Real Estate is an ever growing industry which always has to adapt to the new technologies entering the market. It is the case when building, selling or renting a house for example. People will always search for the latest technologies when searching for their dream home. The one in which they will feel the most comfortable, safe and good in. To match the growing expectations of customers, the real estate industry has to adapt and use the new technologies available. So, what are the 12 innovations that will change the real estate industry in 2023?
The metaverse comes from the Greek word ‘meta’, meaning ‘after’ or ‘beyond’ and the English word ‘universe’. So, the metaverse would be something going beyond our universe and it is! The metaverse is a virtual world in which you can interact thanks to a virtual avatar as well as buy properties and land. So, as it is a virtual place, it gives you the possibility of endless development of the properties you buy. This metaverse works on the same model as our world. For instance, to buy something we have to use money, to acquire lands in the metaverse we have to use cryptocurrency (virtual currency). Ethereum (ETH), SAND and MANA are the most used cryptocurrencies on the different platforms of the metaverse. Using the metaverse to buy new properties is a way to monetize goods and services as well as earning profit.
2. NFT (Non-fungible token)
NFT are unique digital items stored on a blockchain, which is a secured system. People can buy or sell their ownership online. Usually when we think of NFT, we think of digital artwork but the NFT market is continually expanding. In 2017, Michael Arrington decided to buy an apartment in the city of Kiev in Ukraine using Ethereum (ETH). In 2021, this exact same apartment was put up to an auction as an NFT and sold for 36 ETH corresponding to $93,429.72 on the platform Propy. Which makes this apartment the first ever real estate asset transfer. The highest bidder and so the new owner of the NFT became the owner of the legal entity, the property itself and the NFT artwork which was inside the apartment. The owners will have to use the same process to resell it. This purchase shows how the real estate market could evolve in the following years through this new innovations. It also shows how selling properties as NFT could actually accelerate the process of selling a house.
3. Desktop appraisal
Desktop appraisals are appraisals done without an onsite inspection. This solution is interesting to use when the home inspected is in average condition and not complex to value. Indeed, the appraiser will not step a foot inside the house and will only examine it through secondary data sources. For example public records, MLS, prior appraisals, building permits and floor plans integrating the gross living area (GLA). This type of appraisal can benefit everyone involved in the process, from the appraiser to the homebuyer. For appraisers it’s a time saver as they don’t have to schedule the inspection, go on site and measure everything. They can do them from their office and save time to do more appraisals. As appraisers save time, it will also have an impact on lenders and agents. The appraisal will be given within shorter terms and lenders will be able to schedule earlier closing dates. According to Fannie Mae’s website, desktop appraisal would have lots of benefits such as supporting digital transformation in the mortgage origination process. It may also reduce confirmation bias for example.
4. Building Information Modeling (BIM)
Building Information Models are computer files that can be exchanged, extracted as well as networked. They help the decision making process on a property. Before this technology it was impossible for architects, engineers and contractors to work together on the same plan for a building. So, miscommunication and errors were more common. Thanks to BIM, it is possible to work together on building’s design, construction and operation which is faster and avoids too many errors. In the end it will enable real estate experts to work on more properties. The BIM industry reached US $140.9 Million in 2021 and is most likely to grow even more in 2023.
Drones are small flying devices that are able to take pictures or videos of places from the sky. Using these innovations for real estate could be very useful as it helps to visualize a location from an aerial perspective. It then gives the potential buyer a better idea of the layout of the house or the land they want to buy. Drones not only enable us to see pictures of a property through human eyes but also from very different points of view. It could help to no omit ceratin things because they were not visible or hard to reach as for example the roof of a property and the state it is in. And as surprising as it can be, there are also photographers using drones inside for interior video, this is the case of Torin Johnson.
