The term real estate actually encompasses a broad range of vocations regarding property management. From acquiring lots for development to marketing the finished design in the hopes of leasing or selling, all the way to investing and/or managing the different styles of residential, industrial, and commercial locations, real estate has been around for a long time.
In the United States, real estate has been around since just after the Revolutionary War. The U.S. was no longer under England’s rule, so the government was able to sell land to private owners for the first time, with the granting to use the land however they wished.
In 1862, with the declaration of the Homestead Act, millions of acres were distributed to citizens. The Act said people were given the choice to own land they had maintained for at least five years. This was, in essence, the beginning of the real estate industry. In 1890, there was an attempt to form a real estate association but it wasn’t successful. The National Association of Real Estate Exchanges was founded in 1908, but it wasn’t until 1919 that Agents and Brokers needed to be certified.
As the United States drifted away from agriculture, it moved towards industry. The Industrial Revolution brought about a significant change in the advent of real estate by creating more urban cities so factory workers could be close to their jobs. As the United States became wealthier, banks started granting loans to lower-income families, enabling more people to secure mortgages. Homeownership started to gain momentum for more than just the wealthy.
With the number of residents increasing, the real estate industry needed to meet this new demand. Office buildings began forming, as well as retail stores, lodging, restaurants, and apartments. As these facilities increased, the rise of suburbia was also created. This, in turn, led to more growth on the outskirts of cities, which led to more population, which led to more growth, etc.
In the mid-2000s, the industry suffered when the commercial real estate market peaked. In 2007, the economy suffered a subprime mortgage crisis that affected people all over the world. There was too much borrowing from financial institutions based on a faulty financial model. People were given loans based on the assumption home prices would keep appreciating. This combination of risky borrowers, coupled with fraud and a risky product is what led to the crisis. With a bailout from the government, the market was able to recoup its losses.
Nowadays, the real estate industry is bouncing back and still touches all of our lives – where we live, eat, shop, work, and play. People have found great success in all aspects of real estate, from investing to running their own firms.