Machine Learning is Crunching the Enormous Amount of Data Produced by the Real Estate Industry

How AI is transforming the Real Estate Industry

The big picture

• The Real Estate industry is ripe for disruption
• The Real Estate business is being digitized and the industry is extremely conservative

• The industry is excessively manual, according to a study from AppFolio and John Burns, the lack of automation is slowing the growth of 35.1% of property management businesses.
• Too much time is spent with pen, paper, and spreadsheets instead of letting modern technology take the load off, employees.
• Every aspect of Real Estate is impacted — Think: Rent payments, home valuations, document signing, document management, building efficiency, security, customer experience, infrastructure management, space setup, operations management, and occupier interactions
• Solutions to improve virtual staging in 3D including the ability to add, move and order your own furniture in the space
• Solutions to search by tile color, house features, real sunlight exposure,
• Solutions to completely automate and digitize the home tour process, with alerts, notes, messages, pictures between the seller, the agents
• Solutions to transfer funds from the buyer to the escrow account and then to the buyer, avoiding, checks, frauds, manual processes

Be smart

• AI technology can be applied to an immense number of Real Estate challenges
• Building management means millions of connected devices that produce data, data can be monitored
• Applications are coming in security and building surveillance like Indoor Patrolling Robot. Equipped with AI and environment sensors to keep your property, employees and, customers safe.
• Autonomous security robots are automated security & surveillance robots that combine and develop a multitude of different technologies to perform security & surveillance operations such as reporting, monitoring, investigating, and intruder detection.
• Autonomous robots are perfect for navigation of vast and wide operations, they never get tired, they never get lost, they cover more ground
• Coupled with Image recognition and AI they can classify intrusions and report alerts while avoiding false positive or constant camera monitoring
• Real estate developers are looking for services platforms that can seamlessly mix people, space, and technology
• By offering a tailored and digital customer journey Real Estate professionals stay abreast of consumers expectations
• Foxy AI, a virtual property valuation tool, has launched Remodel It, which can offer instant ballpark estimates on remodeling projects as home shoppers browse for homes online. Homebuyers can receive estimates for repairs or remodeling as they consider homes for sale to help them make more informed purchase decisions

Why it matters

• Real Estate is everywhere and connected to every aspect of our lives
• AI can application can have an impact on our health with efficient building managing their C02 emissions
• Integration with insurance can make our lives easier
• A better and fairer process in lending, attribution, seller choice can induce societal changes
• Developers, agents, and fintech companies currently multiply partnerships and joint ventures
• Acquisitions will follow

Yes but

• The Real Estate industry is not ready

• Its conservative, it’s manual, decisions are still gut and instinct-based, and digital transformation is a long road ahead

• Source: Appfolio

What’s next

• Intelligent concierge applications that can recognize you, your family, and your dependents
• Intelligent home functions that will adapt lights, heat, and communications with service providers based on your lifestyle and data from your phone, car, watch, clothes
• Intelligent home security that links your mailbox to your amazon and other e-commerce accounts, on scanning of your package bar code, the mailbox or the building door open for the delivery

By the numbers

• In KPMG’s 2019 survey of global real estate companies, only 25% of respondents said they have a well-established data strategy, and one-third said they have no data strategy at all.
• In March 2020, real estate brokerage company Redfin said requests for video-based home tours had increased 494%in just one week.
• Zillow reported a 533% increase in 3D home tour creations between February and March 2020

What people say

• “Chatbots and voice assistants are extremely popular right now as they allow real estate professionals to provide around-the-clock support that doesn’t require a human,” said Vin Vomero, CEO of Foxy AI.
• “Some companies avoid using A.I. because of the perceived costs and resources required to use it, a lack of trust in A.I. products, the difficulty in explaining what it does behind the scenes and a fear of an A.I. takeover related to job displacement,” said Julianne Heller, data scientist at NAR.
• “Our model helps us create an accurate view of our customer’s current home, such that we can enable the customer to unlock equity from that home to use towards their next one,” Orchard’s CEO and Founder Court Cunningham

What I think

• Real Estate players will evolve with technology
• Covid accelerated the path to fully digital transformation
• Acquisitions will multiply
• The future of Real Estate is in technology
• Real Estate creates an immense amount of data
• Being able to successfully leverage that data is the future key to success
• Companies that are smart enough to go through the pain of AI projects implementation will win in the market

Go deeper

• BrainBox AI and WattTime Announce Partnership to Significantly Reduce CO2 Emissions Produced by Commercial Real Estate Properties — Utilizing artificial intelligence and sophisticated grid emissions intensity data, this collaboration is set to reduce the carbon footprint of buildings by 20 to 50+ percent
• “Foxy AI’s ‘Remodel It’ uses computer vision to help consumers get instant and customizable home renovation estimates by analyzing the photos on listing websites by ZIP code.
• Chime Technologies, an award-winning operating system for the real estate industry, announced that 60% of its customers, including thousands of top-performing real estate agents, rely on AI Assistant, the bot helps attract more leads, nurture prospects, and convert clients. Chime’s chatbot, is powered by Google’s machine learning and natural language processing technologies,
• First was acquired by RE/max uses artificial and predictive intelligence to determine when and why people will buy or sell a house. The goal is to help agents prioritize their existing contact list with First’s app delving into an agent’s contact list to highlight potential deals. The company say it tracks more than 700 different signals across the country to make its predictions
• Reonomy shared how her firm is using AI to serve up property intelligence on commercial properties nationwide. The company has crunched an enormous amount of commercial data — covering 52 million properties, 100 million companies, 30 million personal profiles, and 53 million tenants — that can be searched in multiple ways to reveal a property, company, or personal view of ownership nationwide.
• HouseCanary’s AI-powered AVM can estimate a home’s value in the present and forecast how it will fluctuate for the next three years. The algorithms, which draw on 40 years of housing sales data from across the country, offer estimates that incorporate specific selling points like back porch views and make forecasts that account for peaks and valleys in the housing market.
• Hosta is a solution to assess spaces. It leverages A.I. to detect materials, respective surface areas, and architectural and spatial data from just a simple picture.

This post is part of Convergences by Melvine. A series exploring how software is changing every corner of human activities. Melvine Manchau