5G as 3G and 4G were before it, is a wireless technology which connects everyone and everything together. This technology should be the fastest wireless technology, with larger capacity and ultra-low latency of only 1 millisecond. 5G would be 10 to 100 faster than 4G but would vary depending on the area. This technology will connect everything all around the world which would fasten communication including business communication. In January 2022 was held the European 5G Conference where the goal was to establish european rules concerning this technology. Some of the main themes were “Pushing the limits of 5G – what comes next? Delivering densification – Streamlining the rollout of 5G networks in urban areas”. As we can see here, governments take the subject of 5G very seriously as it is the next wireless technology that will connect the world.
7. Smart homes
A smart home is a home furnished with devices that can be controlled remotely from a phone or a computer. These homes give the possibility to control the various devices of your house while you are not there. For example, if you go for a vacation, you can make sure you haven’t forgotten any lights in your house and avoid a massive electricity bill. It can also notify you if someone tries to break into your house and alert the police. As smart homes were considered a luxury before, they are becoming more and more common, as technologies become more accessible. Using a floor plan on your home automation application to visualize the property can improve your user experience. Indeed, it is a way of seeing the layout of your home and helps you eliminate any mistake that could happen when interacting with your smart devices. It is also a way to get rid of lists and hard-to-use tree structures that could be confusing when switching your devices on or off.
8. Artificial intelligence (AI)
Artificial intelligence is the development of computer systems which are able to perform tasks normally requiring human intelligence. Using this innovation in real estate is to automate the whole process and fasten all the decisions. Which means that thanks to this innovation, real estate experts can access all the homes’ information very fast. Then the data collected makes predicting home values easier. So, AI can help humans work better and faster as it can learn, make decisions and solve problems on its own.
9. Internet of things (IoT)
This is a system in which different devices are connected and able to send data to each other in real time all around the world without requiring human actions. This technology enables companies to work smarter as they can automate all of their processes and reduce the workload. Unlike artificial intelligence, IoT is not able to learn from past experiences to improve itself. The invention of IoT intercoms makes properties safer. For example, the data in these intercoms is encrypted, it makes it harder for hackers to access it. Intercoms also keep videos of what is happening around your property which can be helpful in case of suspicious activity.
10. Virtual and augmented reality
Virtual reality is a computer-generated world, which means that everything you see is virtual and looks like reality. Augmented reality uses computer-generated images to add to existing surroundings. Using these new technologies for real estate gives the possibility to have a tour of a property without being there. It would help international investments, as people from all over the world could visit a property without leaving their home. Imagine also the possibility of selling a place which hasn’t been built yet. People will be able to picture it completely as they would ‘visit it’ virtually. It would also be possible to visualize what to do with an existing place, see the full potential of it by virtually changing it.
11. Innovative floor plan scanning apps
An average smartphone user uses 9 apps a day and 30 Apps a month. As smartphones are getting more sophisticated and more practical, mobile apps are the way to go. Instead of having to carry or use expensive hardware, now it can be all done from a phone. It is also a time-saver as people can look at the property from their phone and go visit it when interested. Customers and companies can use a variety of mobile applications to improve their experiences or services. Most innovative real estate companies integrate tools to their systems to improve the user experience and stay relevant in the market. For example, use CubiCasa to make accurate and fast floor plans that can be added to houses’ listings, this would give a better idea of properties’ layouts and help sell them. Several MLSs across the US partnered with this floor plan app company to provide free floor plans with measurements to their audience.
As desktop appraisals require a software-generated floor plan, it can also help appraisers complete more assignments.
Crowdfunding are platforms raising money thanks to donations of individuals in order to finance new businesses or projects. It allows people to invest in what they truly believe in. They also only give the amount of money they want which leads to more diversification in their investments. For real estate, it gives the possibility to widen the range of potential investors. It can also allow companies to be able to create projects for which regular funding is harder to find. This technology is gaining popularity as more and more crowdfunding platforms emerge on the internet. It might be a good idea to consider crowdfunding when having troubles financing new projects.