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You likely use artificial intelligence without even realizing it. For example, when you Google something, the search engine is being powered by AI, and when you scroll through a social media feed, the images you saw were powered by it, as was the email sort that categorized your inbox. But the housing market… surely that’s safe from the AI tsunami, right?
In reality, however, this technology is in fact slowly transforming the way we shop for a house, and is set to play a much more active role… far beyond a site simply pointing out property listings.
Applying a wealth of data
To get a sense of what AI could do for real estate, let’s paint a scenario. If you’re a typical homebuyer, you reach adulthood, get married and have a child (what we in the business call “family formation”). Throughout this process, and whether in empowering or disquieting ways (depending upon your perspective), AI is always watching. In what you may have heard referred to as the Internet of Things (IoT), all of our devices are connected, collecting data about how you are living that new family life, including café lunch hours, car trips, small errands, how often you check your email, the kind of cereal you buy… and visits to a relator. Applying that information, large companies like Google can make guesses as to when you reaching adulthood, get married, have a baby on the way… even how much money you make. Before you are even conscious of the need, this applied AI guesses when you might need a house, and that it needs to be in a good-schools area not too far from work and friends and family. It might tell you, before you even feel the itch, that you need to start looking, and will put a few property options in front of you that are in your price point. It will even have even crunched some numbers and help you be ready to apply for financing.
Related: Want to Make More Money in Real Estate Development? Use AI.
Wilder still, AI in real estate will eventually be able to do this at every stage of life. When it’s a good time to sell a home, it will tell you. If you’re ready to have more children or retire, it can anticipate that — machine learning will become a long-term tool that can guide property investments and decisions for years and even decades. And as far as actually looking at a property is concerned, in this near-horizon scenario a buyer could simply put on a pair of virtual reality goggles and do a walkthrough — be able to check out properties across town or halfway around the world… all from a couch.
Where we currently stand
At the moment, AI as applied in real estate is in an early-games period, but the shift is happening. Some companies are already building and integrating systems that can sort through millions of documents (e.g., mortgage liens and titles) to improve the buying process. Those systems can also triangulate or evaluate properties based on specific criteria (including price point and square footage) in ways that assist agents, and can provide forecasts for the future so that homebuyers can make smarter purchases or sales.
Related: Real Estate Is Way Behind in Tech. Here’s Why and How to Fix It.
Two sides of a potential coin
One of the advantages this type of homebuying future is that it can bypass many of our biases and assumptions; having been a constant companion our whole life, AI will know us in some ways better than we know ourselves. Often, personal analysis surrounding wants or needs is based on elements that aren’t always accurate, as these thoughts are filtered through conceptions based upon what we think we know. A quick example: how many times have you been surprised when a Netflix movie recommendation or an Amazon book recommendation turns out to be something you never would have thought of, but then thoroughly enjoy… yes, there is AI again. It might also know how much you hate where your dishwasher is, or that you usually spend 3.57 hours a week cooking, and is not going to judge those facts or habits or make assumptions based upon them the same way a person would. As a result, recommendations offered as well as their timing might better reflect what is really wanted and needed.
On the flip side, using AI in this way requires the surrendering of a substantial amount of perceived privacy. (It can only work with what you feed it.) AI-fueled systems are also capable of making errors — wrong conclusions that could create serious social or legal problems, as we are currently seeing with facial recognition systems.
Related: This Proptech Is on the Move
Deciding how AI and homebuying will synergize
Machine learning is only getting smarter and more ubiquitous, and although having it work comprehensively for real estate transactions is still down the road, it can be a viable and helpful system if organizations and homebuyers push to develop it ethically. In that sense, the future of real estate is entirely up to us.