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Will Your Dream Home Find You in 2026? How AI Will Transform Real Estate?

It’s a gloomy day in 2026, you are working remotely and suddenly a notification pops up on your phone. You look into the notification and it says “Property Found”. 

Browsing the property, only one thing comes into your mind, is this for real? Well, you did not expect this at least not this soon. 

It was just in the morning when you installed a property app on your mobile phone and entered “$800K house in California with two bedrooms and a beautiful backyard”. Entering the property specification you just realized that the property search has moved time ahead, right?

No more manually filtering property through location, cost, and other minor details. 

Well, what’s more surprising is that you find several properties recommended to you that exactly match your needs. Only moments after you enter the search query, as the properties exist only for you and no one else. 

Now the only thing you doubt is whether the properties are worth investing in and whether will it even exist till you analyze it, visit the property, negotiate, and finally make a decision on it. 

But in the meantime what if? 

You also could get to know the approximate net worth of the property right at the moment that’s based on factors such as location, price range, property type, and amenities.

You also could get the valuation of properties similar to your recommended one in the same locations, allowing you to compare.

You also can visit the property through Virtual Tours and 3D Models so that you don’t need to take a leave from your busy schedule.

You also can get the approximate value of the property in each of the coming years to decide whether the property is worth investment.

But, the question today in 2024 is will this gloomy day in 2026 really exist? If YES, How? 

Real Estate Industry: An Overview

Nearly 80% of Americans consider purchasing a home as one of the greatest goals to achieve in their lifetime. Also, 90% of the world’s millionaires exist because of real estate. These two lines somewhat explain the significance, scope, and scenario of the real estate industry.

According to reports from IMARC, the global real estate market size reached US$ 7,239 Billion in 2023. In addition, the global real estate market is expected to reach US$ 8,654 Billion by 2032, exhibiting a growth rate (CAGR) of 1.9% during 2024-2032.

Mortgages rates going high

After mortgage rates reached 23 year-highs, in the fall of 2023, and residential real estate hit its highest price level, they are slowly dropping.

While the home-buying challenges are not expected to leave any time soon, real estate experts are optimistic that mortgage rates will drop further in 2024.

Despite all of these events, the demand for suburban properties in the United States is still experiencing a surge—a huge thanks to people working remotely.

Technology in Real Estate: The Beginning

A lawsuit was filed against the National Association of Realtors (NAR) by the Department of Justice’s Antitrust Division in 2005. The lawsuit claimed that the policy of NAR obstructed real estate brokers who used innovative internet-based tools to provide better services and lower costs to the consumers (buyers). 

So, what was the policy of the National Association of Realtors (NAR) that obstructed real estate brokers who were using innovative internet-based tools? The policy regarding MLS.

Founded in 1908 the primary goal of the National Association of Realtors (NAR) was to bring brokers and real estate agents together to sell homes. After the great depression, the real estate market boomed in the 1940s and 1950s. This was mainly because of the soldiers returning home after the end of World War II. Until this time the agents and sellers used radio and newspaper ads to list houses and property on sale.

National Association of Realtors

The concept of Multiple Listing Services(MLS) was introduced in the early 1960s by the National Association of Realtors. MLS was a B2B tool that was created by brokers to help each other share information regarding properties. In the early days, MLS used to be a catalog that was delivered to realtors once or twice a month.

While the MLS would have information regarding properties available, this information was treated like an asset by the brokers. The information would not be made public to buyers and sellers. They would need to visit a broker’s office to find out the properties.

It was around 1994 when the first online property listing began. It was similar to newspaper ads where brokers used to place pictures about the property and their addresses. However, the case was the same, buyers and sellers would not be still able to access the information regarding the listing in the MLS. The information would be available to brokers only.

The information asymmetry between brokerage and clients was realized by some tech entrepreneurs in the early 2000s. This gave birth to the concept of internet-based real estate firms. The firms that had the vision to create transparency regarding the properties to the buyers and sellers that were limited to brokers only.

