How Technology Is Changing the Real Estate Market

In today’s digitally driven world, we see technology at almost every corner. Finance and healthcare have long since adopted tech advancements, but now we can also see technology in real estate. Originally known as a conservative industry that relied on traditional face-to-face interactions, it has now entered the digital realm and shows massive changes.

From automation to big data analytics and AI-powered processes, it is easier than ever to buy and sell property in 2024. And by understanding these changes, you should have an easier time adopting them yourself. In this article, you will learn more about how technology changed real estate and why you should follow the trends.

Top 6 Technologies Transforming the Real Estate Market

The tech world is continuously improving, but there are 6 current technologies that have taken the real estate sector by storm. Here is how they changed the way we interact with the industry.

1. Digitalization

Like the rest of the world, digitalization has changed the real estate industry at a fundamental level. Now, people can easily look online for information concerning pricing, property transactions, local infrastructure, and more. All these details are easily available in real-time, benefiting buyers and sellers alike by helping them stay one step ahead.

Digitalization also allows for better accessibility. Now, buyers can be in one corner of the world and buy a house at the other end. This global reach enables investors to get the best opportunities the moment they appear, closing deals faster. This way, they won’t have properties snatched up from right under their noses simply because they couldn’t get to the destination fast enough.

2. Process Automation

Process automation is perhaps one of the best changes that occurred in real estate technology, especially as traditional practices are often time-consuming. With the emergence of automated systems such as property management software and eSignatures, processes that would normally take days can now be completed in mere hours.

Automation in real estate not only improves efficiency but also reduces the chances of human errors. An average of 85% of real estate agents fail within their first five years in the industry, and the primary cause of this is the mistakes they make over time. Automation can reduce this error percentage, leading to more homes being successfully sold.

3. Virtual Reality (VR) and Augmented Reality (AR)

Virtual reality (VR) and augmented reality (AR) are perhaps two of the best things that happened in real estate. As a buyer, getting a property can be very stressful, as you must see the house yourself. If you are lucky enough to have a flexible schedule and the house is downtown, this won’t bother you much. That said, if you work with a fixed 9-to-5 and the house is in a different state, this can be challenging.

With augmented and virtual reality real estate, buyers can interact with the property without leaving the comfort of their homes. Around 61% of homebuyers now prefer virtual tours for viewing a property, preferring them over pictures and descriptions, which would often require an in-person visit as well. The technology continues to rise in demand, fueled by Millennials and Gen Zs looking for simple ways to buy property.

Aside from taking virtual tours, real estate purchases are now made more accessible as buyers can visualize renovations and furniture placement. This is convenient for buyers and renters moving into an empty space, as they can visualize the place that could become their future home. This makes the technology convenient for real estate investors, as they would no longer have to spend as many resources as possible on home staging.

4. Big Data Analytics

Big data analytics have significantly revolutionized how investors handle real estate, offering deeper insight into the market. With these types of analytics, one can easily pull data on demographic analytics and infrastructure forecasting, understanding the property’s economic future.

By analyzing this type of data, professionals can identify risks and predict trends, developing a sound investment strategy. Nowadays, tools such as REI Lense can offer you accurate information on each property, checking the potential for returns by analyzing the neighborhood. This helps increase real estate security when building your portfolio and offers you a competitive edge.

5. Blockchain in Real Estate

Blockchain technology is expected to show a CAGR of 87.7% in the following years as more companies adopt its benefits. Naturally, the real estate industry has also jumped the bandwagon, as it offers secure and transparent ways to handle transactions. Due to its decentralized nature, real estate agents are using blockchain to ensure their data can’t be tampered with, preventing fraud.

Blockchain also aids by reducing the need for intermediaries (i.e., notaries and brokers), decreasing costs, and accelerating the selling process. As each transaction is verified using a clear audit trail, falsifying ownership is nearly impossible, making it a secure option for homebuyers.

6. Artificial Intelligence

Artificial intelligence is becoming a heavily relied-on technology in real estate, due to its ability to handle large amounts of data and easily predict market trends. This allows homebuyers to assess a property value faster and more accurately than ever, telling them when it’s the best time to buy or sell a property.

With AI technology, real estate professionals can easily assess buyers’ preferences, showing them properties that match their needs. The technology can also be used to screen tenants and forecast lease renewal, streamlining the operations.

The Future of Real Estate Technology

Real estate and technology have been crossing paths for a while, helping people look for the perfect home without blindly seeking “For Sale/Rent” signs. That said, the technology revolution is not over, and its rapid progression will bring even more changes into the real estate domain. By expecting it, we can also learn to make the most of it.

What Changes Can We Expect

Among the different things happening in the world of real estate, automation is the biggest trend in the industry. The process of home buying is simplified nowadays, as individuals are using the streamlining benefits of automation to shorten the closing time. Home buyers now employ this technology to perform property searches, transaction management, and mortgage approvals.

AI in real estate is gaining traction, and we can expect it to take over the industry in the future. Home buyer assistants powered by generative AI are becoming increasingly common, offering tailored recommendations to property seekers based on preferences. These systems are meant to simplify the process overall, whether your goal is to find a fitting property or secure financing.

Big data in real estate is also expected to evolve. This type of technology can be very helpful for real estate professionals, as it helps them gain vast amounts of data insights. Accurate information on property valuation and market trends should become available within moments, allowing buyers and sellers to make informed decisions.

Internet of Things (IoT) technology is also steadily making its way through, interconnecting every aspect of a property and allowing homeowners to control their homes remotely. This trend is expected to continue, especially as the number of smart home users should double by the time we reach 2028. Moreover, properties are shifting towards sustainability, as green energy has become a common request from property seekers.

Last but not least, robotics is expected to transform how real estate construction is done, saving resource money while speeding up the development process. With robotics, developers can automate various repetitive tasks such as welding and bricklaying. The technology is still being perfected, but once it’s up and running, the robots can work around the clock with fewer human errors. The risk of injury could be reduced, as robots should be able to perform the more dangerous tasks.

A Challenging Shift Toward the Future

We see the future shift toward technology use, but that doesn’t mean evolution is going to be a smooth ride. For digital transformation to be fully embraced, the industry must first navigate through a series of challenges. The first challenge concerns data breaches and security risks, especially as most transactions nowadays are done online. Since most industry platforms handle sensitive client information and property records, real estate has become a prime victim of hackers.

To keep the risks at a minimum, companies are required to invest in robust cybersecurity defense. This includes things such as multi-factor technology, encryption, and multiple audits to determine where a particular vulnerability may be. This could help prevent a financial loss as sensitive data is leaked, reducing legal liabilities.

Resistance from other market players is also expected, especially as some professionals are reluctant to technological change. This usually applies to the older generations, who are accustomed to specific traditional processes when doing their work. Limited regional regulatory frameworks could also prevent companies from adopting the technologies. Businesses are recommended to follow the changes in law and regulations, implementing the latest technology to prevent themselves from becoming obsolete.

The Bottom Line

Technology has significantly changed how real estate is handled, simplifying the buying and selling process. Data has become easily accessible through digital databases, and technologies such as AI allow you to analyze it better, helping you make informed decisions. By embracing technology, you can experience satisfactory transactions that potentially lead to profit.