The long-awaited change in real estate has finally happened: this highly regulated brick-and-mortar industry is welcoming disruptive real estate technology, like Artificial Intelligence (AI), Big Data, Virtual Reality (VR), Internet of Things (IoT), to name a few.
While feared by some, these real estate technology trends bring an array of opportunities for real estate agents and customers alike, from immersive “wayfinding” to help people navigate their physical space to automated rental and purchasing property platforms. And those who don’t catch up with incredibly dynamic property technology, unfortunately, risk being left behind.
As a seasoned technology real estate expert with a 16-year-long history in the industry, we have been at the forefront of real estate innovation and are here to share our predictions on the real estate technology trends that are going to stay with us in the years ahead.
Real Estate Industry Overview & Predictions
Real estate today
With almost USD 9 trillion in global assets, commercial real estate is the largest industry in the world. Add to that the residential real estate market, which has much greater value, and you are talking about the world’s biggest asset class that over the years created much wealth and investment opportunities. In 2018, investment in real estate peaked at €311 billion, according to CBRE.
The value of the real estate market in years to come
According to the Business Research Company, the real estate industry will reach a value of nearly $7227.13 billion by the end of 2022 (source). In the US alone, real estate takes up around 13% of the country’s annual GDP and is the fastest-growing sector of the economy (source).
A warning concern that looms over real estate
Starting from 2019, the real estate economy has been pulled in all directions by inflation, skyrocketing gas prices, and Covid-19, to name a few. And although deal-making rebounded sharply in 2021, reaching a compound annual growth rate (CAGR) of 3.2%, real estate lags behind other industries in terms of efficiency and transparency of financing and operating.
These problems are being addressed by the growing number of AI real estate companies and other innovators collectively known as proptech or real estate technology. As Brendan Wallace well noted, proptech trends are going to consume more and more total enterprise value year after year in the next few decades, edging out traditional real estate companies (source).
What is real estate technology?
Real estate technology refers to proptech software, tools, apps, and other kinds of technology for real estate agents, customers, architects, and property managers that improve efficiency and facilitate real estate activities, from buying, selling, renting (Rightmove & Airbnb), and managing to marketing and investing (OpenSignal).
Which technology real estate startups will receive more funding?
AI analytics and data aggregation will be increasingly popular with real estate technology startups; thus, AI real estate companies will likely receive more funding. Commercial lending and financial platforms will also offer a ripe prospect for tech real estate startups.
An example feature is bundling and aggregating rental contracts to offer tenants the opportunity to leave their agreement before the contract expires by matching them with new applicants.
Real Estate Technology Trends That Disrupt the Industry
With over 9,000 proptech startups in the world to date (source), new real estate technology trends like AI, drones, IoT, and Virtual Reality are reshaping the real estate landscape. And for a good reason.
Today, the value of the property is not defined solely by the space and its location but by the blend of real estate information technology and superior tenant / buyer experience, says Deloitte (source).
And if before the pandemic, it was still possible to maintain the status quo with close-to-zero technology and bricks-and-mortar customer service despite the ongoing digitalization of other industries like finance or insurance, these days, however, the luxury of lagging behind real estate innovation is about to disappear.
Those who see the inevitability of change are already taking action toward automation and better digital experiences: real estate has witnessed a 10.3% increase in tech budgets across the industry (source).
Real estate firms split their investments between the following real estate technology trends: cloud computing, blockchain, process automation, AI, and data analytics, according to Deloitte (source).
McKinsey also mentions such proptech trends as the increased demand for enhanced construction technologies (smart buildings / IoT and low-emission construction), drones, and integrated platforms that enable visibility into the management of business or operations processes from a single place, like Customer Relationship Management systems, or CRM for short (see in the section about technology for real estate agents).
To get a panoramic view of real estate tech trends and what dividends those can bring to industry professionals, let’s take a closer look into each of these real estate innovations.
Cloud Computing and Storage
According to the above-mentioned Deloitte research, migrating to the cloud is the top real estate technology trend implemented by 36% of real estate respondents across the globe.
The whole idea behind the cloud is to let companies store their data, say client or property details, online without having to manage onsite data centers or organize paperwork. This means you no longer need to worry about data security and accessibility, system maintenance, and room for document storage.
For real estate agents / dealers / brokers migration to the cloud mainly comes in the form of subscription-based applications like property management CRMs, transportation management software, or simply cloud data storage.