However, broker-controlled MLS associations identified this vision of transparency as a threat. This could potentially allow buyers and sellers to access all the data which in turn might affect brokers’ business. Also, this was a threat to the broker’s traditional value proposition.

The solution they got to mitigate this threat was to deny access to internet-based real estate firms to MLS i.e. they denied membership of those firms. 

The outcome of this step was simple, internet-based brokers without membership would not be able to access the listings on MLS. And without that, there was no chance to operate and compete with other brokerages. 

Taking this into consideration, the lawsuit was filed against the National Association of Realtors in 2005. 

The lawsuit was settled in the year 2008 which led NAR to repel their anti-competitive policies. They were made to guarantee equal treatment to internet-based brokerages in the MLS.

So, did the internet-based real estate have access to MLS? It’s both a YES and a NO. 

Redfin House for Sale

Yes, because internet-based brokerage firms such as Redfin are in place today to help home searchers find properties online. 

No, because there still exists some level of restriction on the ability of internet-based brokerages to display listing information. This means that most of the MLS data today is still inaccessible to brokerage firms restricting full transparency of property listing between buyers and sellers. 

But, Zillow and Trulia have property listings even though they are property aggregator sites and not brokerages, how? They do have listings that heavily depend upon the individual broker firm’s feeds or postings. One of the primary reasons for this is they do not have direct access to MLS. This might also be the reason for instances when information about listed property is complained to be inaccurate and limited. 

So, now here comes the question. 

When the internet-based real-estate brokerages managed to get a membership and have access to the MLS feed and with the traditional brokerages already with the data in the MLS, both of them stood on the same ground. But internet-based brokerages with the adoption of technology would have a competitive advantage at the upright.

To make up for this, traditional brokerages need to have adopted the latest technology. This would have created competition in the adoption of technology and real estate could have been one of the earliest industries to adopt technology. However, this did not happen. Why?

The Gap: Real Estate and Technology 

Adopting technology in an industry that has been operating traditionally through papers, faxes, and more of all that involves high human sentiment is difficult. But what makes it more even difficult are the questions real estate industry leaders ask and doubt themselves:

  • The investment in technology can be costly. Can it provide enough Return On Investment (ROI) to the firm in the long run? – The ROI Doubt
  • Real estate firms and their employees have been following the traditional real estate way, the pen and paper along with word-to-word marketing for decades. Will they be able to adapt to the newly integrated technology? Won’t this affect workflow? – The Change Doubt
  • The technology today relies heavily upon data. Regulatory compliance is much stricter in the real estate industry. Will the adoption of technology be a reason for data breaches? – The Data Security Doubt

Again here comes the next question. All of these issues have been in other industries too. Whether it be healthcare or retail, the initial adoption of technology has been costly. Professionals in these industries were also reluctant to change, and yes of course data of all industries are significant. 

However, these industries were able to adapt to technology but real estate lagged why? The Trust Doubt

Real Estate involves a significant amount of trust between the parties involved. Whether it be between the brokerage firms and their clients or between the brokerage firms themselves. 

man saving for home

For instance, if you shop on Amazon, you will without any hesitation add items as per your wish to your cart and then enter your card details, checkout, and then get ready for the product to be delivered to your doorstep. Now, imagine would you have done the same if it was a property? 

So, here’s the point. Real Estate firms or brokerage firms run their business which largely depends on their client’s trust. So, when they think of adopting new technology they often question themselves: can they trust any third-party companies to build real estate technology products for them? What if the third-party provider fails to deliver as expected?   

This is where the real gap exists – the Gap Between Domain Expertise and Technological  Literacy.

In most cases, real estate firms seek individuals who have extensive expertise in both the real estate industry and technology. This means an individual with years of experience in both real estate and a deep understanding of software product development. These firms look for such individuals to potentially serve as their Chief Technology Officer (CTO) if they are considering establishing an in-house team. 

