The real estate sector trails behind other industries in its digitalization and adoption of new technologies, with only 53 percent making tech investments. The number highlights an opportunity for professionals in the industry. Rather than seeing it as a setback, it can serve as a realization.
Real estate businesses should explore these technological advancements to stay competitive. This article presents six tech real estate trends in 2024.
What Is Proptech?
If you’re in real estate, you’ve probably heard of Proptech. It’s a combination of the words property and technology. But what exactly is it?
It’s a broad term encompassing different types of tech that are revolutionizing how businesses operate in the property market.
It includes the technologies we’ll cover in this article, such as VR, AI, and blockchain. So, whenever we refer to one of the items as Proptech, you’ll know what we mean.
1. Virtual Reality
Virtual Reality (VR) is a popular form of Proptech. Real estate companies use it to offer immersive property experiences. It allows people to virtually explore properties, walk through spaces, and visualize layouts without being physically present. It provides an engaging and realistic perspective for stakeholders involved in a real estate transaction.
It has many applications within the real estate industry, including:
- Virtual tours: VR saves realtors and potential buyers time by enabling virtual property tours. These tours are immersive and realistic and remove the need for physical visits.
- Virtual staging: Property owners and managers use VR to stage vacant properties. The technology helps them find interested buyers faster than using traditional staging methods.
- Architectural visualization: Developers and architects use VR to build virtual models of properties. Stakeholders can then review plans and interact with the designs before construction begins.
2. Blockchain
If you’ve heard of blockchain technology, you’ve probably heard it in relation to crypto. However, it has many uses and is currently gaining widespread adoption in the real estate industry.
Before we get into the ways it’s impacting the industry, let’s quickly cover what blockchain technology is.
Blockchain is a digital ledger that’s highly secure and decentralized. It records transactions in a way that prevents them from being tampered with and reduces the risk of fraud. Each transaction is a block that, when added, connects to the previous block, thereby forming a chain. This creates a transparent and unchangeable history of transactions.
There are two main ways the real estate sector is using this technology:
- Tokenization: This is where a digital token on a blockchain represents properties. This makes real estate investments more efficient and transparent. It also reduces costs, streamlines transactions, and enhances liquidity while enabling fractional ownership.
- Smart Contracting: This refers to the use of self-executing contracts that contain predefined conditions and rules written into code. When specific conditions are met, the contracts automatically enforce, executing the terms of the agreement. Smart contracts use blockchain technology to record contractual terms and the details of the relevant properties.
3. Machine Learning
Machine Learning (ML) works alongside big data and statistical models to evaluate the values of properties. ML algorithms are able to use data and trends in the property market to effectively predict how much a property is worth before it goes on the market.
They do this by analyzing thousands of data points from many sources, which leads to a more data-driven and comprehensive property value prediction than a human could achieve.
Several different machine learning models exist, such as decision trees, linear regression, support vector machines, and neural networks.
ML algorithms can also work out how much commission realtors can expect to earn after closing a property deal. It can help realtors make informed decisions and better understand the financial aspect of each real property transaction.
4. Fractional Property Investment
Fractional property investment refers to investing in a property in return for a percentage of ownership. For example, you might invest $50,000 for 15 percent ownership of a house.
This type of investment is possible with the help of blockchain technology.
How so?
When selling a property, the seller can break the asset into several pieces, with digital tokens on a blockchain network representing each piece. Investors can buy one or more of these tokens. It allows them to own part of the property instead of having to purchase it in its entirety, which provides an affordable way into the property market.
5. Drones
Property managers and owners use drones to capture high-quality aerial images of their properties. The result gives potential buyers a new perspective they wouldn’t get from simply visiting the property.
Drones also can record high-resolution video footage of properties. These videos can help market the property better. It is an effective strategy for grabbing attention online and fully demonstrating the size of the home and its land. Additionally, people can post these videos on social media to draw attention to the property.
6. Conversational AI
One of the biggest money drains for realtors is staffing their customer service lines. It’s necessary since it helps bring and retain clients.
For instance, someone is looking to refinance house loans or plans to sell their property. They might call the real estate firm for guidance. In most cases, potential and existing clients expect the response times to be instant. However, operating a 24/7 human customer service line can be expensive.
That’s why many real estate businesses are leveraging conversational artificial intelligence (AI) technologies. They use chatbots that can respond to customers instantly. They also use it to automate service desks for call routing and handle common customer service calls.
Final Thoughts
Technology is transforming how the real estate industry functions, and it will only escalate in 2024. Today, adapting to these technological advancements is not an option but a necessity. If you want to position yourself at the forefront of the market, you must embrace change and be open to innovative technological solutions. It will not only help you stay competitive, but it will also help you streamline operations, making your work easier.
