Artificial intelligence (AI) is a buzzword in almost every industry. It’s unlikely the first thing that jumps to mind when it comes to real estate, but artificial intelligence in real estate has the power to change property investment, streamlining processes for buyers, sellers and real estate professionals. The value of the United States real estate market is expected to reach $113.6 trillion in 2023 and $143.9 trillion by 2028, and understanding the possibilities is essential.
The applications for AI in real estate are growing, and knowing what to expect can set you up for success, regardless of your goals.
What Is Real Estate Artificial Intelligence?
Real estate artificial intelligence is the application of AI tools to streamline and inform real estate transactions. When we think of AI, our minds often jump to generative models, which allow chatbots to generate informed responses to complex inputs. While agents could use AI to write property descriptions, AI in real estate is more detailed. It can be used in multiple real estate applications, but the most common include:
- Predictive analytics: Machine learning in real estate involves creating algorithms that analyze historical data to forecast trends and make accurate predictions. In real estate, buyers, sellers and real estate professionals can use AI tools to analyze the market, evaluate property values and identify investment opportunities.
- Generative AI: Real estate professionals can automate task creation, including listing descriptions and property searches. Automating repetitive tasks frees up valuable time and resources. Generative AI can also play a significant role in marketing efforts.
- Computer vision: This branch of AI can analyze property images, extract essential information and identify external features like garden spaces. This tool can make property evaluation more efficient and listings more accurate, giving buyers a holistic view of potential properties before purchase.
How Will AI Affect Real Estate?
AI real estate trends provide valuable information on the potential for future change, which is essential for buyers, sellers and real estate professionals to understand. AI has already streamlined many real estate processes, which gives us an idea of what to expect in the future. It has the potential to affect real estate in the following areas:
- Predictive maintenance: Whether you’re selling or renting a property, keeping up with maintenance costs can be challenging. AI can help predict maintenance needs, saving sellers money in the long term.
- Market analysis: Much of real estate market success is based on accurate market predictions. Manual predictions have limitations, as humans cannot accurately consider and identify complex patterns from millions of data points. AI can use algorithms to generate accurate market predictions and potential investments from the news, crime statistics, business registration records and more.
- Productivity: Learning algorithms and predictive analytics can streamline lead identification and client connections, giving sellers and buyers a better experience.
- Communication: Clear and effective communication is essential in real estate, and AI can provide personalized communication channels for buyers and sellers throughout their journeys. Staying connected throughout a real estate transaction significantly improves the experience and engenders trust between stakeholders.
- Virtual tours: AI-powered virtual tours are already gaining traction. Sellers can show their properties without opening them up to unsuitable buyers, and buyers can view properties in their own time at a convenient location.
- Customer service: Machine learning algorithms can analyze data from customer interactions, purchase history and other data points to gain a deeper understanding of customer preferences and identify preferred property features, locations and budgets.
- Virtual assistants: AI virtual assistants can improve customer service and provide valuable insights by handling routine tasks, like scheduling appointments and answering basic questions. This frees up real estate professionals to focus on matching sellers with the best buyers. AI assistants can also analyze market trends, providing insights to support and inform marketing strategies.
Although AI has the ability to transform the real estate industry, one thing is clear — it can only work in conjunction with real estate professionals who see things that computers might miss and understand the emotions involved in selling or buying property. Together, AI and real estate professionals can make a formidable team, changing the industry for the better.
How Buyers Will Benefit From AI in Real Estate
For buyers, AI can remove some investment-related guesswork. Machine learning and predictive analytics can provide more accurate market forecasts, allowing buyers to make strategic property investment decisions. Finding the right property has also changed with the introduction of AI. Up to 97% of homebuyers use the internet to search for property, and AI can simplify and personalize the search process, making it more efficient for buyers.
Machine learning models can pinpoint buyers’ most intricate preferences, automatically showing them properties that meet their needs. AI models may even be able to detect subtle inclinations, further personalizing the experience and making searches fun and interactive.
How Sellers Will Benefit From AI in Real Estate
AI has many potential benefits for property sellers, from predictive maintenance capabilities to keep a property in the best possible shape, to unbiased home appraisals. Market analysis can benefit sellers and buyers, as analytics inform strategic decisions about when to put your property on the market and the best selling method to use for your situation.
AI models can outline who the typical buyer is likely to be for a property and develop a specific marketing strategy to target these buyers, which could result in quick and successful sales. They can add intricate details to the virtual staging process, like staging a home to appeal to a specific demographic. In addition, AI can help buyers decide what changes to make to their property before selling.
AI technologies can also produce automated valuation models (AVMs) that consider factors like location, features, market trends, security and comparative sales data without human bias. With AVMs, sellers can use objective property valuations to get a fair market price for their property and ensure security.
The Possible Risks of AI in Real Estate
Using AI in real estate has significant benefits, but like any innovation, it also comes with risks. Using technology with such far-reaching implications requires caution. The more data you give an AI, the more it learns, which could spark privacy concerns. AI can also only work with the data you provide, which means if you miss something or include bias in the input phase, it may misunderstand something critical and provide flawed information for decision-making.
AI has limitations. It cannot understand emotions and nuances in human behavior, which can lead to incomplete market forecasts or unusable advice. Human creativity and understanding are fundamental parts of the real estate industry. Misusing AI can cause a lack of creativity in marketing and communications endeavors. Understanding the value of combining AI-driven insights with the expertise and experience of trusted real estate professionals can lead to successful transactions.
Sell Your Next Property With Cates Auction & Realty Company
Technological innovations in real estate could mean significant changes in how we buy and sell property. While the opportunities are exciting, having a real estate company you can rely on is essential for many sellers. Cates Auction & Realty Company has been bringing buyers and sellers together since 1942, and it’s this dedication to our craft that keeps us innovating year after year.
Our award-winning technology and innovative approach change how real estate is sold, providing sellers with an online marketplace for competitive bidding. This method brings buyers to the table and ensures timely sales and true market value on your property. You can set the terms and auction day of your house, and we’ll put a spotlight on your property, instead of trying to make it stand out among similar real estate. If you’re considering selling in Missouri or Kansas, schedule a complimentary property analysis with us today, or contact us to learn more, and we’ll be happy to answer any questions.