Think about all the services you’ve used in your life that have an underlying real estate component to them. You’ve almost certainly made use of someone’s real estate service at some point in your life, whether you were buying or selling property, renting space, or getting a mortgage. And you’re not alone! Real estate services are a huge part of our economy and culture here in the United States and around the world. Let’s explore their history together!
People in ancient Egypt depended on real estate agents to buy and sell their homes. This was a crucial role because homes were built from brick, and people used bricks to build roads. It was important for Egyptians to have access to new bricks so they could continue making roads; it was also essential that they had access to old bricks for repairs. To make sure everyone had access to bricks, Egyptian families sold their houses and moved after a certain number of years. If you owned your home, you knew you would always have a place to live; if you didn’t own your home, you wouldn’t be able to return there (since someone else would own it).
Housing in Ancient Greece consisted of either simple, one-room hovels or larger apartment houses. Walls were made from sun-dried mudbrick, or adobe and plastered for protection against the weather. Roofs were generally made from reeds or flat pieces of wood covered with clay, while interior walls were lined with reed mats. Floors would be strewn with straw, wood shavings, or sand. All homes featured a courtyard that provided extra storage space, animal housing, as well as access to fresh air. Few homes had glass windows; instead, they relied on shutters to protect them from invaders. Most homes did not have a full bathroom (and certainly no indoor plumbing), though some wealthy citizens did have baths installed in their homes.
Real estate has been used as a legal term since at least 1606 when it was defined as land that could be bought and sold. Romans formed three different kinds of real estate: landed property (dominium directed), rights to property (dominium utile), and use rights to property (usufruct). The second category included slaves, who were seen by Roman law as things rather than persons. This is probably why manumission—the freeing of one’s slave—was possible in ancient Rome. Use rights did not survive beyond feudalism in most places; however, in some states usufruct was taken up as an equivalent to freehold, meaning allodial title with total ownership for practical purposes if not outright.
This was an ancient Greek empire that grew from about 300 AD and ended in 1453 AD. The term Byzantine Empire is used to describe two different empires: Roman and Eastern. Rome’s Byzantine Empire lasted from approximately 300 AD to 476 AD, when Emperor Romulus Augustus was overthrown. At that time, Constantinople became known as Byzantium, a colony of Rome. The Byzantine Empire continued for another 1,000 years until it fell in 1453. It bordered what is now Russia, Armenia, Georgia, Albania, and Greece. Since its end, many historians consider it to be one of history’s greatest civilizations. It left behind great architecture like Hagia Sophia Cathedral (an eastern church built-in 537) and paved the way for modern government with concepts like a universal law.
The property-owning serf was known as sensual. He worked to improve his property but could not sub-let or give it to anyone without permission from his feudal lord, who had invested in improving it by erecting cottages for them and probably clearing woodland for their use. Life changed with French King Louis XIV’s edict: Le Roy meurt et Les biens (the king dies and his assets pass on to someone else). This led directly to what is referred to as Real Estate law today: legal ownership passed through primogeniture rather than folgenurage (dying intestate) thus ensuring clear inheritance.
Early Modern England
1660 – 1760: Establishing a private market for land sales helped to fuel some aspects of England’s Industrial Revolution. During these years, farmers shifted their production from food to goods that could be sold in London’s growing number of factories. From about 1660 to 1760, per capita income rose by 75 percent. While historians aren’t sure exactly why economic growth accelerated during this period, one likely reason is a capital increase—more people owned property and more people invested in that property through mortgages. These investments allowed more productivity growth because more money was being spent on labor-saving technologies like spinning jennies and looms.
19th Century America
The Birth of a New Industry: In 1868, John D. Rockefeller bought out his business partner, doubling his net worth in one fell swoop. Rockefeller did not acquire his wealth by investing in real estate services; instead, he invested in other companies that provided goods and services to customers who lived beyond their local market. The service economy was born—and with it came diversification and innovation as entrepreneurs sought new ways to monetize their goods and services. It took more than 30 years for real estate services to become a dominant industry in America’s economic landscape. But once real estate became an integral part of how Americans built their lives and businesses—how they shopped, sold products, purchased cars, and even chose where they went on vacation—it fueled tremendous growth for decades to come.
20th Century Worldwide
The 20th century saw a massive change in real estate. In 1912, William Levitt developed a way to use mass-production techniques to build homes quickly and efficiently, thus lowering construction costs and opening up homeownership to millions more Americans. During World War II, more than 10 million new homes were built, many in just weeks. After World War II, construction boomed again as returning servicemen and veterans used GI Bill money to buy new homes with low down payments that did not require interest payments until one year after purchase. By 1950, 90% of all American workers lived in suburban areas. By 1980, about 80% of all Americans lived in suburbs. Eventually, suburban growth leveled off and even declined somewhat by 1990 due to rising crime rates and changing economic conditions. Recently, however, it has rebounded due to population growth and increasing demand for housing from people who want to live closer to where they work. Currently, about two-thirds of people live in suburbs.