IBISWorld Industry Reports stated that the U.S. real estate industry generates more than $1 trillion dollars annually. In 2017, real estate technology investments estimated at less than 1% of this annual rate. Technology and real estate are often compatible. It would not be farfetched to expect that real estate technology will develop into a healthy growth sector.
Three Real Estate Tech Phases become clearer as the technological revolution continues. Real Estate Tech 1.0 begins with the early Internet. Move.com is one example. In the 2000’s LoopNet, Zillow, and Trulia all impacted the commercial marketplace. However, history may only consider this first phase as a small footnote when examining the other two.
Real Estate 2.0 is here right now. It encompasses tech centric services and space arbitrage. It is still difficult to distinguish between conventional real estate and that portion of the industry dependent upon technology. There is almost a linear relationship between Real Estate 2.0 growth and new hires with space acquisition. Still the trend toward tech is clear. The success of AirBnB, WeWork, and Redfin illustrate the 2.0 transformation.
Technology will be a fundamental aspect of Real Estate 3.0. The Internet of Things and automation are integrating into new properties and construction. Big data and blockchain aggressively seek to transform the real estate industry. Management platforms expect to match people, services, and properties. AI and machine learning are permeating every aspect of the digital world. It is AI and its associative technology that will begin to merge the virtual and real worlds. One day, augmented reality may become more common than smartphones.
While several technologies will shape the future of real estate, three fundamental aspects expect to dominate the development:
- search platforms
- online transactions
- rapid closing process
Since most people have access to the Internet, the real estate industry’s information is now a commodity. While information dissemination occurs rapidly, online transactions have lagged more than most industries. Some factors like the nature of properties are obvious. However, much of the slow advancements are attributed to antiquated processes and intermediaries. These changes will be necessary for rapid closings to become common. Though, once compliance, regulation, and financial etiquette can be ascertained, transactions speeds expect to be unrecognizable from the current paradigm.