In 2017, investments in real estate technology reached an all-time high of nearly US$13 billion.
Real estate technology can include everything from hardware to software tools used by real estate-focused managers, brokers, owners, or consumers to collect, evaluate, and distribute valuable data about the industry.
For those involved in the real estate industry, it’s an exciting time to incorporate technology into day-to-day operations and decision-making activities. Not only does technology make everything from buying to selling properties easier, but it’s also making these activities more profitable than ever before. On the other hand, the rise in technology also means there are more services available, and it’s becoming more difficult to stand out in the crowded real estate space. Here’s a look at how technology is changing the real estate industry and the trends leading the way.
Real estate agencies are responsible for gathering and analysing property data, which can be a time-consuming task. Spending too much time on data collection means there is little time to analyse the data in order to advise sellers, generate leads, and ultimately, close deals.
Automation tools can free up a significant amount of time for agents in a number of ways. For one, agents can gather data more quickly with less manual work, and combine it with their own insights in order to provide better recommendations to clients. Automation tools can also come in handy during the pricing stage of a deal, by compiling pricing data from similar properties over a period of time. Additionally, it’s not uncommon for agencies to put all of this data into an algorithm that is able to automatically predict selling prices in a certain area.
Automation tools are a powerful way to help agents and their clients eliminate unnecessary back-and-forth and make decisions faster knowing that they have up-to-date market data. The benefits of automation technology also extend to real estate agents’ marketing efforts, allowing them to deliver social media posts, ads, emails, and text messages to leads all while they are out meeting with clients in-person.
2. Internet of Things (IoT)
The Internet of Things, or IoT, refers to the billions of physical devices around the world that are now connected to the Internet and collecting and sharing data. In the real estate industry, property managers and owners are using IoT devices to monitor and control certain aspects of a property and its surroundings, such as temperature, air quality, lighting levels, security systems, fire systems, and much more.
The ability to control these aspects in real-time provides numerous advantages. For instance, IoT devices can provide property managers with insights on occupant behaviour, energy usage, and allow them to be more proactive about property maintenance and repair.
3. AR and VR
Augmented reality (AR) and virtual reality (VR) technology are not new to the real estate industry. However, from real estate advertising to home tours, the applications of AR and VR are continuously improving and gaining traction. By 2025, the VR and AR market in real estate is expected to reach at least US$80 billion.
The applications of AR and VR in real estate are as diverse as the technologies themselves. For example, VR headsets are being used alongside 360-degree cameras to generate virtual designs of properties. Real estate agencies are offering buyers new ways to tour homes with VR headsets as well.
AR applications in real estate range from simple to truly game-changing. For instance, MeasureKit is essentially a digital ruler, while PLNAR helps users take dimensions of a room to create a floor plan. Homesnap has a “Walk the Property Lines” tool that reveals the property lines around any home.
Then there are AR applications that allow property owners to visualise how furniture and furnishings will appear in real-time, and others that enable agencies to create augmented advertisements on properties (though this use of AR is raising some concerns).
Agents are already giving buyers virtual tours of properties, which is extremely helpful for out-of-town buyers. People can actually experience what it’s like to walk into the property for themselves, without the need to travel.
A blockchain is a digital, public ledger that records transactions in a verifiable manner using cryptographic security features, eliminating the need for a third-party recordkeeper.
Blockchain technology is the backbone of digital currencies, such as bitcoin, and has a number of potential use cases in the real estate industry. In January, a home was sold on the blockchain for the first time ever in the U.S. However, it wasn’t the first case of a real estate transaction involving cryptocurrency in the U.S. Earlier this year, New York-based Magnum Real Estate also announced they would begin accepting bitcoin for property purchases. One of their Manhattan properties was paid for entirely in cryptocurrency shortly after the announcement.
Beyond facilitating property transactions, blockchain technology could be a valuable solution to fraud issues in the industry, specifically in developing countries where real estate and land record fraud is more prevalent. Many countries may soon follow initiatives similar to the UK government, which last year announced a ‘Digital Street’ plan to move its land registry to blockchain by 2022.
For now, expediting and verifying property contracts and registration are the leading use cases of blockchain technology in real estate. However, it’s potential remains largely untapped, and as the technology matures, it will undoubtedly contribute positively to the real estate industry.
New technology for a new age
While the technologies mentioned above are certainly changing the real estate industry, this list is not exhaustive. As the industry moves into the digital age, innovative resources and platforms are emerging all of the time to help property buyers and sellers alike. The key will be encouraging the adoption of these new technologies so that all stakeholders can benefit from more accurate information, and ultimately, make more informed, lucrative decisions. Given the consumer demand for more technology in the real estate industry, we’re likely to see more agents and brokerages investing in high tech to stay competitive in the market.