CEO and cofounder of Mashvisor, a real estate data analytics company that helps even beginners make profitable investments in minutes.
Just a few weeks away from 2023, all eyes in the real estate industry are turning to the new year. This is understandable considering the turmoil that we’ve experienced since 2020.
Despite the turbulence of the last couple of years, I think it is safe to say that the real estate industry as a whole has weathered the storm relatively well, and this is—at least partially—owing to technology advancements and tools that supported all stakeholders during these tough times.
Agents, investors, homeowners, lenders, property managers and real estate entrepreneurs are all better off because of technology. So, the question that should come naturally to the minds of many players in the industry is: What further tech developments can we expect in the coming year? In this article, I will answer this question by looking at the five tech trends that could dominate real estate in 2023.
The use of virtual reality (VR) and augmented reality (AR) is not a new trend, but it is something that the pandemic has definitely accelerated. Amid closure policies, many agents and property owners had to resort to virtual property tours as the best alternative to live showings. This practice exhibited major benefits over traditional property showings, demonstrating its potential in the future as well.
A Matterport survey shows that listings with 3D virtual walkthrough close 31% faster and sell for up to 9% more.
Expect the use of VR and AR in real estate to continue expanding, especially among investors. While homebuyers might be more prompted to visit their future home and feel the atmosphere before buying, 3D tours and walk-throughs usually meet the needs and requirements of investors.
Moreover, VR will be increasingly used not only in real estate sales but also in the rental business. A growing number of landlords and short-term rental hosts provide virtual tours with their listings to attract renters. Soon, because of the success mentioned in the Matterport survey, this could become the norm for rental listings.
The development of artificial intelligence (AI) has been on-going for decades in the real estate technology industry, and there have been major advancements in recent years. For example, property investors are able to find and analyze deals at a rate and speed previously unimaginable. This has been enabled by AI and big data.
One newly emerging trend that I expect to see more of in 2023 and beyond is quantum computing AI. The global quantum computing market size is forecast to expand from $470 million in 2021 to $1,765 million in 2026, and this is still probably just the tip of the iceberg. This relatively new technology has seen only limited application in real estate. However, I believe the potential is huge, so we could see more and more PropTech startups and companies apply quantum in their algorithms, as the technology develops.
Streamlining Of All Processes
Enhanced efficiency is by far the most important benefit of the recent boom of technology in real estate. Real estate agents, brokers, lenders, property managers, investors and even homebuyers and sellers have been able to automate many tedious day-to-day responsibilities, allowing them to complete tasks faster and better than ever before.
While a lot of CRM applications currently cover different aspects of real estate, I expect to see a further surge in comprehensive platforms that take a certain niche or cover everything, from A to Z, in 2023 and beyond. There’s a lot of potential in streamlining processes as the demand is huge among various real estate professionals.
Another exciting real estate tech trend that will continue to grow in 2023 is fractional investment. Again, this is not something new in real estate as investors have been using syndication, real estate investment trust (REITs) and other forms of partnerships to own shares of real estate assets for decades. However, technology is further accelerating this trend in a way that many see as the democratization of the real estate market.
In the past, even with fractional ownership, investors needed to have solid amounts of initial capital to get started. For instance, most REITs have a minimum capital requirement of $25,000 in addition to working only with accredited investors. Now there are a number of PropTech platforms that allow investors to invest in parts of real estate properties with smaller investments. This can help assure that more people have access to investing in real estate.
The last major technology trend I expect to drive real estate in 2023 is the additional growth of virtual real estate and investment opportunities there. The global metaverse real estate market alone was valued at $821.9 million in 2021, with a projected increase to $5.95 billion by 2028.
This growth is supported by developments in other real estate tech trends like VR, AR and the introduction of blockchain technology to real estate. Nonetheless, buying assets in a virtual world is still a relatively new concept, so investors will likely continue to proceed cautiously, as the metaverse offers a unique way to diversify your portfolios, but they might consider it ill-advised to shift all their investments from physical real estate to virtual properties.
Next year promises to be another exciting year in real estate, and technology will play a major role.
As with the shutdowns during the pandemic, though, real estate professionals should be open to new technology and try to understand how it could increase their efficiency, efficacy and bottom line. Otherwise, they risk being pushed out of the market by those willing to adopt tech tools.