However, this role is challenging, as developing a real estate software product internally would require considerable time and investment for a brokerage firm. In addition, finding someone who has extensive knowledge of both fields is more challenging.

In other cases, if real estate firms look for a third-party software service provider then there arises a question. Will those software service providers be able to develop a real-estate product that matches the needs of real estate? The domain expertise question along with the cost and return on investment (ROI) problem and data security problem comes here. 

two people shaking hands trusting each other

Now the question here arises is when and how this reluctance of trust between the real estate firms and the technology could be solved. The fulfillment of the gap between domain expertise and technological literacy can lead to a build-up of trust. This ultimately will clear ROI Doubt, Change Doubt, and Data Security Doubt along with other potential doubts. 

Is it too late for Real Estate? – The Artificial Intelligence Era

The technology adoption in the real estate industry has been slower when compared to industries such as healthcare and retail. However, it’s not that the real estate industry has completely been reluctant to adopt technology. 

In the present, the real estate industry is moving ahead keeping its eye on “PropTech” which stands for Property Technology. Protech encompasses all the technologies that can be useful for the overall improvement and management of real estate tasks from the beginning to the end. 

VR in Real Estate

Several components play a vital role in shaping PropTech,

  • Online Real Estate Marketplaces
  • Internet of Things (IoT)
  • Property Management Software 
  • Virtual Reality (VR) and Augmented Reality (AR) 
  • Blockchain
  • Artificial Intelligence (AI)

PropTech is a broad term encompassing all the technology from real estate finance to user experience making the real estate industry efficient, transparent, and accessible. 

A KPMG survey shows that in the year between 2022-2023, proptech investment tripled from US$ 4.1 billion to a record high of US$13.4 billion.

While it is important to consider other factors, one significant reason for this significant increase in investment in an industry that was reluctant to adopt technology is due to the rise of Artificial Intelligence in recent years.

Investors in proptech are aware of the capability of AI for the improvement of the entire real estate ecosystem. But why? 

The recent developments in Artificial Intelligence along with its application in other industries are key factors behind this significant increase in proptech investment. 

For example,

In the healthcare industry companies like Google Deepmind have developed CoDoC (Complimentary-driven-Defferal-to-Clinical Workflow). CoDoC is an Artificial Intelligence (AI) system that learns when it should be relying on predictive AI tools or deferring to a clinician when analyzing a medical image for the most accurate interpretation. 

In the Finance Industry, companies are leveraging AI in different areas. This includes areas of financial credit decisions, management of financial risk, personalized banking, and fraud detection to name a few. For example, Ocrolus has developed an AI-driven document automation software that helps to increase accuracy when analyzing financial documents.

In the Retail Industry, companies like Lily AI are in place that have developed AI-powered systems to help retail brands in fashion, beauty, and home improvement. The company claims to have built products with the use of AI to enhance customer experiences by connecting online shoppers with relevant products.

Industries like healthcare, finance, and retail were way ahead in the adoption of technology. At present, they are experimenting with Artificial Intelligence at a pace to bring the best out of the latest technology. Can the real estate industry which was far behind in the adoption of technology match their pace by adopting AI? 

The answer to this question can be ‘YES’ if the real estate industry can bridge the trust gap – the gap between domain expertise and technological literacy.  

The AI Possibility in Real Estate  

AI in real estate

Predictive analysis is considered one of the most difficult tasks for property seekers in real estate. On the other hand virtual staging could take days, but Artificial Intelligence can complete it in a matter of seconds. 

  • Real Estate marketing with AI looks quite promising. 

No more marketing efforts on irrelevant online visitors, who come casually to browse properties online. The Natural Language Processing (NLP) ability of AI can help in the determination of real buyers.

On the other hand, AI-powered chatbots can assist and guide clients to find their desired property. In addition, it can also collect their data and information for future marketing reference.

