How is artificial intelligence changing real estate market?

How is artificial intelligence changing real estate market?

In the 21st century, data is the new oil. And analyzing and processing them is what many businesses are built on. Human capital is no longer enough for fast and high-quality development - digital capabilities are needed. A machine knows how to process information quickly, analyze data according to set parameters, and draw some conclusions. Humans will spend a lot of time on this, but artificial intelligence will do it in seconds. Wouldn't you agree that such savings are great?

However, I would not say that AI will completely replace humans. It will become his assistant - definitely yes. Especially in real estate. AI can be used at all stages of real estate construction and operation. It can monitor employees who come to the construction site, make sure everyone is wearing helmets, and recognize certain dangerous situations. And in operations, it can record equipment malfunctions by collecting information from sensors, and in some cases, make a decision to stop the equipment to avoid an accident.

Artificial intelligence also copes well with the sale of objects - both with the search for buyers and with the selection of housing. According to the profile of the client, who applies to the real estate agency, it makes a selection of objects on the basis of past statistics.

If the apartment will look for a young couple, for example, an engineer and a designer, both with higher education, the AI will be guided by the options that were chosen by similar types of buyers. The likelihood that the requests will coincide is extremely high. This means that everyone will be happy - the WIN-WIN principle works.

A big plus of such analytics is that the conclusions made by AI and skillfully generated statistical data better reflect customer needs and make better predictions. But there is a downside - the machine has to be well-trained, and that takes a very long time.

That is, the most important thing is a reliable database of previous purchases, which would clearly reflect the characteristics of the buyer.

Should Realtors be worried? Here we can draw an analogy with cab services. Everyone understands that if AI learns how to drive cars safely, all cab drivers will be out of work. But, as practice shows, this is not a quick process.

And so it is here. Once quality AI is developed, there may indeed be only one service left on the market. But no one knows when that will happen. Besides, even if that happens, people will still be on the plus side - live communication with a realtor will be a sign of luxury. It will work especially well in a combination of live realtor + AI - this format will definitely be in demand in the luxury segments.

Startups have caught the wave

In foreign markets, AI is actively implemented in all areas. And, of course, real estate is one of them. Since 2011, Matterport, a virtual reality company for real estate agents and a spatial data platform, has been operating in the American market. The startup models 3D spaces and develops its own products - cameras, systems for viewing and editing 3D models and other solutions.

The company currently has a library of over 10 billion feet of spatial data and an array of digitized buildings from over 150 countries. In July 2021, the company received $310 million from a merger with Gores Holdings VI and $295 million from other investors.

There's nothing surprising here, though. During the last crisis, the company launched the first application for smartphones, which allowed ordinary users to create digital twins of their properties. Before this developments Matterport actively used real estate agencies - conducted online tours, and at the expense of this raised the percentage of closing deals.

Another similar project was founded in Brazil in 2018 and over time even received the status of a "unicorn". It is called Loft. The company operates on a "one-stop-shop" basis - offering brokerage and insurance services, buying and renovating homes, managing properties, and simplifying the real estate buying process - either evaluating an apartment for listing or buying it itself.

The startup raised $175 million in investment in early 2020 and another $525 million in 2021.

In 2013, the Israeli startup Guesty made an attempt to replace real estate salespeople with artificial intelligence. In fact, it is software for property rental managers. The service helps users to manage properties hosted on various platforms (like Airbnb or Booking). Guesty analyzes information from the sites - finds out what demand for rent is in a particular location, and depending on this adjusts prices.

The project is constantly evolving with new features and solutions. Guesty automates and optimizes all processes related to real estate. In April 2021, the company attracted $50 million in investments and now plans to expand - to enter new markets and build partnerships. Over the past year, rental demand in America has increased 282 percent since 2020. So there are no problems with such stratagems.