How Moore’s Law Applies to Real Estate


09 Oct
09Oct

Have you heard about Moore’s Law? Here’s a snippet of this theory.

What Is Moore’s Law?

Moore’s Law (named after Gordon E. Moore, one of the founders of Intel) alludes to Moore’s insight that although computer costs are cut down every two years, the number of transistors on a microchip increases twofold.

We can further simplify this by envisioning that we can look ahead to acquiring an upgraded computer at a cheaper price every two years. For the general audience, this theory can be both perplexing and astounding. Especially when we can easily assume that the more advanced and modernized an invention, the more expensive it is.

An Overview of Moore’s Law

From the start, Gordon Moore did intentionally not create this law. He was only stating his observation upon seeing the evolving direction of Intel’s chip manufacturing. As it turned out, in due course, his observation became a prediction, which ultimately became the tenet known as the Moore’s Law.

Moore’s Law in the Real Estate Industry

Now, you may be wondering how this principle becomes relevant in the real estate business. Here’s the real deal.

Gunnar Branson, strategic marketing coach, stated that—because of Moore’s’ Law, which used to be only a prediction—real estate is experiencing a diminishing demand for physical space through the years.

During a real estate conference on February 9–10, 2015 in Charleston, Branson indicated that this is not the time to sell more square footage, as far as real estate opportunities are concerned. Instead, the goal should be to sell less physical space at an increased rate.

While many investors would doubt on this statement, Branson further explained that the shrinkage of physical space offers an opportunity, not a hurdle. This makes good sense because big spaces are getting scarce, especially if you want to live within or near the city.

Diversity in Housing Types

Unlike before where acquiring a house would only mean buying a spacious area or land, housing types have become more diverse in this day and age. Below are two types of small-spaced houses that you can easily acquire in the market:

  • Condominiums

Most of the time, we use the abbreviated form condo to refer to a type of living space resembling an apartment living. Unlike the apartment, which is rented, you can own a condominium in full.

Some condos are also similar to single-family homes. However, the building exteriors, yards, and streets are owned by a community association.

  • Townhouse

A townhouse or a town home is an individual house put next to each other. This means one or two walls are shared between adjoining homes. Its main difference from a condo is that, with a townhouse, the owner owns the land as well. The condo only owns the interior of a given space or a unit.

These small-space living conditions are growing at an exponential rate—a tangible proof that Moore’s Law is working great in the real estate.

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