Over the past couple of decades, technological developments have dramatically transformed all business industries, and the real estate market isn’t any different. After all, in the current fast-paced world, no one has time to opt for traditional methods of home purchasing.
Technological developments have proven to be a game-changer for the real estate market. The USA real estate market was estimated to be worth 35 trillion dollars in 2018. Home-buying has not only been made easy, swift, and accessible from the comfort of your home, but there's also a boost in business during the off-seasons, with homes being on sale and purchased at a faster rate than imagined.
If you’re curious to know more, here are the technological trends that have changed the real estate industry.
What is Real Estate Tech?
By nature, the real estate industry is heavily reliant on data. But what kept the industry behind others, is that the data wasn't available to the public. This made it difficult for anyone to break into the real estate market and buy or sell properties easily.
In the real estate industry, technological evolution began when database management systems and computers were introduced and adopted by businesses.
With the introduction of computers in the business during the middle of the 1980s, there was an alternate investment in the real estate industry. This led to the easy accessibility of data to the masses. This quickly became a game-changer for ordinary people looking to invest in the real estate market.
Thus began the start of Proptech.
What is Proptech?
Simply put, proptech means property technology. This means that property technology makes selling, buying, renting, and managing properties a lot easier with the help of technological advancements.
Proptech could virtually be anything like AI that helps with machine learning software to assess and help conduct business through automation. Or even software like portals for property listings and hardware such as sensors.
Proptech has essentially and effectively brought the real estate market into the palm of anyone’s hands and made it more easily accessible to Realtors and ordinary people. It has also helped the real estate business boom during the pandemic. Technology like online listing, communication, chatbots, automation, and virtual reality house tours helped businesses streamline operations and work even amidst the pandemic.
Proptech companies began springing up everywhere. Though they were more popular in the early 2010s, the number of unique investments has constantly been on the rise.
Why Did the Technological Evolution in the Real Estate Industry Boost Recently?
Technological developments have been quickly adopted by most real estate businesses due to the advent, rise, and common use of the internet among people.
The millennial population, which has now become the new wave of home buyers’ demographic, can be credited for the change. Millennials are now representing the biggest portion of home buyers since 2018. Though millennials were late in buying homes, they have made waves in how the real estate market worked.
Of course, to tap into the market, Realtors had to change their strategies too.
According to the real estate trends report of 2018 that talked about the global-emerging trends in the industry, the shift has been massive. It described how in 1981, a good majority (around 22 percent) of homebuyers searched for possible properties for sale in the newspaper. By 2018, more than 44 percent of people were going online to find an online property listing.
Anyone looking for properties online would use a phone to access listings. This means that websites that are optimized for smaller screens have become more common and are ranking higher. According to the same report, around 58 percent of millennials found the home they wanted to buy online. The number went up steadily, with 46 percent of generation Y finding their home on mobile devices. And only 33 percent of young boomers consulted their phones to find their homes. This makes around 76% of all homebuyers who had found the home they wanted to live in on their phones.
The number of people with access to technology is only going to rise, with the next generation, younger millennials, and generation Z mostly dependent on their mobile devices.
Another factor that affirms this is the continuous growth in proptech from VR headsets and robots that allow buyers to conduct home tours from the comfort of their homes. This also includes viewing online listings and easy-to-use home selling portals on the internet. The pandemic has also added a great incentive to rely on technology for real estate transactions to minimize physical contact.
So, what are these technological advancements that have altered the real estate industry as we know it? Without a moment more to waste, let’s dive in and find out more!
To sell a home, you have to market it and publicize the property first. Before technological advancements, the only way to sell or buy a home was through the newspaper. This old-fashioned technique was extremely limiting and a tiring way to see less than half of the options that were available. Because of how taxing the process was, people would only have the energy to go through newspaper listings during the summer months or over the weekends. Moreover, it was also annoying for sellers who could only market their property once a week.
