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In the wake of the digital revolution, companies throughout every sector have sought new ways to integrate cutting-edge digital technologies into their existing business processes in order to promote innovation, increase operational efficiency and ultimately optimize the customer experience. No business can evade the ubiquitous digital transformation that’s transpiring across the global economy, and the real estate industry is no exception to this eventuality.
The real estate sector has been relatively slow to adopt digital technologies when compared to other larger industries such as healthcare, retail and finance, but the emerging innovations that have been made possible in just the last few years show a great deal of promise for the future of real estate as a whole. From virtual tours to personalized services to automated transactions, this recent digital transformation has already drastically altered the way we buy, list and manage properties.
There will inevitably be some growing pains as real estate firms, realtors, agents, managers and customers learn to implement and take advantage of these new tools, but the benefits of digitalization far outweigh the challenges associated with adapting to digital technologies.
Prior to the explosion of big data, decisions in real estate such as property sale prices and rental costs were largely made based on approximations and estimates as opposed to empirical data, leaving room for inaccurate property valuations and an inherent degree of uncertainty. However, modern data analysis tools and processes are enabling buyers and sellers to produce more precise property appraisals based on additional insights.
Real estate professionals can harness and interpret data to accurately determine the condition and age of a building, as well as reliable information regarding the types of redesigns and renovations which were previously made to it. This dramatically reduces any uncertainty surrounding the property by minimizing the number of unknown factors, thereby mitigating risk significantly for both buyers and investors. Additionally, by taking advantage of insights into market trends and precise data on metrics like time on the market and pricing for a multitude of comparable properties, realtors can more accurately determine the value of a specific property and predict its trajectory over the course of a given time period.
In conjunction with big data analytics, artificial intelligence and machine learning can provide real estate professionals and customers with the necessary insights to make quicker, more informed decisions while simultaneously eliminating the hassles associated with traditionally manual processes such as sifting through public property records in search of purchase prices, title documents and mortgage liens. This notoriously time-consuming operation has been optimized and simplified with the helping hand of computer algorithms, which are capable of processing millions of records in a matter of mere seconds.
Furthermore, the analytical capacity of artificial intelligence has also made it significantly easier for real estate brokers to ‘predict’ future asset and rental values by collecting and analyzing public records, regional crime rate statistics, transit alternatives, and local school ratings in addition to generating a value analysis for each given property. This type of digital evaluation proved to be extremely useful during the peak of the COVID-19 pandemic, when everything was largely placed on lockdown in order to mitigate the spread of the virus. However, the utility of these evaluations will undoubtedly continue to assist real estate brokers beyond the scope of the pandemic when it comes to facilitating comparative market analysis.
Another significant benefit of digital transformation in the real estate industry – and subsequently, the construction industry – is the advent of Building Information Modeling (BIM). BIM is an intelligent 3D model-based process that enables architectural, engineering and construction professionals to effectively plan, design, build and manage properties and assets as efficiently as possible. Property owners, architects and investors alike are already implementing Building Info Modeling in order to significantly reduce the costs associated with construction projects by facilitating collaboration, streamlining workflows and enhancing communication. Additionally, engineers can take advantage of BIM to manage design phases and efficiently model HVAC and energy systems.
All of these real estate innovations facilitated by digital technologies from data analysis to AI and BIM add up to an immensely improved experience for the consumer. In an industry built on the basis of trustworthy relationships, providing an exceptional customer experience is vital to improving customer satisfaction and retention levels as well as ultimately growing a real estate enterprise. The average customer now expects a similarly seamless digital experience across every interaction, regardless of the industry. And, unsurprisingly, home buying seems to be no exception.
Insights derived from big data can help real estate agents better understand the needs of their clients, empowering them to get involved with the buying process more rapidly and to deliver more personalized recommendations based on buyer preferences. Artificial intelligence and computer algorithms offer a degree of speed and efficiency that were previously non-existent with regards to the process of searching for a home, effectively narrowing down search results to only the most suitable homes and suggesting individualized alternative listings based on the information provided. And finally, Building Info Modeling – in conjunction with virtual and augmented reality – enables real estate companies to provide prospective buyers with comprehensive and realistic visualizations of properties that have yet to be seen or even built, facilitating a unique and convenient experience all from the click of a mouse.
Digital transformation has had a profoundly positive effect on the real estate sector in the last few years. The coronavirus pandemic has illustrated that the strength of a business or industry lies in its inherent ability to adapt, maintain operational resilience, embrace newly emerging technologies, and ultimately prioritize the consumer experience. Real estate companies that are able to quickly adapt and keep up with the rapid pace of these transformations stand a greater chance of becoming industry leaders in the U.S. market and beyond. And those who are unable to meet the demands of a rapidly evolving real estate landscape will continue to struggle as traditional business models gradually fade into obscurity.
