PropTech is all the rage in the real estate business these days. If you’re unfamiliar, PropTech, or Property Technology, is the transition of the real estate market towards the use of efficient digital systems to find new consumption patterns.
It was beginning to become a greater part of the real estate business a few years ago, but really exploded during the pandemic last year as the demand for housing skyrocketed.
“This is a development that’s been a long-time coming,” said Regan McGee, the founder of the digital real estate marketplace Nobul, which lets real estate agents compete for clients. “The real estate industry is awash in data, yet we as a sector have not really embraced the tools available to leverage that flood of information. But, when the real estate market really started to heat up last year, we as an industry finally started to see the light and embrace the benefits that data analytics have to offer.”
Real estate is the largest asset class in the United States. It’s also one of the most competitive industries in the country. So it’s no wonder that real estate agents have started turning toward PropTech and its analytics to make navigating the market easier and more efficient.
PropTech can take on many different forms, from online ticketing systems for property renters to Docusign leases to 3D tours of properties. One of the most exciting developments has been the increasing use of artificial intelligence and machine learning techniques to guide real estate investors in choosing properties.
“For so long, the real estate industry has been in the dark ages,” McGee added. “But finally we’re stepping into the light and seeing that business can be conducted much faster and better using these digital tools and techniques that are commonplace in other industries.”
To give you a sense of how advanced ProTech has become, research by McKinsey recently found that real estate applications based on machine-learning models can predict changes in rent with up to 90 percent accuracy. That’s a huge advancement that allows investors to better choose where to buy.
Another major advancement we’re seeing is in the development of mobile apps. Millennials, one of the hottest customer bases for real estate, are particularly attached to their phones, so real estate firms are finding that if they want to connect with them, they have to be where they’re at.
But these apps offer more than just a convenient user interface. They’re able to be updated in real time, making it so that app users can stay informed on market conditions. With the real estate market as competitive as it is these days, real-time information can be the difference between landing the home of your dreams or missing out – and millennial homebuyers in particular recognize that.
“The great thing about the real estate industry’s recent embrace of Big Data and all things digital is that we’re now able to be so much more current with our customers,” McGee said. “That matters tremendously when the market is as hot as it is right now. But, more importantly, customers have come to expect that kind of immediacy. They get it with Uber, which can tell you within minutes when your driver is coming to pick you up. And they get it with Amazon, which can tell you almost exactly when your package is going to arrive.”
Homebuyers today expect up-to-the-minute data because they can get it virtually every other customer experience, he added.
“I’m so glad we as an industry are finally embracing this trend,” Regan McGee added.