The Ever-Shifting Landscape: A Historical Journey Through Real Estate

real estate history

For nearly half of human history, our ancestors used to hunt animals. They didn’t leave much behind except cave drawings, stone tools, and other artifacts.

Eventually, between 30,000 BC and 15,000 BC, our ancestors transitioned to an agrarian lifestyle. This change happened, but not everywhere; some still live that way. However, this transition to agriculture marked a major shift in human history. It led to the development of the homeownership and real estate market, which is well-known today. 

In this blog, we will learn about the early investments in real estate, the birth of homeownership, and real estate development in America.

Establishing a Claim

Many agrarian societies developed similarly. Fertile lands were claimed and occupied by the strongest groups, who defended their land from others. Over time, a system of tribal leaders emerged, and these leaders would assign land, resolve disputes, and demand tribute from their subjects. 

As tribal leaders became more powerful, they began to pool labor and appoint a chief executive officer (CEO) to oversee the community’s efforts. Further, irrigation channels were dug, fortifications were built, farming techniques were improved, and temples were erected.

As a result of these improvements, populations exploded. Farmers could now support more children, and there were more available laborers.

The Original Protection Scheme

Hunter-gatherers lived in small tribes of two or three extended families. Families, on the other hand, soon found themselves living in larger communities without knowing everyone around. It made them vulnerable to raiders. 

Farmers paid homage to the lord or king to protect themselves, who claimed ownership of the land and provided security in return. It was the first system of rent. 

As farming villages grew into cities, the leading descendants of families who had originally claimed the land maintained ownership and became kings, pharaohs, daimyos, and other feudal lords.

Bow Down to the King

In most countries, the system for labor-for-protection developed into two systems: taxes and tenancy. Royal families gave land to their friends in the form of titles and deeds, allowing them to collect rent from peasants living on that land. 

In addition to rent, all people in a ruler’s realm were also required to pay a tax. The rulers also made several other demands, like military service. The peasants reluctantly met these demands as the rulers were the landowners, both by birthright and military rights. Any other ruler could overthrow rulers. Sometimes, a new ruler would also take the throne, but the peasants barely noticed any difference.

However, there was some good news for the peasants. They could trade with other kingdoms, and the overall level of wealth increased. It led to the rise of a merchant class and specialized laborers. They were able to earn a living through skills other than farming. It resulted in non-agrarian shops and houses. These businesses and homes still paid rent and taxes to several lords and kings. But, they were bought, sold, and rented among the common people rather than by the royal class. Richer merchants became the first common-born landlords, gaining wealth and status by owning the houses on the land they did not own.

The King is No More

In the past, many powerful noble leaders were removed from their positions, often by losing their heads. They were replaced by systems that were supposed to let the most capable and smart people lead the country for everyone’s benefit. 

However, what happened was the birth of politics. Title land was divided into smaller pieces and sold in an open market. But the only ones with enough money to buy these pieces of land were merchants or former aristocrats. People like farmers hadn’t made much progress from their roots as farming tribes thousands of years ago.

The Machine Age

The Industrial Revolution was a transformative period in human history, comparable only to the invention of firearms. It had both positive and negative effects on society, depending on the usage of machines.

On the one hand, machines freed many peasants from manual labor, allowing them to do other tasks or receive an education and specialize in new fields. For example, cobblers, seamstresses, and cabinetmakers found their skills rendered obsolete by machines, and many were forced to return to farming or mining to earn a living.

On the other hand, this revolution led to new social classes. Ambitious people could rise in the ranks of society, but they often brought their working-class values with them. It led to the development of new products and services aimed at the lower classes. It also led to new social categories like blue-collar workers and white-collar workers. As the material possessions with the people grew, their desire for new and better things also increased.  

Game-changing Mortgages

Mortgages have existed for thousands of years but were originally available to the wealthy. After the Industrial Revolution, banks started to offer mortgages to the general public, making homeownership more accessible than ever before. 

Today, almost everyone can afford a home, but be careful not to take on too much debt. A mortgage can help you buy your dream home but can also lead to financial ruin if you are not careful. 

The Bottom Line

The ability to own things, especially land, is the foundation of all investment opportunities that we have today. Trade and commerce between groups would be impossible without people living in permanent settlements. Ownership has evolved from being taken by force to something that can be bought, sold, traded, and rented.  

There has always been a cost to renting land and property from someone else. This cost is then paid to the owner for the use and protection of their land. This responsibility was originally held by tribal leaders, then by kings, and now by landlords. Today, we have the right to own our homes, which has changed the way we live.

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Trevor Henson

Trevor Henson is an experienced entrepreneur (10+ highly-successful start-ups) and property investor with a demonstrated history of building and leading teams in investment property management environments, maximizing returns for property owners, and optimizing properties through construction management and re-positioning. He…
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Frequently Asked Questions(FAQs)

The real estate industry began to take shape in the early 1900s with the establishment of the National Association of Realtors in 1908. This organization was created to promote and expand the real estate industry in the United States.