It was only a matter of time before technology meaningfully influenced the real estate industry. For many years, the industry operated on outmoded physical MLS (multiple service listings), bus shelter marketing, in-person home showings and conventional financing modes. Even as other industries like healthcare and retail embraced emerging technologies, real estate stayed doggedly old-fashioned.
That’s all changing. Proptech (short for property technology) is all the rage in the real estate industry now, pushed forward by app development companies and innovative entrepreneurs keen to leverage emerging technologies.
In this article, let’s explore how emerging tech – and the brains behind it –is revolutionizing real estate.
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When a proptech company approaches a top mobile app development company to create a mobile listings app, they are almost certainly discussing immersive technology like VR and AR.
Public excitement around virtual and augmented reality didn’t begin with the pandemic, but the COVID outbreak provided the perfect catalyst. In the early days of 2020,real estate consumers wanted remote options for viewing and purchasing real estate, so several proptechs turned to immersive tech as a solution. With AR/VR, practitioners could offer real-time simulations of home tours without risking client or seller safety.
Although the pandemic appears to be ebbing, immersive tech is here to stay. Listings apps that leverage AR/VR are more engaging and provide listing agents with a more compelling way to market a property.
Big Data and Predictive Analytics
Big data and predictive analytics have weaved their way so thoroughly and deeply into real estate that it would take an entire article to parsetheir numerous applications. For the uninitiated, big data refers to reams of high-velocity, high-volume and diverse data. Meanwhile, predictive analytics puts that data to work by gleaning valuable insights.
Investors use big data to pinpoint hot CRE opportunities; developers leverage big data to pinpoint up-and-coming areas by non-traditional data; consumer-facing fintech apps use predictive analytics to provide customers/borrowers with a higher level of service; the list goes on. Putting unprecedented volumes of data to work has fundamentally reshaped the industry, reducing risk and introducing unforeseen levels of convenience.
AI and Fraud Prevention
Artificial intelligence and machine learning are instrumental in predictive analytics (see above). But some enterprising proptech thinkers are also applying the technologies to title fraud prevention.
Fraud detection is all about recognizing patterns. Even the most cunning human fraudsters succumb to patterns. AI/ML technologies that analyze enough transactions eventually become sophisticated at telling the difference between a “normal” transaction and a fraudulent one. If proptech companies can perfect AI-powered fraud detection, it could make the entire industry safer for consumers and investors.
Blockchain Technology and Fractionalization
Finally, blockchain technology is on the bleeding edge of the real estate industry. Not nearly as widely adopted as the technologies above, blockchain is nevertheless a compelling case in real estate.
The technology, most closely associated with cryptocurrency, is essentially a public and immutable ledger – perfect for facilitating and storing transactions. And because blockchain authenticates transactions instantly, there’s no limit to how small a transaction can be. Without notaries, escrows or lawyers, a real estate investor can make a micro-investment in a real estate property, buying a fraction of the asset rather than the whole thing. This is called “fractionalization” (or tokenization), and some experts maintain that it can help democratize real estate investing.
This is only a cross-section. There are countless other ways that proptech entrepreneurs and forward-thinking app development companies apply technology to real estate. The takeaway here is that the real estate industry is finally transforming, picking up new tricks along the way.