AI and Real Estate by Cody Maly
AI and Real Estate
by Cody Maly
Both Artificial Intelligence (AI) and Machine Learning (ML) have been growing in popularity and their applications have begun to reach the Real Estate world. AI tools that can be used in real estate include predictive analytics, classifiers, generative AI, and computer vision. Overall, these technologies will allow real estate processesto move more quickly, with greater efficiency, and be more precise overall. This can allow for faster deal flow and more optimal transactions for investors, lenders, buyers, and sellers.
There are many practical applications for predictive analytics in real estate. Predictive analytics are when models are trained to historical data to forecast future trends. Applications include analyzing market conditions, property values, rent setting, and other property metrics for investors to make more informed decisions. A current example of this application is Zillow using AI to calculate its “Zestimates” for property prices and different recommendations for property listings. While forecasting tools such as regressionhas been used before, ML predictive analytics allow for improved accuracy to spot trends more specific to the historical data.
Classifiers are another AI that have many applications to real estate. Classifiers are predictive models which specifically classify data into user defined categories. Lenders can use this technology to analyze borrowing information in the underwriting process by inputting information like credit scores, income, and employment history to create a risk profile and whether they are astrong borrower. This has been used by companies like Rocket Companies where they have automated their mortgage approvals and can clear applications in as little as eight minutes.
Generative AI can be applied to real estateas well. Generative AI is the automated creation of tasks.Possible applications include automatically creating listing descriptions,property searches, marketingcontent, and otherrepetitious tasks.Generative AI also allows forthe faster creation of 3D models. Companies like Matterport have created 3D virtual tours of properties before in-person visits as well as augmented reality to see buildings on location before they are constructed. This can give sellers better access to potential buyers and saves them the time of screening uninterested buyers. Generative AI will also help buyers look for specific properties through their search bar. After they search for certain types of properties, the AI will then be able to show them properties related to all of their search terms and not just the isolated term, which gives a more robust and accurate experience to find the right home.
Computer vision also has some promising applications to real estate. Computer Vision is the visual analysis of images to automatically extract information. This technology will be able to analyze property images and videos to automatically identify features like swimming pools, gardens, and decks to make property descriptions more accurate.
Lastly, AI chatbots and smart home automations can be used to help landlords with property management. These chatbots can automatically answer tenant questions about the property, handle complaints, maintenance requests, and collecting rent. This can reduce the work for human agents and help management/tenant interactions to operate more efficiently. Smart home automations can help tenants reduce their costs related to HVAC systems.
In conclusion, there are several AI and ML related tools which can directly impact and benefit the real estate industry. Because real estate involves many financial computations using numbers, it is an industry that AI can more readily be applied to.