Changes in the Real Estate Market
It’s clear that the real estate industry is changing, and real estate technology continues to rapidly evolve, with multiple business sectors looking to proptech for improved efficiencies, operational cost savings, and increased access to information and data. According to a recent survey by the National Association of Realtors (NAR), the vast majority of real estate companies are already using proptech solutions, but many believe the technology to be only a bit less than a decade away from delivering the expected results.
The report reveals that there are over 40 different proptech companies already using proptech services. However, it is expected that a minimum of 35 to 50 more will be created in the coming years as more real estate companies begin to realize how important a good proptech system is to their operation.
Proptech Technology Trends
As the Internet is evolving into a ubiquitous computing environment, emerging technologies such as robotics, artificial intelligence, the blockchain, virtual and augmented reality, and 3D printing and manufacturing will bring us into a new era of connected devices and systems. This year has been a pivotal year for these emerging technologies. Real estate technology is experiencing a period of evolution where emerging innovations will continue to transform the industry. Let’s look at top emerging technologies and their implications on real estate tech.
As these emerging technologies make their way to mainstream devices, robotics is the latest hot topic, and it will only continue to advance. According to the International Federation of Robotics (IFR), it’s estimated that globally, the number of industrial robots will double between 2020 and 2022 and double again by 2030. As more devices, both autonomous and connected, become integrated with these robots, the real estate market will begin to be transformed.
Real estate robots have been used for home security and for automating mundane tasks, such as loading and unloading groceries and furniture. In the future, the real estate market will leverage these advances to streamline tasks, save time, and streamline systems. For example, smart systems could create a robot to load boxes into a truck for delivery. This technology will also save time as there will be fewer drivers on the road. There will also be improvements in quality control and quality inspection. Smart systems could also replace the need for a real estate agent, which could reduce time.
3D Printing and Manufacturing
3D printing has exploded over the past few years and is now integrated into everything from home goods and office supplies to industrial machinery. The technology has revolutionized the manufacturing industry by allowing products to be printed to size directly from a CAD design. Real estate is also evolving as 3D printing is being integrated into real estate transactions. Many major players in the real estate market have already made major investments in 3D printing, such as CBRE, The Mosaic Group, Pinnacle West Capital, and Zillow.
Virtual and Augmented Reality
Virtual and augmented reality have also been making their way into the real estate market as a tool to streamline many key real estate operations. This technology has been especially useful to buyers looking to see the “before” interiors/ exteriors of homes they may be interested in purchasing.
Now, the industry is expanding into augmented reality as it makes its way into both the commercial and residential real estate market. This is especially important for new home builds. Research from Goldman Sachs estimates that the market for virtual reality (VR) in real estate alone could generate as much as $2.6 billion by the end of 2025. This year alone, the research assessed that 130 thousand real estate agents will be using VR to show homes with spending of $5,000 per year, which could grow yearly by 10%.
Clearly, sizeable financial investments are being put into the technologies within real estate. This could be especially important in areas like Las Vegas or New York, where real estate is increasingly being sold with the application of AR-based solutions.
Smart Homes and Other IoT
Smart homes and the Internet of Things technologies will also continue to make their way into real estate, with the connected home being the most important. The connected home is an extension of smart systems. As connected technology gets more integrated into the home, there will be increased use of remote monitoring. This will allow homeowners to easily monitor the condition of a home while they are away.
According to a report from IoT analytics, the market for the Internet of Things is expected to grow 18% to 14.4 billion active connections in 2022. The shift towards this proptech trend will reduce operational costs of real estate companies, improve the quality of life, and provide additional security due to real-time surveillance. What is more, IoT will make property management easier with building maintenance analytics. So the era of smart real estate is approaching.
Blockchain technology is still in the early stages, but it has seen major success in the commercial space. According to Gartner, the business value generated by blockchain will grow rapidly, reaching $176 billion by the end of 2025 and over $3 trillion when 2030 approaches. Blockchain technology is being integrated into everything from the car industry to the health care sector; real estate is also on the list.
The technology is important for real estate since the industry and its key participants are looking for a way to keep data secure and reliable. A distributed ledger allows a group of people to keep a copy of all transactions on a single blockchain, thus, making it impossible to access the data from the outside. When a new transaction is added to the blockchain, the entire group of people who are a part of the blockchain is able to access the information in a secured and reliable manner. As more real estate transactions move online, this technology will allow for more secure transactions.
The global real estate industry is undergoing major disruptive technological shifts. The rapid technological advancement in the field of proptech is leading to an increasing impact on how agents conduct business, how buyers search for a property, and how they interact and do business with their service provider. All of this ends up in an improved customer experience, speed, and productivity. And that’s just the beginning.