The “real estate market” is comprised of several four major sub markets:

Residential – This is property used for residential purposes, and includes Single Family Residences (“SFR”), 2-4 units and 5+ unit properties (which are multifamily properties aka apartment buildings).

Commercial – This is property used for commercial and business purposes (retail space, office space, hospitality property, and industrial property), and includes residential zoned properties used for these purposes.

Agricultural – This is property dedicated to an agricultural purpose, like farms and ranches.

Special purpose – This is a category that is a “catch all” and is comprised of the properties that do not fit into the other broad categories.What makes “the real estate market” so difficult?

Ceramic moment saddleLack of Information – Real estate buyers and sellers do not participate in an organized market, such as stock or commodities markets. Those markets are highly organized and they provide a ton of info that buyers and sellers can easily access. Buyers and sellers in organized markets are knowledgeable because information on bids, offers, and sales is readily Ceramic cross available. Though efforts continually are being made to streamline the process, buying and selling real estate is slow and tedious relative to other markets. Information on real estate transactions is often difficult to access because of the confidentiality of real estate transactions. Even with information available on the multiple listing service (MLS), buyers and sellers must rely on industry professionals to help them with transactions.

Privatization of Information – Real estate agents, brokers, and title companies are able to keep a “fog of war” over the real estate business because they hold critical information private, and keep property owners in the dark. Consider a situation where a real estate agent can make more in commission than a property owner has made in profit during the entire time they’ve owned the property. Because this information does not flow freely, property owners are forced into paying high commissions for a minimal amount of work. It’s very deceptive and the role of the real estate agent/broker will shift towards an advisory role in years to come (salary from a brokerage instead of commission from a property owner). This will be a monumental shift in the industry, and it will be completely based on the free flow of real estate data.