Artificial Intelligence is probably going to be the defining moment of this century. It’s impact now spans across a wide range of areas from business to medical applications where it continues to change the face of the industry. Real estate is one area where the impact of artificial intelligence and big data analytics continues to revolutionize the industry. The use of big data analytics is now helping customers and real estate developers make betters decisions based on data and evidence. The stakeholders now have access to a huge volume of information available to them which were previously not accessible to them.
There are many ways through which big data is helping the agents in the real estate sector.
Real Estate Appraisal
The biggest advantage of big data is the volume of information that is available to an average customer or a real estate developer. While data pertaining to the real estate’s facilities are important, crucial data like crime rate and availability of important services like school and hospitals can now be incorporated into the valuation of the property which can help to improve the valuation of the property. This can help real estate developers to value their properties more accurately by incorporating exogenous factors while customers are able to get a truer picture of the actual value of the property
Furthermore, other subtle trends like the development of a new plaza or an airport can change the value of the properties drastically. This is where the power of big data analytics can be harnessed to improve the valuation of the property. According to a research conducted by McKinsey & Company nearly 60% of a property’s values comes from non-traditional factors. These factors can include the number of swimming pools in close proximity or the tone of yelp reviews of businesses nearby.This information can also be used by investors to identify misvalued properties which can them decisions that can improve
Marketing and Business Development
Realtors can use digital marketing and search engine information to help identify prospective buyers. Global companies are now digitising the process of sales which helps track data on user visits and searches. This data can be used in a variety of ways to help pair customers with real estate sellers.
Realtors can further use this information to understand their prospective their consumer better and contact them at the precise moment to make them a tempting offer. Furthermore, social media is also being increasingly used to advertise real estate properties to prospective consumers. The biggest advantage of using social media advertisement is the huge amount of data available to these companies actually helps in targeting the customers more efficiently.
Real Estate Mortgage & Insurance
The last few years has seen the development of complex machine learning algorithms to predict trends and drive analysis. Big data analytics and AI have helped mortgage issuers and insurance advisors in assessing the risks of the transaction by incorporating factors such as state of the industry, the applicant’s household income and his credit scores. These machine learning algorithms have become more complex which has resulted in the models becoming more robust and accurate.
Similar to real estate appraisals, insurance and mortgage issuers now can incorporate a greater number of factors into their models to get a better picture of the transaction being done. This helps insurance and mortgage issuers mitigate the risks associated with issuing mortgages as risks can be identified more accurately
These are just a few ways in which big data and AI is making lives easier for parties involved in the real estate sector. Big data and analytics is also helping governments around the world in making better decisions in regards to property development and infrastructure planning.
The Future of AI in Real Estate
It is fair to say that the role of big data is going to become more visible in the coming decades. However, at the same time it is also important to be cautious and understand the risks associated with artificial intelligence and big data. One of the biggest risks that comes with big data is maintaining data security and privacy. With such a huge volume of data being available to the so many parties it is important to build a robust data security mechanism that ensures data security and privacy. At the same time, investors realtors and consumers need to learn to harness these tools where it does not breach the right of any other party. The role of governments in ensuring that data security laws are maintained is also going to become more important with the increased interference of big data and AI in real estate.