In the wake of rapidly evolving technologies, many industries are at risk. Carl Frey and Michael Osborn, two researchers from the University of Oxford, have published a paper about the future of employment that states with 97 percent certainty that real estate brokers will vanish during the next decades.
As a researcher and founder of the Future Real Estate Institute, I think this is pretty unlikely, since the real estate transaction process is very emotional and buyers and sellers still crave human interaction. However, I do believe the industry will be cleansed of many competitors that don’t believe in technological innovation. Based on the fact that you are reading this article, I’m willing to guess you don’t belong to this group.
Historically, real estate brokers and creative entrepreneurs in related fields have been at the forefront of real estate innovation, while many large corporate players in the commercial sphere have lagged behind. In fact, the combined impact of social media, mobile applications, and digitalization on the industry is nothing compared to the potential disruptions of today.
Disruptive Technologies of Our Age
Artificial intelligence, sensors, synthetic biology, and robotics are all major sources of disruption in our age. These innovations are bringing us technologies like the Internet of Things, smart applications, blockchain databases that make digital economies and “cryptocurrencies” such as Bitcoin possible, and much more that will impact how we research, work, and live.
Adaptive and creative real estate brokerages don’t have to invent a new disruption in order to remain relevant; they just need to make use of them. Apple didn’t invent the smartphone and Amazon didn’t invent the internet; they just created a disruptive business case on top of those existing innovations.
In the first article of this series, I wanted to show you how you can profit from the more basic innovations, such as big data, drones, and augmented and virtual reality.
Real Estate Open Data
According to IBM, we produce 2.5 quintillion bytes of data every day, which means 90 percent of the entire global stock of data has been produced during the last two years. Perhaps more exciting than the quantity is the fact that much of this data is open source and available to anyone.
To capitalize on this, agents and brokers should form data alliances, preferably under the supervision of the National Association of REALTORS® and other trusted industry partners. Though it’s not an NAR initiative, Project Upstream is a great early example of a platform that could one day automatically sync a wealth of data beyond the listing (among them: macroeconomic, social, and environmental, along with tracking consumer and business sentiment). And MLS platforms with enhanced data aggregation and usability could fulfill the same purpose on a regional or state level.
The challenge is to aggregate adequate data points, store them in a distributed and resilient network, construct user-friendly interfaces, and create precoded analytical models to draw reasonable inferences from the data using standard queries.
Another way the industry can profit from the data is by reducing market research and marketing costs, increasing the efficiency of personalized targeting and making trend forecasts on a regional as well as national level. We might see new real estate data brokerages, specializing in marketing and big data in a software-as-a-service (SaaS) package, as well as new jobs opening up for real estate data scientists.
In order to stay on top of this trend, solo entrepreneurs and small brokerages should be especially focused on forming strategic alliances to share the costs for big data workshops and seminars. Larger players should hire CTOs and data scientists to help foster open innovation with cross-functional teams.
Video Marketing & Image Database
Drones, actually belonging to the innovation category of robotics, are a great tool for video marketing, providing high-resolution images of properties and their surroundings.
On the individual level, this is a rather simple example of technological innovation that can be used without a very steep investment. But an exciting new business case could be the creation of a free stock aerial image and video platform, accessible to members of the National Association of REALTORS®, which could have greater use cases as artificial intelligence programs learn to label and analyze imagery and video data.
Augmented reality is one of those buzzwords that didn’t mean much to most, yet with the success of the mobile app Pokémon Go, we have seen how the combination of offline and online worlds can transform everything. Agents can profit from this technology by providing augmented reality services during open houses.
By creating an app that can be downloaded during or before an open house, brokers can include digital maps of the listing’s surroundings. Data could consist of detailed geo-information regarding schools, doctors’ offices, hospitals, supermarkets, and restaurants, along with weather information, macroeconomic data for the region, and much more. In-depth information about the house itself could also be displayed, such as floor plans, building materials, and HVAC systems.
Potential buyers could obtain the information via their smartphone, tablet, or other device linked to natural language processing software. Potential buyers could then walk through a property and use the system to get more detailed descriptions. This could make open houses more private and intimate. The data dissemination could be triggered by beacons, near-field communication, Bluetooth, or Wi-Fi.
Reality — One Step Further
Real estate professionals who want to take it beyond augmentation can do so by using virtual reality. It can be used for virtual staging or to add value for buyers if they can design the interior as well as exterior of the property. This technology could be integrated with the 3D Home Designer package for AutoDesk’s Homestyler or other alternatives, or associations might consider creating a SaaS tool for members.
One further advantage would be the offering of remote open houses, which could accelerate transactions and enhance services for those who cannot visit listings in person. The agent could accompany the VR tour through the property within the VR session or via the internet or phone. Potential buyers from other states or countries could thus assess a property before they come or even buy it based on a VR tour.
If you really want to get your head around these and other technologies, I suggest taking advantage of free courses on Coursera, EdX, or Future Learn. In the next article in this series, I will show you how you can profit from applications that use artificial intelligence and machine learning. Furthermore, I’ll elaborate on the advantages of the blockchain technology that is behind cryptocurrencies and a few other areas where your business can benefit from disruption.