Let’s find out who and why uses neural networks and whether they can replace realtors in the future.
Artificial intelligence (AI) is gradually entering all areas of our lives, and the real estate market is no exception. It is thanks to AI that computers learn from their own experience, adapt to given parameters, and perform tasks that were previously only humanly possible.
But it is not a single technology. Artificial intelligence refers to any algorithm based on machine learning (ML) principles. In essence, it is a self-learning software product on large databases that identifies connections and patterns.
How AI is being used in real estate
Neural networks (the main area of AI implementation) benefit a variety of real estate market participants. With their help, developers, management companies, and real estate agencies solve important applied tasks automatically:
- from databases;
- conduct marketing surveys;
- perform competitive and statistical analysis;
- estimate demand and sales rates;
- automate call centers.
As a rule, such technologies are outsourced because you need to have a whole team of software development professionals. Thankfully, today it is possible to find a good Real Estate Software Development Company.
Machine intelligence also helps investors looking for real estate to invest in. For example, real estate agencies are already making ratings of the best and worst locations in big cities regarding quality of life with the help of set algorithms that include dozens of parameters. AI shows the highest and lowest infrastructure index in a certain neighborhood. The results often surprise experts, but the program always has its own opinion.
Banks are also interested in artificial intelligence, as they are becoming more and more important players in the market after the transition to escrow accounts. Financiers also want to understand the real value of apartments and forecast trends clearly. And, of course, to assess the creditworthiness of borrowers.
Neural networks have also been used by ordinary homeowners, for example, to find out the market value of an apartment before selling it. Smart real estate search technologies, which have many filters and use their own databases, have greatly simplified and accelerated the process of buying, selling, and renting. Today, such services are available on all popular real estate aggregators.
For example, in the United States, many large companies conduct transactions at prices that are calculated and predicted by a computer. As early as 2019, AI technology was used to buy and sell 30,000 homes worth $7.5 billion. This is about 1% of the entire US private home market, which means the growth potential is huge. Experts believe that in ten years, about 10% of homeownership will be sold through market makers.
A soulless machine
Some AI startups claim that neural networks will finally remove realtors and brokers from the market. However, professional players do not agree with this.
Artificial intelligence is unlikely to be able to fully replace real estate professionals. The realtor profession will remain in demand, as AI cannot talk to a client in a heart-to-heart manner, find out their “subtle” preferences, and help them conduct a transaction in a purely psychological way. Man is a social creature, he needs live communication.
In other words, a “soulless machine” cannot replace the luxury of human communication. Recent surveys have shown that among apartment selection services, people prefer those with live communication. And too many “digitized” services were called inconvenient.
Thus, buyers are not ready to transfer the entire transaction process online. For the time being, it is calmer, more reliable, and more comfortable for them to communicate with real people than with a robot. This is why realtors should not be afraid of digital development. Artificial intelligence will not replace them, but, on the contrary, can be a good help in selecting apartment options, analyzing prices, and other routine work.
Digital is the future
For all the current shortcomings of AI, many experts are convinced that digitalization is the future. Some even claim that new technologies will literally “explode the real estate market.
Thus, according to experts, digital analytics in real estate will make the market more transparent and faster, and apartments will no longer be considered illiquid goods. They predict that AI will learn to analyze the prospects of price changes in different subjects, which means that it will be easier for people to buy real estate not only within their city, but also in the place where they would like to live (for example, by the sea), or simply in more promising regions. This trend has already developed in Europe and the USA.
In general, the emergence of a really significant mass of products and developments in the field of artificial intelligence is expected within three to five years. That is when we will notice how the real estate market is changing.
