What is Artificial Intelligence (AI) in Real Estate?
AI technology refers to sophisticated algorithms and data analytics to make accurate predictions about future scenarios. What makes the use of this technology beneficial is the ability of a given piece of software to analyse and interpret that data to the point where it can then automate processes in more intelligent, creative and flexible ways. In the property market, this kind of advancement has yet to fully take place. However, artificial intelligence will re-design the property industry in the near future. In fact, numerous changes are currently underway: residential real estate agencies have now shifted to electronic platforms, artificial process optimisation and robotics are becoming increasingly important in the construction sector, while smart buildings with advanced building control are now prevalent in the field of facility management (Hajnal, 2020).
The real estate AI business is growing with new companies entering the industry at a high pace – from American Bracelet & Skyline AI to German Architrave GmbH and English LandTech. With more startups emerging in the sector, it is worth exploring new career opportunities being created, which we will discuss in more detail later in the article.
How is AI changing the Real Estate industry?
The real estate industry is experiencing a digital revolution that is affecting not only its nature in terms of the markets and work environments but is also influencing its progress. This tech disruption is closely linked with the emergence of a phenomenon known as PropTech. According to Siniak et al (2020), « PropTech is characterised by the massive implementation of emerging technology such as home matching tools, drones, virtual reality, building information modelling (BIM), data analytics tools, artificial intelligence (AI), Internet of Things (IoT) and blockchain, smart contracts, crowdfunding in the real estate sector, fintech related to real estate, smart cities, regions, smart homes and shared economy ». The utilisation of these technologies will not only improve the efficiency of operational tasks but also change decision-making processes. By recognising relationships and patterns in large data sets, the effects of possible future scenarios can be examined more closely.
By means of so-called Smart Contracts, relevant information from contracts and documents can be extracted and used meaningfully. This will increase the transaction speed and reduce the search and sorting effort. Accordingly, algorithms can check virtual data rooms for completeness or, in the case of a sufficiently solid database, identify suitable investment targets according to the portfolio matrix. In asset management, the possible use of artificial intelligence ranges from personalised customer contracts through contract management to intelligent building services management. In addition, property valuation, property management and facility management will increasingly change. Possible applications in these areas include simplified collaboration, peer-to-peer transactions, supply chain management and data management (PwC, 2018).
Types of AI innovation in Real Estate
- Advanced property analysis
AI-powered software can be a solution for improving the ability of a real estate business to provide accurate, comprehensive information about property to clients.
Skyline AI uses proprietary AI to collect data points from a variety of sources and analyses past transactions to help get a sense of which neighbourhoods are up-and-coming and which are heading for a potential downturn. By analysing property owner behaviour, this tool can also help commercial real estate investors find distressed properties, off-market deals, and opportunities for value creation.
2. Real estate brokerage
The residential real estate market is the field where AI has made the most spectacular progress. This section of the real estate market simply moved to virtual reality and numerous sites are increasingly replacing real estate agents’ jobs by structuring, filtering and introducing supply in a variety of ways. Machine-learning interfaces and chatbots are already benefiting a lot of businesses by collecting customer data and helping with improving lead generation and content marketing (Hajnal, 2020).
Springbok AI help organisations of all kinds and sizes get the most out of Artificial Intelligence by optimising their processes and/or exploring new growth opportunities with them. Whether organisations have no prior knowledge of the technology or already have resources dedicated to it, Springbok can help at every step of a company’s journey with AI.
3. Property valuation
The spreading of so-called non-traditional methods has been a feature of property valuation’s evolution over the last decade. Some of these methods include hedonic valuation, the use of nervous system networks and contingent valuation. Since AI has the ability to analyse patterns in vast amounts of data, it can be used to make reasonable predictions of the future value of a property. The methodologies, often described as «mass appraisal», are focused on the systematic and automatic analysis of broad databases, with self-learning models supporting them. The number of property attributes or market data points can exceed tens of thousands, which is definitely a kind of analysis no human analyst or market research is capable of conducting (Hajnal, 2020).
Enodo is an automated underwriting platform for multifamily real estate. Its machine learning capabilities can help clients calculate market rents, find comparable properties, and identify lucrative investment opportunities. For those considering doing renovations, it can also help estimate the future value of any added amenities.
4. Property Management
Real estate businesses can track rental and property listings, requests for maintenance, tenant applications, and other information with AI software. These results of the tracking can help to identify the most common maintenance issues, tenant characteristics and preferences, price trends in certain areas, and seasonal availability.
Proportunity offers a service similar to that of Skyline AI for those in the residential real estate industry. Operating in 50 markets, this tool gathers property value data, crime rates, transportation data, and school district ratings to fuel its automated valuation model and predict which properties and neighbourhoods will give you the highest returns.
Impact of AI on real estate recruitment
Although digital transformation in the real estate sector is still in the early adoption stage, the industry is nonetheless facing seismic shift (Piazolo et al, 2020). The implementation of technologies such as data analytics, artificial intelligence, machine learning and robotics are changing operations. Highly administrative roles and tasks that need a human effort (property agents for example) are becoming largely obsolete. This statement underlines that a task-based approach demonstrates how high the percentage of jobs is concerned: almost one in two jobs in the property sector.
However, thanks to the emergence of new technologies, new jobs will be created in the real estate sector as well. For example, the real estate industry has reaped tremendous benefits and development from data analytics and photo capturing technologies. As mentioned, digitisation is also driving employment and many new jobs will emerge as a result.
Some of the AI real estate companies currently recruiting are:
– LandTech, the UK’s fastest-growing Proptech company. Simplifying planning research and giving planners and architects all the information they need on a single platform. LandTech is currently looking for a Senior Software Engineer, who will be working in a cross-functional product development team, reporting to the Head Of Engineering.
– Architrave GmbH leads the digital transformation in Real Estate Management. They use high-level automation through Artificial Intelligence, efficient workflows and data-based decisions that significantly increase productivity with a fast ROI. Advantages other industries are now also benefiting from. Architrave is currently looking for a Senior JavaScript Engineer as well as a Customer Support Agent.
– Wayhome offers a completely new way for people to get on the housing ladder without needing to take out a mortgage. Homeowners get capital to buy a home worth up to eight times their income with only a 5% deposit. The open positions are in Tech (e.g. Senior Frontend developer) and Engineering (e.g. Senior Devops/Secops Engineer).
– Unity Technologies is the world’s leading platform for creating and operating real-time 3D (RT3D) content. Unity’s platform provides a comprehensive set of software solutions to create, run and monetise interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. Unity is currently looking for Senior Data Scientist, Software Engineer…
– Beyond Pricing is the #1 Revenue Management Platform for short-term rental owners and managers to acquire, keep, and grow revenue. Beyond Pricing are always on the lookout for talented developers and engineers.
– Localize is the world’s first real estate marketplace designed to level the playing field for homebuyers and renters — arming them with information once reserved only for savvy real estate pros. Localize is now hiring for Senior Data Scientist, Backend Engineer, Senior Business Analyst, and Client Success Manager.
It is important to mention that the IT positions require substantial previous experience, companies expect candidates to demonstrate varied knowledge of programming languages and a relatively impressive record of projects. On the Business Development side, positions mainly target senior-level professionals as the startups are expanding and therefore are seeking experienced leaders who would take the business to the new level, this is particularly true for the companies going global. Finance-related positions are quite rare in the sector with nearly all the positions centred around companies focused on financial solutions for homeowners.
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