We’ve rounded up some of the latest and greatest digital real estate trends this year, to provide some inspiration for those embarking on a digital transformation of their own.
Digital transformation has been a prominent buzzword for over a decade. But the truth is, that it is so much more than just a buzzword. It is an unavoidable prerequisite to any company looking to gain and maintain a competitive advantage, and in some industries, it is the only way to guarantee long-term survival.
In spite of being one of the wealthiest and most well-established industries, digital transformation hasn’t been as rapid or complete within real estate as it has been in other industries. Many old-fashioned, outdated processes and tools are unfortunately still in use today, and as a result, the experience for real estate customers is far from ideal.
Nonetheless, no industry can remain blind to the digital revolution that is taking place across the globe, so real estate has had no choice but to make a start on their own transformation. This early transformation has allowed for a flood of innovations and solutions that have already proven successful in other industries, to make their way into the real estate sphere.
The few real estate businesses that are already getting it right are using modern, revolutionary technologies to improve their customers’ experience, gain efficiencies, and ultimately grow their bottom line.
The trends we will discuss in this article provide some insight into just a few of the innovations embraced by these industry leaders, in an effort to help others with their own transformations.
But first of all, let’s recap what digital transformation actually means.
What Does Digital Transformation Mean?
In the simplest terms, digital transformation is the process of integrating digital technologies into existing business processes, customer journeys, and company culture as a whole. The aim of digital transformation is to modify all those aspects to be more streamlined, efficient, and ultimately profitable.
Every company wishing to transform from traditional to digital must address the three key pillars of digital transformation: company culture, data and technology systems, and customer relationships. This isn’t an overnight change, but rather a process. Once that requires extensive planning, investment, and dedication.
According to IDC, spending on digital transformation worldwide will be as high as $2.3 trillion in 2023, making it clear that it is to remain a chief priority for many industries for years to come.
While to some degree, the real estate industry as a whole has been transforming at a much slower rate than industries like retail and financial services, for example, some promising trends are starting to take off.
Let’s summarise some of the most prominent real estate technology trends observed in the industry over the past few years.
Digital Real Estate Transformation Trends
Currently emerging trends in real estate include Virtual Reality (VR), Blockchain, Mobile Apps, and Artificial Intelligence (AI). Let’s dive into each one in more detail.
Virtual Reality in Real Estate
Put simply, VR transports users to other, real-world or fictional views. VR game-console goggles are the most common example of this type of technology.
We have witnessed some great applications of VR in real estate:
- VR tours – Virtual property tours (via web UI or VR headsets) are a wonderful way to allow prospective buyers or renters to view properties remotely.
- 360° tours – Similarly, many hotels and resorts have embraced these technologies to bring their guests ground-breaking 360° virtual tours.
To make this possible, these technologies had to evolve to become more accessible. VR had to be made available directly on mobile devices rather than traditional headsets.
COVID-19, and the challenges that came with it, have presented a real opportunity and need for VR to become strongly embedded in real estate, allowing the industry to continue operating in spite of restrictions. Real estate businesses who have embraced VR ahead of time reaped the benefits as they continued to operate smoothly throughout the pandemic.
Some other benefits of using VR in real estate include:
- Reaching buyers anywhere, anytime. Not just during a pandemic.
- Cutting costs by reducing the need for in-person inspections and open houses.
- Capturing much more information and angles than simple 2D photos.
- Creating a deeper emotional connection with buyers.
Many experts are confident that VR will have a strong influence on the future of real estate, so make sure that you become familiar with it and understand how it can work within your business.
Blockchain in Real Estate
Blockchain is still somewhat of a mystery to many. What started as the record-keeping technology behind digital currencies (think Bitcoin), now has applications across many different industries.
In very simple terms, blockchain is a decentralized, public ledger that allows for records to be stored online without actually belonging to any single owner.
Blockchain is expected to be widely used across digital real estate and asset management in the next few years. Some examples of current uses of Blockchain in real estate include:
- The transfer and storing of titles – During purchase or sale of land or property, titles can be transferred and stored on the blockchain network making it a far more streamlined and transparent process.
- Storing of wills or inheritance – The blockchain network could be used to store an individual’s will or inheritance, improving transparency and eliminating all ambiguity relating to the legal ownership of assets.
- Tokenization – Blockchain technology allows for digital real estate assets to be tokenized, meaning they can be represented by digital assets. This, in turn, contributes to more secure and compliant digital processes around these assets, including capital raising, trading, and management.
One example of such blockchain-based asset digitization is the Security Token Offerings (STOs). Security Token Offerings (STOs) are public offerings in which digital securities known as security tokens are sold in cryptocurrency exchanges or more dedicated dashboards.
