Is the American Dream in danger of extinction?
How technology is being used to level the playing field for millions of would-be homebuyers in an unpredictable market
The battle for the American dream
Real estate in 2022 is dominated by high prices for new homes and low inventory of affordable ones, as reported by Fortune magazine. Potential buyers with household earnings below $100,000 are seeing the biggest loss of affordability. For every 125 households earning between $50,000 and $75,000, there is just one affordable home for sale, according to NAR. A substantial drop from one listing for every 46 households in 2019.
Supply shortages, economic impact, and the Great Migration caused by COVID, have further impacted pricing spikes and led to a continued decline in housing inventory. By one estimate, the U.S. is more than 3 million homes short of fulfilling the demand from would-be homebuyers.
One company took notice
SkySlope, a disruptor in the real estate industry, creates technology solutions for agents and brokers. During the pandemic, they introduced new mobile solutions that enable homebuyers to deposit earnest money checks, as well as give home sellers the power to fill complicated disclosure forms, simply.
Simultaneously, SkySlope witnessed the difficulties agents and home sellers were facing in managing, sharing, and filtering offers on homes in a timely and fair manner .
In short, housing shortages and market swings create the perfect breeding ground for discrimination.
“Discrimination, implicit bias, and issues around fair-housing have always been under the surface of real estate. However, they are now squarely in the spotlight,” says Tyler Smith, CEO of SkySlope.
The Fair Housing Act protects Americans from discrimination based on race, color, national origin, religion, sex, familial status, and disability. In uncertain markets, homebuyers frequently craft personal cover letters that reveal many of the personal characteristics listed above, as a way to help their offer stand out.
As noted by Jerusalem Demsas at Vox, this seemingly harmless practice can lead to discrimination:
What personal cover letters ask is for people to show that they’ll be “nice, normal people”…This opens the door to people’s subjective measures of what that means — if you’re more likely to feel a connection to someone who looks like you and who has a similar background, that can lead to discriminating against people based on any one of the protected classes the Fair Housing Act is meant to safeguard.
Starting a movement
SkySlope believes technology has a responsibility to be a part of the fair housing solution. By developing tools that level the playing field for all potential homebuyers, they’re committed to giving everyone equal representation.
Earlier this year, SkySlope teamed up with the third largest MLS in the nation, Stellar MLS, to co-create an offer management solution. However, SkySlope takes the position that the industry needs more than simply another offer management tool, it needs a movement.
“At the heart of everything SkySlope does, we aim to make a significant impact with our customers and the industry we serve,” Smith continues. “That is why we could not ignore fair housing initiatives while building our offer solution.”
When markets become unpredictable, people begin to think home ownership is out of reach or that opportunities are likely to be withheld from them.
Only 17% of consumers believe it’s a good time to buy a home, according to Fannie Mae’s Home Purchase Sentiment Index. That’s the lowest it’s been in two years and marks the third straight month the index component reached a record low.
High home prices were cited as the main reason people were pessimistic toward home buying. Soaring home prices discourages people into thinking the system is stacked against them; that opportunities will only be given to the wealthiest people with cash in hand. This begins to tear at the very fabric of the American dream.
“Technology can influence, educate and ultimately change consumer behavior, giving every offer — every person — the confidence that they are receiving equal representation,” says Paul Harmon, COO of SkySlope.
SkySlope’s offer movement plans to incorporate features that obscure information that could lead to discrimination during the offer consideration process. Offers are displayed and compared using data critical to the sale, eliminating opportunities for implicit bias.
The company also intends to bring transparency to all stages of the offer process, in turn giving buyers peace-of-mind, knowing their offer was presented and considered, every time.
“Agents want to help people and to do the right thing,” continues Harmon. “We believe a few checks and balances, continued education, and tips, will protect agents from potential missteps, right when it matters most.”
Established in 2011, SkySlope is the customer experience platform managing real estate transactions from contract to close. Serving over 400,000 real estate professionals across the U.S. and Canada, SkySlope manages nearly 3 million transactions annually. SkySlope is on a mission to build solutions that reshape the real estate industry by creating the most powerful autonomous transaction platform. For more information about SkySlope, visit http://www.skyslope.com
Have questions or want to learn more? Contact us so we can show you what the movement is all about.