Over the last decade, one tech sector that affects everyone’s quality of life — from where we live to what we put in our homes — has come a long way. Proptech has made our lives easier with innovations like smart homes, Airbnb, and the ability to shop for and secure a mortgage from our phones.
But major gaps, and opportunities, remain.
For example, the single-family residential market is enormous. Approximately $2 trillion worth of homes were sold in 2021, per CoreLogic. But buying a home is still an excruciatingly difficult process. A team from Keller Williams identified 180 things a seller’s agent does, and even this list, as exhaustive as it is, does not fully account for the many other players in a typical transaction.
Today, buying a house is a lot like running the steeplechase: you have to sprint between obstacles and pray you have the stamina to survive it all. It should not be this hard. So let’s fix it. This is a call to current and would-be proptech entrepreneurs to solve the problems that are close to home.
There has arguably never been a better moment to get started. Capital is searching for good ideas and quality execution. In 2021, venture capital poured a record $11.7 billion into proptech. While the market has started to slow down this year, driven in part by factors such as public market performance, inflation and higher interest rates, there is still strong investor appetite for great and novel ideas with excellent execution.
If no one can find your house online, is it really even for sale?
Starting a business is hard, but we now have a path for proptech, lined with funders and advisers, that can propel entrepreneurs over early obstacles through to maturity and deep market penetration.
Proptech still has fundamental problems to attack, including one of the most common: purchasing a home.
Below are eight high-leverage home-buying pain points that have not been sufficiently addressed. Because of the enormity of the housing industry, even marginal improvements in some of these areas will be greeted enthusiastically, and big leaps forward will be handsomely rewarded.
The challenge: Many Americans cannot own a single-family residence, regardless of how long and how wisely they save. High construction costs, strong demand pushing up prices on relatively low supply, and low incomes can make homeownership difficult or impossible.
This is not a problem solely for lower-income households. The National Association of Realtors’ Housing Affordability Index, which measures the degree to which a family with the median income can afford monthly mortgage payments on a median-priced home, fell 30% between April 2021 and April 2022. Housing is taking up a greater percentage of Americans’ income.