And although cloud computing has been around for at least a decade, widely adopted in other industries (just think of fintech), it took it a while to find its way into real estate, which so far has been known as an offline first industry. Among the most important benefits of cloud computing for real estate are:
Flexibility
As all data resides in the cloud, real estate professionals can access information from anywhere. That makes them more productive, collaborative, and satisfied in their jobs.Scalability
Depending on how fast your real estate business grows, cloud-based platforms can scale up or down respectively. You don’t need to set up anything from scratch – just choose a more suitable subscription plan.Security
Since all the data resides in the cloud away from your often unsecured network at home or work or worse than that on paper files on your desk, you can rest assured that no system breaches will happen.Paperless
Operation in the cloud enables real estate firms to cut down the use of paper, thus ensuring more control over documents, better data security, and instant backups.
Blockchain
Such real estate technology trends like blockchain, tokenization, and cryptocurrency are increasingly more often on the real estate agenda, with 29% of respondents investing in it.
Blockchain technology is favored by real estate developers for construction projects and by agents for making secure payments. Investors can benefit from this real estate tech trend for fractional property investment, while landlords can use it to sell portions of their stake in a given holding.
For buyers, this means being able to track the history of a property and its ownership.
Even though the popularity of blockchain technology in real estate has not peaked yet, and will not at least until larger players start to invest in the infrastructure, blockchain is certainly one of the most promising real estate technology trends in the years to come.
Robotic Process Automation (RPA)
With so much going on behind the scenes in the accounting departments, robotic process automation of workflows is yet another disruptive technology in real estate, with 26% of respondents supporting it.
RPA is a general notion for any software that automates manual, repetitive, and rule-based processes and tasks. As such, it can come in an array of different forms: from a simple solution to withdraw information from MS Excel to email programs and vice versa to a mature CRM system that routes tasks from multiple departments to a single user interface.
The most obvious area of application of this disruptive technology is the real estate back-office, e.g., the generation of brochures and invoices, management of payments, renewals and credit applications, multi-tenancy risk control, and more.
The general potential of RPA as one of the most crucial real estate tech trends is illustrated in the following graph:
Artificial Intelligence (AI)
Another disruptive technology in real estate is Artificial Intelligence, or AI for short. This real estate tech trend emerged out of the need to get greater value from increasingly enormous data sets, which have long since outgrown human abilities to make sense of them.
As such, AI complements RPA technology, turning “following the rules” into judgment-based processes and predictive decisions called cognitive automation.
Given the dynamic intensification of real estate and technology collaboration, it is highly likely that intelligent real estate systems will be able to not only produce structured suggestions and prioritize alternatives but also perform direct decision-making in the future.
Data Analytics
If just a decade ago, real estate firms made decisions based on professional experience and non-actionable historical records stored in Excel spreadsheets, today, real estate analytics powered by big data make it possible to paint more vivid pictures of future risks and opportunities.
This notion is supported by 70% of Deilotte respondents who firmly believe that real estate firms should provide advanced forecasting and scenario planning, among other services, which is only possible with mature data management software like Salesforce.
Given the soaring number of Salesforce success stories, the platform is one of the best real estate technologies for advanced data analytics, pulling information from all aspects of business and packing it into insightful dashboards right at your fingertips.
Before migrating data to Salesforce, though, real estate professionals should make sure their data is groomed and formatted; otherwise, even such a proven data analytics system as Salesforce won’t be able to extract accurate insights.
Smart Buildings / IoT
Modern people are living a fast-paced life, so our houses and apartments should adapt. The dynamic expectations of tenants and buyers are met with always-connected IoT homes of mart mirrors, robot vacuum cleaners, and wireless kitchen appliances interacting with each other and quickly reacting to people’s needs.
The real estate trend of smart buildings powered by the Internet of Things has been on the real estate agenda back from the early 2000s, but today they are obviously much more affordable and, therefore, viable technology real estate for consumers.
There are three defining features of this real estate tech trend:
Smart amenities like automatic lights that turn on 1 hour after sunset and turn off 1 hour before sunrise.
Connectivity. All smart amenities and gadgets communicate with each other through Wi-Fi, smart sensors, and intelligent access controls.
Remote performance access. IoT sensors (smoke, CO2, motion, leak, gas, etc.) and smart meters collect the data about consumption remotely and send reports to the tenant / owner / property manager’s laptop or phone.
Green Building Technology
With the increased demand for digital systems to track and improve energy use, manufacturers and installers increasingly adopt efficiency-enhancing building materials and systems. One way to do this is to install low-carbon heating and cooling systems, such as heat pumps and energy-efficient A/C.
