How Gen AI is Reshaping the Landscape: Real Estate and Home Buying
We're discussing the real estate market in part 2 of the General Artificial Intelligence (Gen AI) use case series this week. When I lived in New York City, leasing an apartment through a broker meant paying 12-15% of the annual rent as fees and being sure to plan to live in that apartment for at least a few years to make up for the cost and hassle of finding and moving into an apartment. Buying a house in the United States is a whole different story. From finding an agent to visiting open houses, getting a pre-approved mortgage loan, making an offer, and going through the entire process can take anywhere from 60 to 90 days before you are ready to move.
Over the last few decades, the real estate industry has seen a technological transformation from print media and newspaper listings to online listings and real estate websites. Mobile apps revolutionized the industry, with apps like Zillow, Redfin, Trulia, and Realtor.com allowing for on-the-go property browsing. More recently, Gen AI has been used to develop virtual tours and personalized property marketing campaigns.
As with other industries, the rise of Gen AI is reshaping the modern real estate landscape. There is a lot of potential in all aspects of a home-buying experience, even though the industry has been slow to adopt technology and AI tools.
An analysis from McKinsey Global Institute (MGI) states that Gen AI could generate $110B to $180B or more in value for the real estate industry in the coming years.
The use cases transforming the home-buying experience can span across multiple points of view. Here are a few sample use cases:
Hyper-targeted searches: Gen AI can analyze home buyer preferences, budgets, and lifestyle factors to enhance the search criteria and identify properties beyond basic features. For example, for environmentally conscious buyers, Gen AI can highlight properties with energy-efficient features such as solar panels, smart thermostats, and eco-friendly materials.
Automated tasks: Gen AI-powered chatbots can answer common questions, schedule appointments, and handle basic inquiries, freeing up real estate agent's time. Chatbots are the most common communication use case that enhances the overall customer experience with periodic updates.
Virtual tours: Gen AI combined with AR/VR technology can create immersive virtual tours, changing how buyers explore homes remotely. This innovative approach saves time and effort by narrowing options before scheduling in-person visits.
Virtual renovations: Gen AI can create realistic virtual renovations of properties and generate new ideas for best space utilization.
Virtual staging and targeted property marketing: Gen AI can personalize property photos for specific audiences, offering a highly tailored marketing approach. It can also virtually stage a home with different design styles or modify existing features to help buyers visualize the potential of space, providing a unique and personalized experience.
Market Analysis and Pricing Insights: Gen AI can analyze vast amounts of real estate data to provide insights into market trends, property values, and pricing strategies. This information can empower buyers to make informed decisions and negotiate effectively.
Risk Assessment and Due Diligence: Gen AI can assist buyers in conducting due diligence and risk assessments for properties while making decisions. Analyzing property history, zoning regulations, and potential hazards can help buyers mitigate risks.
Streamlined Documentation Processes: Gen AI can assist in streamlining the paperwork and documentation processes involved in buying a home. It can help buyers understand complex contracts, mortgage agreements, and legal requirements, making the transaction smoother and more transparent.
As I list several Gen AI use cases to make inroads into real estate beyond analytical AI, closing a house requires human intervention to navigate legal and financial hurdles. As Gen AI is evolving, implementing these resources will require product teams to address challenges like data security, privacy, fraud prevention, and the accuracy of the information.
Gen AI undeniably has the potential to transform the real estate industry by creating new experiences, improving efficiency, and generating creative solutions. For instance, it can streamline the home-buying process, enhance property searches, and provide valuable market insights.
References:
Generative AI in Real Estate: Use Cases & Benefits - Scaleupally
RE-generative AI: How technology can transform commercial real estate - Deloitte
Generative AI can change real estate, but the industry must change to reap the benefits - Mckinsey & Company
