Texas real estate markets have enjoyed a burning hot couple of years as markets throughout the state (but especially in the big cities) flooded with demand. But adjacent to this phenomenon, you will find a different kind of event brewing in real estate – namely, the encroachment of innovative, disruptive tech companies in the Texas real estate industry.
Why do several experts believe that Texas’ real estate industry is ripe for disruption? You can broadly point to four precipitating factors: tech migration, digital marketplaces, shifting demographics and the rise of crypto in Texas. Below, let’s unpack these factors to learn more about how Texas real estate could shake up in the coming years.
The Tech Migration from Silicon Valley
For disruption to happen, you need disruptors. At one time, Texas was more of a farm team for the national tech efforts localized in places like Silicon Valley and Palo Alto. The state produced several innovators, but they tended to head west toward greener pastures.
That’s changing. Recently, the LA Times asked, “Is the Future of Tech in Austin, Texas?” Investopedia ran an article entitled “Why Silicon Valley Companies Are Moving to Texas,” and Bloomberg issued a stern assessment when it cautioned that “Silicon Valley Won’t Last Forever, and Texas Knows It.”
This tech migration from Silicon Valley makes Texas’ real estate industry ripe for disruption. As more proptech companies (short for property technology) make Texas their first market for rollout, you can expect to see the state’s real estate institutions feel the pressure.
Digital Marketplaces and the Rise of the Consumer
The Lonestar state has always had a rugged independent streak. Conventionally defined by a wariness toward monopolizing efforts and opaque organizational practices, Texan consumer values historically stood at odds with the real estate industry.
For a long time, the real estate industry had an earned reputation for being cagey, inaccessible and occasionally collusive. This made the industry frustrating for real estate consumers in the state; it also made it ripe for disruption.
Take Nobul as a classic example – a proptech company that recently laid down roots in Texas. The real estate digital marketplace arms consumers with resources and information on agents (like commission fees, sales histories, average verified reviews, etc.) in a bid to empower consumers. As Nobul CEO Regan McGee told Dallas radio station KRLD, “If you’re a homebuyer or seller, you can pay lower fees, get better service.” it’s all done with the accountability of a tech company that’s designed to be consumer-centric right from the beginning.”
The Rise of Crypto in Texas
According to CNBC, Texas is one of the leading states in crypto adoption. Meanwhile, crypto and blockchain are at the forefront of several disruptions in the real estate industry.
Blockchain technology can remove the need for third-party real estate professionals like lawyers and escrows (by leveraging “smart contracts”). And consumers can use crypto and blockchain to buy “tokens” of real estate in a fractional ownership model, which may revolutionize real estate investment.
It’s too early to tell whether crypto is a big, blustery flash in the pan or an enduring alternative to centralized assets. Still, Texas’s current infatuation with crypto certainly makes the state’s real estate industry ripe for disruption.
Shifting Demographics in the State
According to the Texas Demographics Center (pulling its data from the US census), millennials have been a fast-growing demographic in the state over the past decade. They also happen to be the country’s largest buyers of real estate, having overtaken baby boomers and Gen Xers.
Normally, demographic shifts don’t change much – and they typically don’t precipitate disruption. But millennials are different; they are tech-driven and convenience-obsessed, two factors which make them likely to embrace disruptive market entrants. Their growing presence in Texas real estate makes the industry ripe for disruption.
To recap, a confluence of events and preconditions make Texas real estate ripe for disruption – tech presence, consumer values, crypto adoption and shifting age demographics. It will be fascinating to see how the industry evolves in the coming decade.