Artificial intelligence is disrupting the global real estate industry. Most of the high-end realtors are now incorporating data pipelines and algorithms into their decision-making process, and the results are telling. Information management is the key application of AI in the real estate industry.
Let’s find out how exactly AI and ML are changing real estate.
Predicting property prices
AI has applications in estimating the market value of properties and predicting their future price trajectory. For example, ML algorithms combine current market data and public information such as mobility metrics, crime rates, schools, and buying trends to arrive at the best pricing strategy.
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The AI uses a regression algorithm– accounting for property features such as size, number of rooms, property age, home quality characteristics, and macroeconomic demographics–to calculate the best price range. To wit, the AI algorithms can predict the prices based on the geographic location or future development.
Online real estate marketplace Zillow puts out home valuations for 104 million homes across the US. The company, founded by former Microsoft executives, uses cutting edge statistical and machine learning models to vet hundreds of data points for individual homes. Zillow employs a neural network-based model to extract insights from huge swathes of data and tax assessor records and direct feeds from hundreds of multiple listing services and brokerages.
Another calculator, Home Union’s RENTestimate, is an automated valuation model to determine a property’s rent value. Similarly, Airbnb’s pricing tips use a mathematical model that learns how likely a guest is to book a specific listing, on particular dates, at a range of different prices.
Chatbots, AI-enabled consumer apps and machine learning interfaces are used to collect customer data and help with lead generation for marketing campaigns for realtors. According to marketing specialist Melanie Sovamm, a chatbot can double as a virtual assistant and also deliver personalised content to clients.
Companies like Appfolio offer cloud-based property management software solutions, services, and data analytics to the real estate vertical. The solution centralises critical data to attract and retain tenants for properties. US-based Buildium provides software for real estate professionals to manage property portfolios, including leasing, accounting and operations. Meanwhile, Zenplace Inc uses a chatbot via Amazon Alexa to answer basic questions related to the rented properties and allows customers to pay their utility bills.
Property analysis and recommendation
AI-powered software improves the ability of a business to provide accurate and comprehensive information about the property to clients. The algorithms parse the conversational data to recommend properties to the customers.
The US company Localize uses AI to fact-check apartment listings. The algorithms take aspects like nearby schools, transportation, light sources, disturbances etc into account to profile a listing. For instance, it verifies real estate agents advertisements of “sunny” properties by looking into seasonal light variations and the time of day when the apartment catches the most sun.
Similarly, New York headquartered Skyline utilises machine learning technologies to analyse data from multiple sources and find the best real estate deals that consider parameters such as the asset’s condition, quality of management, and access to public facilities.
The Indian real estate industry is leveraging artificial intelligence to manage problems related to safety and construction of properties. Tradecost, an Indian industry conservation company, uses AI for environmental health and safety. It’s predictive RF model acts as a safety indicator to flag risky construction sites. The ML model provides monthly reports of a project’s safety performance to facilitate preemptive interventions.
In 2008, the Government of India launched the ‘Digital India Land Records Modernization Programme’ to create a system guaranteeing conclusive titles to immovable properties. The program uses AI and IoT to streamline the process.
Rental platform NestAway uses predictive analysis and artificial intelligence to recommend properties to customers. Its counterpart NoBroker uses ML algorithms to sort the listings to match tenants and landlords. NoBroker’s self-learning algorithm becomes more powerful with every transaction. The system has street level accuracy to predict the rent of a property.
Inarguably, AI is primed to upend the real estate industry. The most recent technological development in the real estate landscape is virtual tours. Virtual tours and virtual reality allow the customers to follow 3D views of the property online. This is especially beneficial for remote & abroad properties and those still under construction. Virtual tours that include options for zoom in, panorama and spoken notes, act as an easy and cost-effective way to conduct landlord-tenant meetings.