Real Estate has been the most attractive business, ever since technology became of the part of it. Technology has made this sector lucrative, yet the most competitive one. You need to keep a constant watch on the evolution of technology and also make sure that you are prepared in advance to adopt the technology trends. Technology will have a massive impact on the Real Estate sector in the coming years and advancement in technology seems to continue rapidly. In such a situation, one needs to explore the list of technology which will have a significant impact on the sector.
Technology is all about keeping businesses guess “what next”, but such transformation does occur overnight. As far as predictions are concerns, the expert provides technology prediction based on the mode of people and the technologies and set of software that ruled the roost throughout the year 2019.
The article will provide how the Real Estate technology prediction 2020 will help you plan for your business in advance.
Loopholes in Traditional Real Estate Business
Even though the real estate business has been the most lucrative, the traditional real estate goes through plenty of pain points which causes some serious issues for buyers and sellers. Thankfully, these issues have been appropriately addressed ever since the technology was introduced in the industry. Here is a list of problems which traditional business was suffering from.
Transparency has been the primary concern for the traditional real estate sector while modern real estate with the right use of technology has successfully eliminated the issue. Clarity brings trusts, and that is missing in the legacy real estate business. The intermediary has been the main reason why even buyers are not able to maintain transparency. Your intermediaries will restrict real estate to pass information uninterruptedly.
Transparency causes corruption and demolishes the fair market structure. And according to the UN statement, between $800 billion and $2 trillion US dollars, which is equivalent to between 2 and 5% of global GDP is laundered each worldwide. That’s a considerable sum of money!
2. Not Open to All
Real Estate is not for a startup. Is it so? Many would say, yes. I also say, yes, keeping the traditional real estate in mind. Traditional real estate business not only required to have a massive investment, but the industry also needs to tackle plenty of other challenges which I think not possible for most enthusiasts. Even today, it requires investment, but many other things have cut short of making everyone take the opportunity.
No one likes to pay even a single penny for no work. But, in Real Estate, buyer and seller both have to pay a decided amount to the middleman. 2.5% of the total house money is a considerably significant amount. What if such an amount is saved? A real estate owner can give a handsome discount to buyers. But, it will be possible when both partners (buyer and seller) get rid of intermediaries.
Converting investment into cash is a big issue. It takes a month or two or even six months to make a deal. The flow of money is not as smooth as it should be and therefore causes an issue for contractors and sellers. Again, the middleman is the main reason behind delayed liquidity.
5. Fraud in Real Estate
In traditional real estate, fraud has been one of the significant concerns that modern real estate has considerably sorted out. The real estate agreement in paper form is the main reason. This should be eliminated through a smart contract system.
For all problems, technology is the only solution. The digital innovation will keep the industry transparent, and help buyers and sellers confidently make a deal, removing the need for a middleman. Technology will allow partners to have direct communication while things will be transparent so that buyers would take a faster decision.
Real Estate Stats (USA)
- The USA Real Estate sector witnessed $165bn revenue in 2019
- 4.8% has been the growth rate prediction. Source – ibisworld
- The Home Price in the US is up by 6.9% Y-O-Y with $312,500 maiden sale price
- The number of home sold in 2019 is up by +13.0%, though it is 14.9% down in terms of the number of house sales fell. Source- Redfin
The Tech Trends 2020 that Real Estate Business should prepare for
Technology will have a more significant role in reshaping the financial ecosystem of the entire real estate sector. The PwC Global Real Estate Leadership Team, in its report, says that the global stock of institutional-grade real estate will grow to US$45.3 trillion in 2020 from US$29.0 trillion in 2012 which is over 55% rise from 2012. Let’s take a look at the top trends, which will be followed throughout the year 2020.
1. Artificial Intelligence
Artificial Intelligence (AI) is the most crucial technology innovation, having all potentials to revolutionize the real estate sector. The AI-powered software solutions will help your industries simplify complex processes and speed up workflows. AI has the possibilities to enhance the work step efficiency of the real estate players, including buyers, agents, brokers, asset managers, etc.
Apart from all these, AI will not only increase the importance of technical solutions but also automate facility management -real estate management. Currently, AI is being used by the real estate sector to collect and analyze documents. At the same time, it also helps to provide real-time translations for businesses when it comes to international transactions. In short, the utilization of the real estate industry will enhance workflows and speed up operational tasks. Last but not the least, it helps buyers and sellers make smart decision-making processes.
