Artificial intelligence has become the breakout technology in the past ten years, utilizing huge amounts of computing power to learn and identify patterns in data without the guidance of humans. These algorithms can be used on nearly any problem or question, provided there is enough input data for the algorithm to process to generate realistic results. This broad generalizability means that industries that have traditionally relied on purely human-driven research and development can now harness massive amounts of data to become more efficient – and potentially more profitable.
A sector undergoing this technological shift in recent years is the real estate industry. Since its inception, property ownership has been driven by personal preferences and human interactions, primarily among buyers, sellers, and real estate agents. But now, with algorithms able to process individual preferences and generate data at a room-by-room level, massive changes to the buyer-agent-seller paradigm are happening.
Technology in The Real Estate Industry
During his time as leader of that investment fund, Roy learned some valuable lessons on the efficiency of the traditional real estate market. According to Roy, “curating leads, identifying customers, rigorous follow-up,” and a plethora of other tasks related to linking potential buyers with current sellers was “extremely daunting.” The enormous amount of energy and time spent on a single property sale seemed quite inefficient.
Impact of AI on The Real Estate Industry – Home Value Appraisal
With this in mind, Roy identified some key areas where technology could influence the space – and in particular, areas where AI and machine learning could significantly disrupt tradition. One key area where AI is already influencing the market is in home value appraisal (also referred to as comparative market analysis, or CMA). When a person approaches a real estate broker intending to sell a house, the broker will analyze key data points to appraise the potential selling price of their home. Factors like location relative to schools, shops, and other homes are considered, as well as square footage, in-home upgrades, and more.
Impact of AI on The Real Estate Industry – Finding the Right Buyers
Another aspect of the real estate industry that’s using AI is the targeted advertising space. While targeted advertisements have been part of Google and Facebook’s wheelhouse for years, other industries have found it difficult to link buyers and sellers without hands-on time from experts in the space. In real estate, this is especially true – the exhaustive lead generation and customer vetting that Roy referred to is the industry standard for advertising.
Technology is critical to most aspects of everyday life, and industries that rely on human interactions still are feeling the impacts of technology. But the applications of algorithms used in machine learning can be viewed as a tool for sectors like real estate, as Roy Dekel suggests. By harnessing the power of machine learning, real estate agents can increase the efficiency and productivity of their sales pipelines while giving homebuyers the home of their dreams.