STOs allow real estate public offerings to be made in a secure and regulated manner, by allowing asset owners to digitize their real estate properties and turn them into Ethereum tokens. These tokens can then be offered publicly. The benefit of this process is that it creates a variety of verification methods to ensure all sources of fraud are eliminated.
As you can see, the benefits of using blockchain in real estate are numerous. To summarise, some benefits include:
- Enhance safety and security;
- Streamlining of processes, and improved efficiency and transparency;
- Drastic reduction in paperwork and administration;
- Simplified contracting and reduction in the use of middlemen (e.g. attorneys).
Smartphone apps don’t require an introduction. With over 3 billion smartphone users in the world today, all spending the majority of their mobile time in-app, they are well and truly a central part of our lives now.
From Facebook and Instagram, to Uber and Netflix, mobile apps provide a mobile-friendly interface for users, while also allowing businesses to use mobile features to their advantage. Push notifications, camera/GPS integration, customer engagement, and automatic updates are all major benefits of offering a mobile app in addition to your website.
This is another technology that has had the power to make or break real estate businesses throughout the COVID-19 period. Benefits of using mobile app technology in real estate include:
- Live interactions. Apps allow users who are actively searching for a home to receive live updates regarding sale status, inspection time changes, suggestions of homes that fit their search criteria, and much more. Popular apps like Realtor.com and Zillow are great examples.
- Use of other technologies. Mobile applications enable the use of some other, more advanced technologies such as Virtual Reality, for example. This unprecedented advancement has allowed for the entire industry to be more or less fully operational even during string distancing laws.
- Stronger brand. Downloading an app is a form of a commitment, which can enhance your relationship with your clients and ensure brand loyalty.
If app development has always been in your pipeline but has taken a back seat due to the amount of time and investment required, you may want to consider building a Progressive Web App (PWA) instead. This type of app is essentially a hybrid of a webpage and an app, offering both the convenience of web browsers and the look and feel of mobile apps. PWAs can be developed in a much shorter period of time and doesn’t need to be submitted through an app store, so it’s a great option for those needing to become mobile quickly.
AI in Real Estate
Most of us associate Artificial intelligence with robots, but in fact, it could refer to any digital device which has the ability to perform tasks that require some degree of intelligence. Whether you realize it or not, AI-enabled devices have already made their way into virtually every aspect of your life.
Common uses of AI that many of us are closely familiar with include:
- Siri – Apple’s voice-activated mobile personal assistant
- Alexa – Amazon’s voice-activated smart home assistant
- Streaming services (e.g. Netflix and Amazon Prime)
- Self-driving vehicles (e.g. Tesla)
Many of the systems above use advanced machine learning software with complex behavioral algorithms that help them understand our likes and dislikes. Such technology is already proving to be invaluable in industries like real estate.
While the use of AI in real estate is still in its early stages, there are some applications of AI that are already being observed:
- Data management and automation. The AI-powered TRIRIGA solution by IBM, for example, helps improve efficiency in real estate management by intelligently gathering data from various sources, then analyzing it to provide valuable insights regarding occupancy levels, etc. This helps prevent space underutilization while saving thousands of dollars in unnecessary manual data collection and analysis.
- Real estate digital marketing. This all-important area has also immensely improved since the introduction of such AI data tools. With much deeper insights and a more accurate picture of their buyers and sellers, marketers can be much more targeted in their advertising efforts, while spending less.
- Improved relevance. Tools like Trulia, an online digital real estate marketplace, uses AI-based computer vision to take the filtering to the next level. Trulia extracts information about the buyer’s preferences from their photos, allowing it to gain detailed information about the buyer’s preferences, and in turn to personalize its recommendations to the user in a way that was never possible before.
- Efficiency and sustainability. Just like many technologically-inclined individuals out there use smart home devices to help reduce their utility bills, real estate managers can use tools like Gridium to help save energy and lead sustainability within their properties. Companies like LinkedIn, for example, have saved tens of thousands of dollars in operational costs using this technology.
Conclusion: How to get started
Although many aspects of real estate will continue to be about face-to-face interactions and relationship building, the majority of interactions and transactions are moving into the digital and mobile world. To remain competitive in such a saturated industry one must realize and embrace this fact.
Moreover, 2020 has made it clear that going digital is no longer just an option. With all of its challenges, this year has also presented a real opportunity for companies to take charge and future-proof their business. Now is the time to be developing, evolving, and introducing new technologies to your staff and customers.
And while it may be easier said than done, we genuinely believe that with some fresh ideas (like the ones discussed in this blog) and the right support, even the smallest real estate firms can grow into prominent online powerhouses.
So get started now to make sure that your business emerges from this pandemic a strong and confident digital real estate leader.