Use cases: AI in Real Estate
Here’s a video prepared by Jamie Johnston, explaining the importance of AI in the Realspace industry. He is giving AI importance over a human resource when it comes to estimating values.
Let’s take a watch in this video and analyze how AI functions in the real estate section.
2. New Platforms
You may have witnessed how Facebook as a real estate-focused platform helping industry players to connect. Brokers, and landwards to connect with potentials tenants. Even it is allowing the partners to chat, share files, track transactions and much more in real-time. All I am trying to say that, commercial real estate transaction is, sometimes, hard to manage. It may be due to some complexity a broker has to tackle multiple purchases at the same time. To fill this gap, many new platforms will be introduced in the real estate sector while the existing one will come uploaded with more modern and enhanced features.
AR and VR stand for Augmented Reality, and Virtual Reality and the technology has already revolutionized the industry for a couple of years. It has many and huge potentials in this sector. Right from property management, smart home to customer management, AR can make everything easy and convincing. The technology provides an opportunity for real estate owners to help buyers take a virtual tour to the building, even it is not completed. For example, when a buyer approaches a real estate owner for property inquiry, the owner, can present him with a virtual device, loaded with AR-inspired content. Now, the customer can take a virtual tour of the home. For example,
- Customers visit every section and corner of the home
- Open the drawers, bathroom gate with a hand gesture
- Take a look at the kitchen, how it will look and design
- Inspect surroundings, such as nearby stores, schools, colleges, laundry, park, etc.
4. Drone Utilization
The Drone has been the most potent instrument for the real estate sector. With the help of a drone, real estate owners can take very vibrant images for listing. Buyers can inspect every detail of the home with the help of a drone. Real Estate owners can not only show the whole building or property through single images but also can help buyers explore the surroundings. Aero’s perspective is essential as it helps to take footage and pictures from more challenging locations and even comfortably help photographers take photographs from multiple angles. More than that, the aero perspective is important for buyers to inspect is the house for sale has any damages like terrace damages and others. It can help take pre-inspection more precisely.
In 2019, it was the most favored instrument. It disrupted the traditional way of managing customers and showcasing properties. Even coming year, such as 2020 is going to be the most significant one.
Use Case: Using Drones in Real Estate
Here in this video, Steve McIrvin of Autel Robotics discusses Drone and its importance in the real estate. You will get a glimpse of Drone, how it helps sellers to convince buyers easily. You can also watch through similar videos online and explore how the Drone works in real estate.
5. Internet of Things (IoT)
IoT has been the most significant part of real estate for some time now. It helps in making home smarter and also helps realtors reduce cost on management, energy, and others. If you look at its uses in real estate, you will find many examples showing the use and need of IoT (Internet of Things) in the real estate sector.
IoT stands for a smart sensor device that connects the physical world to the internet. Now, the sensor will make monitoring of equipment and home more energy-efficient and turn everything based on the homeowner schedule.
It will give complete control over lighting, electricity, water, appliances and other physical products to the owner. Not only that, but it will also play a very significant role in taking predictive maintenance. For example, an IoT sensor connected to the appliances, such as AC, refrigerator, etc. will alert a manager if it senses any vulnerability.
Being a real estate owner, IoT can help you buyers make an informed decision. For example, the buyers get in-depth insight related to the property, such as a report card of property, provided by the realtors to the prospective buyers.
More than that, the use of beacon technology is very much in use in the real estate segment. Beacon can deliver all the critical and essential detail such as price, images, 3D or 360-degree virtual tours to the Smartphone of the potential buyers. It does not require any physical presence of the agent to show the property.
Use Case: IoT in Real Estate
Here’s an example of Beacon technology prepared by BeaconSage how it helps the customers get instant messages containing information, offers and more.
Technology keeps changing, innovating and coming up with more refined and updated features and uses. You never know today’s trending technology would be outdated tomorrow, and this is what innovation is all about. However, what ruled throughout the years will keep on ruling the roost for years. So, the prediction is based on what made the previous year great for real estate in terms of technology.
All five technology predictions are based on the services they provided previously in the real estate segment. They are very much sufficient can make you competitive in the coming again.
- Top 5 Technology Trend that will Reshape Real Estate Industry in 2020 - February 7, 2020