If wisely paired with the above-mentioned real estate technology trend of smart homes, green buildings can significantly decrease the carbon footprint of construction projects.
And the first enthusiasts who embrace green engineering and performance-management tools that support retrofitting are likely to see big gains.
New Trends in Real Estate Agents Technology
As the collaboration between real estate and technology accelerates, real estate agents should keep up with the change. New technology for real estate agents includes customer relationship management systems, real estate marketing technology, and report generation tools.
In fact, these real estate tech trends strive at the intersection of all other above-mentioned real estate technologies, like AI, cloud computing, or data analytics.
Obviously, transitioning from offline to online will not be simple for real estate brokers and realtors, but it is nearly a requirement in today’s atmosphere. Here are two of the key reasons why digital real estate innovation is crucial for real estate agents:
Customer expectations around the property are shifting. If just a decade ago tenants would seek real estate services on-site, today many choose to use mobile or web searches. In addition, tenants and buyers want higher levels of personalization, which requires having all past communications in one place and being able to access them from anywhere. As a result, not having a strong online presence and keeping data in Excel actually takes away real estate deals.
Brokers can also increase their operational efficiencies by implementing recent real estate innovation ideas such as salesforce automation.
Customer Relationship Management Systems (CRM)
Your data is the lifeblood of your CRM system, and the CRM system makes sure you’re using your data to the fullest.
A customer Relationship Management System, or CRM for short, is an all-in-one platform for managing/tracking a company’s relationships and interactions with existing and potential customers. It aggregates all aspects of business and makes the collaboration between sales, marketing, and administration easier than ever before.
There is generic CRM software like Sugar CRM, Salesforce, and MS Dynamics, which works fine for most industries but does not always match highly specific business needs like those in real estate. On the other hand, there are specialized CRM platforms tailored to real estate processes – AscendixRE, Buildout CRM, or RealNex.
Common functionality of real estate CRM systems includes:
- Cloud operation / online access from a desktop or mobile phone
- Smart prospecting tools to mine targeted lists of contacts
- Workflow automation to assign tasks, get reminded about upcoming events, and skyrocket real estate agent efficiency
- Visualization tools and advanced data analytics
- Automated commission calculation, stacking planning, and more.
Real Estate Marketing Technology
With the pandemic-induced shift to online, word of mouth or direct mail is no longer enough to win prospective clients. Today, having an online presence is crucial.
To strengthen the brand and client experience, real estate agents more and more often opt for marketing realtor technology, like listing portals that let you publish and update your listings right from your CRM (MarketSpace) or automated marketing campaign tools to send personalized journeys to clients (additional service in RealNex and Buildout).
On the whole, marketing realtor technology is commonly associated with the following functionality:
- Personalized email campaigns
- Third-party listing site integration
- Lead generation, qualification, and nourishment
- Advanced stacking planning
- Integration with CRM, and more.
Ascendix MarketSpace goes beyond this. Apart from the basic features listed above, the platform includes collaborative project workspaces, a document signing program, and secure deal rooms, all within one core solution AscendixRE CRM (Unlimited plan only for $129/mo).
Report Generation Tools
Brochure generation still has its place under the sun, but a bit in a different form: clients more and more often request marketing collateral online. And if every real estate agent can generate more or less decent collateral in amateur tools like Canva or Photoshop, the key differentiator here is how quickly they can do it.
With marketing automation software like Ascendix Composer or Buildout, on the other hand, you’ll be able to generate digestible, meaningful, and professional documents in a matter of 5 clicks as all property data, photos, and client records will be pulled out from your CRM system or another database, so you won’t need to fill in all fields manually.
The beauty of Ascendix Composer is that, unlike Buildout or other solutions, you do not need to invest in yet another stand-alone solution, as Composer is already included in your subscription.
Will Real Estate Agents Be Replaced?
Contrary to what many people feared, the rise of AI and other real estate technologies hasn’t led to a surge of jobs being replaced by intelligent machines, and neither is it likely to in the foreseeable future.
While current technology in real estate will continue to expand and help us derive greater value from client interactions, it can never replace the nuanced regional knowledge and skill in negotiating in a very emotional environment, which so far has been a luxury only available to humans.
Both sellers and buyers can be very emotional during a transaction, which by far is one of the most important milestones in most people’s lives, and I can barely imagine sending clients to a chatbot-type app asking them to “press five” to reach a representative in some far-flung office.
So, until property technology is able to behave “emotionally,” it is very unlikely that real estate agents will be replaced by some realtor technology in the near future.
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