With extensive online listings, buyers now have an array of properties to pick from on a reliable and accessible platform. It’s also made searching for homes easier with the built-in filters that could help select prices, location, etc. This means that buyers don’t have to settle on what works anymore and buy their dream homes easily and quickly.
Online listings have made it easier for sellers to access a larger number of buyers and attracts them. By enabling online listings, transactions and communication happen quickly between sellers and buyers. The sellers can market their property online without any hassle and can even modify data later as they please. The swiftness of online listings ensures that negotiations and transactions are swift and smooth.
When it comes to virtual reality, many people connect it to just gaming. But it’s become a lot more than that over the past few years! Virtual reality has a lot of practical qualities that are extremely beneficial for a number of industries.
This relatively new technology enables businesses to offer their customers a brief look into their services. The addition of virtual reality has been a total game-changer for the real estate market as well.
The investments into proptech were estimated to be about 23.75 billion US dollars in 2021. This meant new tools for Realtors to help conduct virtual home tours and minimize physical contact while making it a lot more feasible for buyers and sellers alike.
Video tours help save time for buyers, sellers, and Realtors. The buyers can walk through a home on their phones and see if it's up to their standards, all from the comfort of their own home. The Realtors don’t have to meet every person who has contacted them after adding a new property to a listing. Video tours also cut massively into costs of gas spent reaching the location and visiting various properties. Now, buyers can browse through an extensive listing at the touch of a button.
And if that isn't enough, this cutting-edge technology helps real estate websites get more traffic. And this, in turn, reduces their bounce rate.
Machine learning is a new state-of-the-art technology that has already changed businesses. It’s proven to be a holy grail for businesses, and real estate is no exception.
AI-enabled apps and machine learning interfaces help Realtors gather customer data which helps them improve their marketing and lead generation strategies. They can help file and lodge client data, analyze, sort, and show homes that are of specific criteria to clients by assessing their needs and creating targeted ads.
Thanks to these technological developments, chatbots can help businesses give leads personalized information about price range and location. This also helps buyers and sellers as they don't have to wait and move on when a Realtor isn't available.
AI also has the incredible ability to analyze patterns in large amounts of data, which helps Realtors predict property market values.
Moreover, real estate AI solutions can make transactions and the process of buying and selling homes much easier. This includes robots that give immersive virtual house tours to interested buyers, streamline processes through automation, and use predictive analysis to find leads through large amounts of data.
Thanks to AI, brokers don’t have to rely on factors relating to a neighborhood when estimating prices. AI and mathematical modeling help them estimate prices more efficiently and accurately than before.
Finding leads can be difficult but managing and keeping up with leads isn’t only daunting but an almost-impossible task at times. It’s probably the most necessary technological advancement for the real estate industry. A good majority of the decisions made in the real estate market are based on data or are somehow data-driven.
Data analytics has helped the industry adapt and move ahead of traditional and archaic methods of conducting real estate transactions.
This helps real estate agencies and Realtors get insights into their business and help them understand the buyers and sellers. In turn, this helps them alter and develop their services to better suit their clients' needs and help provide them with tailored solutions that suit them. It also helps them mitigate any risks with the help of forecast, effectively helping them make profitable decisions.
Moreover, data analytics helps Realtors use these data insights to come up with better marketing strategies. This helps them improve customer service, reach, and ensure proper engagement with the clients. And if that isn’t enough, it also stops any market-related risks that would be taken due to data assessing situations.
Mobile Optimized Websites
It’s no secret that people use their phones more often than they use computers or laptops. This is why websites optimized for phones and tablets have made real estate, listings, and communication with sellers easily accessible for most buyers.
Thanks to notification settings, buyers can also instantly be notified if there's a new home put up on listings matching their criteria. Moreover, sellers can be notified on the go whenever a buyer is interested in their property. This helps both parties move ahead without worrying about missing anything.
Selling and buying houses can be difficult sometimes. However, technologies like online real-time listings and virtual house tours can streamline the process and make it much easier for all the parties involved. Moreover, working with quality Realtors can ease the hassle and make buying or selling a home a stress-free process.
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