Emerging Technology for Realtors in 2022
Whether it’s leads or lists, automation or integration, new technologies always promise to change the way real estate professionals do business.
physical multiple listing service (MLS) to digital, from handwritten to electronic signatures – the practice of real estate is shaped by advances in technology and how society adapts to it.
The real estate industry has already incorporated several generations of technological advancements that are changing the way transactions are processed. Increasingly, real estate agents rely on new technologies to stay competitive.
This need for agents is especially true when it comes to helping young homebuyers such as Millennials. This highly educated and tech-savvy demographic will become a vibrant player in the California real estate market once home prices match their long-awaited incomes around 2025 with the housing market and job recovery. [See RPI e-book Real Estate Economics Factor 15: First time homebuyers]
Baby boomers are retiring and California is shaking
But what emerging technologies are poised to improve agency and homebuyer experiences in 2022 and beyond? To understand, let’s look at where technology and real estate intersect today.
Today’s technology and tomorrow’s innovations
A 2021 survey identified the most valuable technology tools for working real estate agents as follows:
- electronic signatures;
- local MLS apps and technology; and
- Social Media.
In the same survey, agents said they expect the most impactful emerging technologies to affect the real estate profession within two years:
- cyber security;
- virtual reality (VR);
- artificial intelligence (AI); and
- augmented reality (AR).
Drone are used in real estate to take aerial images of a property. This helps listings stand out. They enhance photos and present unique perspectives of the property. However, agents operating drones must hold a remote pilot license by passing a aeronautical knowledge test from a Federal Aviation Administration (FAA) approved test center. Certification must be renewed every two years.
cyber security, the practice of protecting critical systems and sensitive information from digital attacks, is becoming increasingly important as scammers look for new ways to exploit weaknesses in consumer security measures. A cybersecurity system prevents data breaches through encryption data when stored or sent. This way, only appropriate authorized users can access sensitive information.
Drones and cybersecurity are not entirely new, but are becoming commonplace, even necessary, for real estate professionals to remain competitive and secure. Yet it’s the tech alphabet soup of 5G, VR, AI, and AR that’s got tech-savvy agents buzzing.
Realtors take flight with new drone guidelines
5G sets the scene
5G, the fifth generation of cellular technology, offers more bandwidth and faster speeds than today’s 4G standard. 5G also supports connectivity for the Internet of Things (IoT) – thermostats, doorbells, light bulbs, home security systems, self-driving cars and a host of other smart innovations across all industries. To support this growth, 5G networks should serve at least 1.7 billion users worldwide by 2025, as predicted in a GSMA Intelligence report.
the single-family residential (SFR) market is expected to benefit from 5G through its support for:
- smart home technologythat allows greater connectivity for multiple devices;
- remote brokerage officesthanks to faster speeds of transferring documents and programs to the cloud — especially useful for agents managing transactions remotely;
- AI progress this will lead to powerful new tools like AI-generated property reports;
- AR and VR, which requires a fast connection to deliver data-intensive experiences such as immersive digital home tours; and
- greater flexibility work remotely, thanks to the Federal Communications Commission’s (FCC) ongoing efforts to expand US 5G capabilities in rural areas.
5G offers nearly every industry the opportunity to innovate and adapt. The public’s confidence and expectations regarding this technology may soon change their requirements when it comes to buying a house and choosing a real estate agent.
Tech Corner: Virtual reality in the real estate market – fad or future?
Home in the Metaverse
Virtual reality and augmented reality are a revolutionary type of immersive digital technology with monumental implications for the future of real estate. Like the advent of the computer and the smartphone, new technologies have the potential to expand and even create markets.
Virtual reality immerses the viewer in a virtual world using a headset. AR superimposes digital information on the physical world while using a smartphone, tablet or soon digital glasses. Both technologies allow users to experience virtual environments in great detail, giving the user a greater sense of intimacy and familiarity with, for example, a house, without actually going there.
The visceral and emotional reaction to being in a new home can make the details of a sale transaction mere afterthoughts. In fact, emotions are twice as likely to drive buyers to make buying decisions than rational cognition, according to a study by the Journal of Advertising Research. Thus, virtual reality and augmented reality are useful tools to tell a captivating and emotional story to the homebuyer, a story that shows him exactly what he feels enjoy living in their new home.
With the ability to elicit such strong emotions, VR and AR technology is no longer just for video games. These technologies will be worth an estimated $80 billion by 2025, including $2.6 billion from the real estate sector, according to a Goldman Sachs report.
Virtual reality and augmented reality can be used in real estate to help buyers, renters and builders visualize the potential of a home or building, before construction even begins. Through virtual tours and virtual stagingBuyers no longer need to travel to a property’s physical location to get a feel for it, saving them time and better informing their property selection.
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Artificial Intelligence in real estate
AI refers to machines or systems that mimic human intelligence in performing tasks and continually improve based on the data collected. The AI ”learns” and responds to user input.
In real estate, AI can be used to home sales in various ways, including:
- analyze the value similar properties in an area and adjust an offer based on these calculations;
- guide virtual tours; and
- produce an automated real estate reportaccording to Shore Agents.
AI is also an effective way to manage exchanges with customers and other agents. AI realizes virtual communication support through:
- automated responses to queries;
- chatbots or other online help features that generate responses;
- models for offers and other specific responses; and
- confirming the validity data and content submitted by others.
AI also improves organization, making it easier to find and use data and information. A more organized library of forms, documents, contact details, and customer information saves agents time and effort, while reducing manual entry on their part and collecting scattered data.
While the AI can relentlessly handle tedious and repetitive tasks, it’s only as good as its inputs. Zillow Offers, which offers instant deals on homes, lost $420 million over three months in 2021 by relying on flawed algorithms to estimate home values. Thus, the output of AI-based machines is limited by the knowledge, creativity and biases of its designer.
Proptech: the accelerator of change for real estate
Bigger Possibilities, Bigger Expectations
The next wave of technological innovation will introduce new frontiers of exploration and development. It has the potential to radically transform the way we perceive and interact with our neighborhoods.
As a result, homebuyers – especially Millennials and Gen Z – will have new expectations when engaging in various industries. This includes how they expect to buy and sell their homes, view property listings, and find and communicate with agents.
These emerging innovations are all interconnected. The widespread availability of 5G is bolstering developments in VR, AR and AI.
Real estate professionals who see the winds of change coming could better prepare for the future expectations of their clients by familiarizing themselves with this technology now. And that future could arrive sooner than you think.
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Want to know more about the preferences and habits of young buyers and their relationship with the real estate market? Click on the image below to download the RPI book cited in this article.