11 Ways Artificial Intelligence Will Disrupt Real Estate Too
Here are some changes OpenAiRE is anticipating as AI begins to disrupt our industry.
The real estate industry, with its vast data sets and ever-evolving market dynamics, is ripe for disruption by artificial intelligence (AI).
From property valuations to customer service, AI is not just inching its way into real estate; it’s set to upend the status quo, offering transformative solutions that could redefine every aspect of the sector.
This post explores the myriad ways in which AI will alter the landscape of real estate, creating a smarter, more efficient, and highly personalized industry.
1.Predictive Analytics and Property Valuations
AI’s capability to process and analyze large volumes of data is revolutionizing property valuations. Machine learning algorithms can consider hundreds of factors—from market trends to local crime rates—to accurately predict property values and investment potentials. This precision will enable investors to make more informed decisions, reducing risks and maximizing returns.
In the next 5 years, we will begin to rely on AI to generate truer property valuations. In the previous 5 years specifically, it was very common for a homeowner to simply trust the Z-estimate of their home, and oftentimes this number was nowhere near what Real Estate Agents thought they could get for a property. New AI tools to make this data much more accurate, and will rely on many more data points in real time to calculate this number.
2. Virtual Property Showings and Augmented Reality
AI-powered virtual assistants can now conduct property showings remotely, available 24/7, providing a seamless and interactive experience through augmented reality (AR). Prospective buyers can virtually walk through properties from anywhere in the world, making house-hunting more convenient and broader in scope. AI’s integration with AR will also help clients visualize property changes before they are made, allowing for virtual staging and remodeling previews.
Further, new AI tools for adding furniture to unfurnished homes will make the listing photos appear more and more realistic. You can expect an even greater move away from staging a home when new AI tools show homes in a much more realistic manner.
Augmented Reality glasses will allow a buyer to do a physical walk through of an unfurnished home and see all of the possibilities. We can even imagine a day very soon where a prospective buyer can say they want a French interior design, or a very modern design, and the augmented reality can instantly transform and show the potential buyer what the home would look like with their preferred design style.
3. AI in Construction and Development
In the realm of construction, AI algorithms help in optimizing designs, predicting project timelines, and managing resources more effectively. They can anticipate construction delays due to weather, supply chain disruptions, or labor shortages, adjusting project schedules in real time to keep developments on track.
Further, 3D printing of homes, while not technically AI, will continue to heavily rely on data from AI to continue to evolve and learn how to build homes quicker, cheaper and stronger.
4. Smart Contracts and Blockchain
Blockchain technology, coupled with AI, is paving the way for smart contracts in real estate transactions. These self-executing contracts with the terms directly written into code are transparent, traceable, and irreversible. They will minimize the need for intermediaries, reduce fraud, and ensure transactions are completed swiftly and efficiently.
With the guilty charge of Sam Bankman Fried, there is a huge reluctance to anything Cryptocurrency related at the moment. It is very true that a lot of scam artists entered the space, but the underlying technology of blockchain allows for the transparent transfer of assets, and we will continue to see smart contracts made through AI programs, and done so on the blockchain. This is just the beginning, and while there will always be setbacks to any new industry, the faster we can weed out the scam artists, the faster this technology can begin to be useful to a larger swath of customers.
5. Enhanced Customer Service with AI Chatbots
AI chatbots of the past were cumbersome and frustrating to talk to. What happens when these AI chatbots get so good that they are equivalent to a real estate agent? Well, for starters, you’ll be able to chat with an AI bot any time of day, and get the relevant information you need to help make a decision to buy or sell a property.
AI chatbots are further enhancing customer service with every upgrade, by providing immediate responses to queries, property recommendations based on preferences, and assistance throughout the buying process. They learn from each interaction, offering increasingly personalized service that traditional methods can’t match.
6. Market Forecasting
AI systems have the ability to analyze global economic indicators and local market sentiment, providing forecasts with a degree of accuracy previously unseen. This can significantly impact investment strategies, development planning, and portfolio management.