  • Market Analysis and Predictive Analysis will no longer be a headache.

From evaluating the demand, and supply dynamics to hundreds of competitive factors including property-specific factors such as crime rates in the area that can affect the value of the property. AI can provide a snapshot of the market at a specific time, enabling property seekers to make more informed decisions.

You might find this surprising, but AI in market analysis can consider factors such as the amount of sunlight reaching a particular property.

AI algorithms can analyze past and present trends to forecast future market trends and outcomes. Whether it be changes in property prices, market demand, investment opportunities, or other market dynamics. AI considers all these factors to predict the future value of the property.

  • Game-changing customer experience

With AI-powered solutions in place, personalization in real estate no longer remains a dream. AI-powered tools can track customer’s real-time online searches, past searches, and online behavior. This will help to provide recommendations based on the tracked data making personalization change the online property search game.

Computer Vision and Virtual Staging on the other hand can give property searchers a more in-depth and realistic view of the property they wish to consider. 

  • No More Property Management Hassle 

Whether it be tenant screening or lease management, the scope of property management with AI is promising. AI algorithms and AI-powered systems can assist with property management by analyzing tenant applications, background checks, and credit histories to help property managers make more informed decisions about potential tenants.

Additionally, these systems can streamline lease management processes, including rent collection, lease renewals, and compliance tracking. Also, AI’s capacity to automate and detect issues through the Internet of Things (IoT) and provide recommendations based on its findings can level up the security and efficiency of property management.

What does the future look like? Real Estate with AI

Real estate with AI

With the leverage of AI in real estate, what might have looked like an unachievable dream a few years ago in real estate could be a reality. Here’s an overview of what real estate with AI might look like, 

The property search will continue to evolve with AI. Real estate marketplace companies like Zillow are already leveraging AI in its platform. Zillow’s integration of AI-powered natural language search that lets home shoppers search property in the same way that they would talk to their friends and families is an example.

AI in enhancing customer experience could be a game changer. It can suggest property viewers online based on their past and real-time online behaviors.  In addition, virtual chatbots can assist in their search. Thus, tailoring personalized customer experience will no longer be a dream.

No more need to visit the property physically to find out how it looks. AI-powered tools with computer vision and virtual staging can give you an instant view of the property along with its future look.

Gen Alpha might not have a chance to blame their parents (Millennials and Gen Z) for the real estate investment opportunity loss. Reports suggest that Gen Z (born between the mid-1990s and early 2000s) is a generation of renters after the millennials will be one of the highest investors in real estate. 

Unlike every one friend of millennials who tells his father missed an opportunity to bag the property deal worth millions today. The generation next to Gen Z (Generation Alpha)  might not have a chance to say that. Because with the leverage of AI in real estate Gen Z generation will have almost an accurate prediction of what would be the worth of the property at a specific point in time.

Property management will no longer be an issue. AI algorithms can help in efficient and effective tenant screening and streamlined lease management. On the other hand, AI’s integration with IoT will enhance the security as well as efficiency of your property.

Wrapping Up

The development of AI has opened up numerous opportunities for several industries. This includes real estate too, an industry that has been reluctant to adopt technology. The trust factor resulting from the gap between domain expertise and technological literacy is one of the major reasons contributing to the slow adoption of technology in the real estate industry.

Industries around the globe are keeping a close watch on AI. Several industries are already researching, developing, and using AI to bring the best outcomes through its use. 

With AI still evolving and the best of it still yet to come, now is the perfect time for the real estate industry to take risks, trust and believe in the technology, and move a step ahead to fill both of the gaps. The technology gap in real estate and the gap between domain expertise and technological literacy.

From enhancing property search to simplifying property management, the ability of AI to transform real estate cannot be ignored. With AI leveraged properly in real estate, the day when property seekers can complete an entire real estate deal in their pajamas even without stepping out of their homes seems not so far. 

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