leaving their work behind. Most likely, they kept their same jobs and lived in the same city or town for decades, too.
Now, because of the Internet and other technologies, the wall between work and home has crumbled. With Wi-Fi and 3G Internet access, laptops, iPads, and cell phones, you can work from just about anywhere, at any time.
The Internet gives the option to live where you want
The company you work for may have its offices in Manhattan. But depending on the company, that’s no reason why you can’t work remotely from your home in Colorado—which is much more affordable than a comparable New York City-area home. As long as your employer or your business is flexible, you can choose to live wherever you want. In fact, I know of a woman who worked full-time for a bank in Florida—a job she performed mostly from her houseboat in Virginia.
The Internet also requires you to be flexible
At the same time, the fast, global nature of the Internet economy can require people to be more flexible in their living arrangements.
For example, the Internet makes it much easier to do business with developing countries, where there is a lot of growth potential. The company you work for, then, might be expanding to India. And the company wants you to relocate there right away to help get things up and running.
The Internet also makes it easy to start new businesses. Also, in this tough economy, companies need to react quickly to shifting trends—by closing an office in Chicago, for instance, and opening one in Arizona.
All these trends add up to a fluid, ever-changing business climate, where you have the flexibility to live where you want—but might also need the flexibility to pick up and relocate at a moment’s notice.
What this means for the real estate market
Despite record-low mortgage rates and low home prices, many people are sitting on the sidelines and renting instead of buying.
In this ever-fluid Internet economy, they want to keep their options open. It’s easier to rent and then jump ship on the fly should things change.
Would-be buyers are seeing “short sale and foreclosures” of homes that were purchased in the past five years. They don’t want to be in those seller’s shoes should their job or situation change.
Even though things are different now, the wounds are still fresh and people are more cautious than ever. And so, that’s one reason why we’re in a buyer’s market. Simply put, there’s a lot of inventory on the market right now, with fewer buyers.