Real estate is the king of global assets. It outpaces all other forms of investment and wealth management by a wide margin.
To illustrate the point, consider that by 2016, global real estate represented $217 trillion in value. When you compare that to the all-time value of global gold reserves, which total only $6 trillion, it’s obvious that real estate has no equal.
The enormous economic value of real estate means that the industry surrounding the transfer of land and property is one of the largest businesses on Earth. This is the case in all corners of the developed world, and there’s no sign of that changing anytime soon.
No surprise then that technology innovators look to gain a foothold in what is a very lucrative industry. Their work is changing the real estate market as we know it. It’s happening in some ways, but here are three of the most interesting examples.
Mobile Apps and Portals
As the adoption rate of smartphones and Internet-connected mobile devices has risen globally in recent years, the technology sector has been finding more and more ways to deliver unique services into the hands of consumers.
In the U.S. market, it began with a wave of online tools to help property owners find trustworthy real estate agents. That trend spread to major markets worldwide, through Europe and to Australia, where sellers began to compare real estate agents online to get the greatest return for their property sale.
However this has just been the beginning, of revolutionizing real estate sales. Since then, there’s been quite a bit of development in collaborative online sales and marketing tools aimed at buyers.
Apps like Compass Real Estate’s Collections aim to provide an all-in-one solution for prospective homebuyers to check out available properties. It features tools that allow shoppers to compare listed properties, discuss features with other potential buyers, and even invite family members to aid in their search. It’s akin to social media for the real estate industry.
In response to the always-on nature of modern society, the real estate industry went in search of a practical way to become a 24/7 operation.
To fill the need, tech companies have started to develop artificial intelligence systems that can power online chatbots for the industry. It’s a winning approach because consumers have started to adopt smart assistants like Apple’s Siri and Amazon’s Alexa, and they’ve grown more comfortable with a conversational interface for technology.
A chatbot allows customers to have complex, detail-rich conversations about properties they’re interested in at any time of the day or night. It also frees up live agents to tend to customers in the latter stages of a sale or purchase.
Blockchain Smart Contracts
There’s also a technological advancement that may be on the verge of revolutionizing the way the global real estate industry works at a foundational level. That advancement is known as the blockchain. It’s the technology that undergirds cryptocurrencies like Bitcoin and Ethereum, and it promises to dramatically lower the costs involved with buying and selling a property.
This is accomplished through the use of smart contracts, which take the place of their analog counterparts.
Once all stakeholders (owners, buyers, lawyers, etc.) are linked via a smart contract, the technology securely executes the real estate transaction through mutual agreement of all involved parties. This process is already playing out in some markets, and proponents expect that it will soon become the default transaction method for real estate worldwide.
The blockchain is revolutionizing the real estate industry in other ways too. For example, the blockchain is integral to decentralizing finance and improving transparency in sales and purchase transactions. For example with the blockchain, there is less need for third parties and intermediaries which will please the customer with lower transaction fees. Plus there will be less fraud with a blockchain land registry database.
The Future is Now
Although the real estate market has been known to be resistant to technology in the past, it’s clear that there’s a rising tide of tools and innovations that will soon leave an indelible mark on the space.
As more buyers and sellers acclimate to using technology to handle property, their demand for the conveniences it entails will force a change in how the industry as a whole does business.
The change will prove to be beneficial to everyone, including those in the real estate business, who should see their profits grow as technology enables them to handle more sales than ever before. That means that despite the astronomical global value that real estate holds now, it is likely that the sky is the limit.