At OpenAiRE, time will tell when we believe these systems can be trusted. A version of this AI system is currently already being used by Blackrock with their program called Aladdin. The sophistication of their AI has led to Blackrock controlling the largest amount of global wealth in the world. We are anticipating that similar AI systems are coming at a greatly reduced cost for more people, which will help to once again democratize real estate investment decisions.
7. Legal and Documentation Automation
AI is streamlining legal processes in real estate by automating the review and generation of legal documents. It can flag potential issues, ensure compliance with local laws, and reduce the time and cost associated with legalities.
Head over to ChatGPT and ask it to create a residential lease in California for your home, and give it any specific requirements you’d like to include. Take the results, and put it up against any residential lease from a lawyer or a real estate agent, and you can quickly see how this technology will upend the legal documentation creation process. Paralegals are the first to go, as these systems can recreate a wide variety of legal documents within seconds.
8. AI for Sustainable Development
By analyzing vast datasets on energy consumption and environmental factors, AI helps design more sustainable and energy-efficient buildings. It assists in creating properties that not only reduce carbon footprints but also offer cost savings to property owners and tenants.
AI will be installed in your future electric car, and will analyze the best time to charge your car overnight to not only save you money, but in time periods when the grid has lower demand. AI will be in your dishwasher, and will choose the best time to run over night, also saving you money.
Home builders will have at their fingertips the findings from AI about new building techniques to make homes more energy efficient, often with simple changes to how a home is built as opposed to expensive solar or battery storage solutions.
9. Automated Property Management
AI is transforming property management by automating routine tasks such as screening tenants, processing payments, and scheduling maintenance. Intelligent systems can also predict when appliances need repairs, reducing downtime and maintenance costs. This shift not only increases operational efficiency but also enhances tenant satisfaction by ensuring their needs are met promptly.
10. Ethical and Privacy Implications
As AI becomes more pervasive, the real estate industry must address the ethical and privacy concerns that accompany it. The potential for biased algorithms and data breaches will necessitate rigorous standards and protocols to ensure AI’s benefits are realized without compromising individual rights.
We need stronger AI regulations around facial recognition for starters within the real estate space. Imagine a future where property managers could use cameras to capture the face of potential renters during the home tour process. From there, they could sign a contract with a company like Clearview AI to deny certain people from renting their spaces because of what the AI models pulls up about the person online, using their face.
Clearview AI settled a court case and part of the settlement was a requirement that they only work with Police Departments, but what is to say that Clearview AI couldn’t start a new company, license the facial information they have, and have this be available to everyone willing to pay a monthly fee.
11. The Workforce of the Future
AI will change the skill sets required in the real estate industry. While some jobs may be automated, new roles will emerge focusing on the oversight and enhancement of AI systems. Real estate professionals will need to adapt, embracing a tech-centric approach to their work.
We believe that AI will not replace anyone reading this article. We believe that an employee that understands and knows how to use AI will replace you. We intend to further expand on these 11 points in detail in the coming months, and would love to hear from you.
Embracing Change for a Smarter Future
AI is in our name: OpenAiRE. We are committed to playing a role in how AI will change the Real Estate landscape, and we believe that our agents and team need to embrace the changes coming our way.
Artificial intelligence is not just a fleeting trend but a fundamental shift in how the real estate industry operates. By embracing AI, stakeholders can unlock unprecedented value, providing services that are faster, more accurate, and tailored to individual needs. The journey ahead will involve challenges, particularly in the realms of ethics and workforce transformation, but the potential for a more insightful and customer-centric industry is immense. As we stand on the brink of this AI-driven revolution, the real estate sector must prepare to reimagine its practices, welcoming the intelligence that machines bring to the complexity of property markets. The buildings of tomorrow will not only be built by AI; they will be sold, managed, and improved by it, marking a new era of intelligent real estate.
Real Estate Agents: You will not be replaced by AI, you will be replaced by another Real Estate Agent who understands how to utilize AI for their clients. Now is the time to invest in your growth by learning about all of the facets of AI.