If you’ve ever purchased (or sold) a home or participated in any kind of commercial real estate transaction, there’s a good chance that you’ve noticed how complex, time-consuming, and cumbersome the process tends to be. If you regularly follow this website, then you probably already know that those are exactly the qualities that tend to make an industry ripe for a tech-driven disruption.
Now that artificial intelligence and big data solutions are beginning to reach maturity in a wide variety of markets, it appears that the real estate industry is on the verge of just such a disruption. To understand the significance of the coming changes, though, it’s important to first understand the way the real estate industry has integrated new technology in the past. Here’s a look at technology in the real estate industry and how (and why) AI and big data are poised to change everything.
The walled-garden approach
The real estate industry, in almost every country around the world, has historically taken a wary, almost hesitant approach to technology. A perfect example may be found in the United States, with the advent of multiple listing services (MLS), which evolved over time to provide many of the searchable, internet-facing real estate portals we know today.
Behind the scenes, though, the system remains a fragmented collection of regional fiefdoms, jealously guarded by operators and agents alike. That arrangement is a natural result of a commission-based industry, where cooperation often means earning less money for your work. The situation is much the same across the rest of the global real estate industry.
A lack of standards
Of course, since the concept of big data analytics in real estate is relatively newer, there are no agreed-upon standards that govern the collection and storage of data. Especially for the use in databases like the aforementioned MLS systems. Because of this, the real estate industry has long suffered from inefficiencies. Such as, loosely-connected agencies and organizations who struggle to collate and make use of whatever property data is available to them. But how do these agencies tackle this problem?
This is where big data specialists, such as Cherre, comes in. Cherre has built a new AI-powered big data collection and analysis platform designed to ingest, analyze, and present property data from a variety of sources. Including municipal databases and the proprietary systems common to major real estate agencies.
Cherre is far from alone in looking to tackle the issue of the real estate industry’s fragmented and unreliable data systems. Its rival company Compass recently secured $400 million in additional capital funding to expand their own property information data service into global markets. Their service connects the power of big data to consumers and agents alike, in a system that some have dubbed “The Pinterest of Real Estate“.
Compass also plans to enhance their backend data service to include advance machine learning capabilities that will enable groundbreaking features like predicting when previous clients may be considering another relocation.
An industry in flux
So far, the global real estate industry seems to be taking these new technology developments in stride. There’s even evidence of a similar disruption is the financial sector as it relates to real estate, led by mortgage innovators like Habito in the UK, who are driving down the costs, complexity, and time involved in securing real estate financing. As these two companion trends start to converge, the global real estate industry will likely be remade into a forward-looking, customer-centric, and data-driven market that bears little resemblance to the one we know today.
If, and when, that happens it will be good news for the stakeholders on all sides, and another big victory for technology in the midst of the AI and big data revolution.