Has the hot topic of technology disrupted real estate?
How many times have you heard about the latest technology or new company “disrupting” an industry? The real estate industry hasn’t seen any significantly disruptive innovation; the edges of existing processes have evolved, a bit. Did We-Work “disrupt” leasing? Nope. They simply added some Silicon Valley sizzle to an existing economic model. Has Zillow “disrupted” the industry? Not really, but they have raised some eyebrows.
A Love-Hate Relationship
Early on, Zillow fed real estate agents new customers and business. That relationship soured over time when Zillow entered into agreements to syndicate listings and charged the very same agents for their own listings. The same technology that feeds agents can also eat them. To Zillow’s credit, they forced the hand of complacent national brokerage houses, agents, and the National Association of Realtors1. Some are modernizing and developing technology, but aside from searching online, most real estate is largely bought, sold, and leased the same way it has been for ages.
Real estate remains transactional, superfluous, and mostly paper based. It is opposite of my previous profession as an industrial engineer. Automation was essential in manufacturing for profitability. Interfaces that displayed real time input were common. Programmable Logic Controllers used sensors to control conveyors, pumps, valves, and other equipment in sequence to move raw materials and transform them into value-add products.
Akin to those industrial technologies are affordable consumer options. The Internet of Things (IoT) is seeing an explosion by makers and tinkerers. Inexpensive controllers, visual programming code and stock sensors, combined with 3D printing, spawned a new era of creativity.
The real estate industry is on the cusp of industry-changing technologies as well. Familiar products using these concepts include Nest, Ring Doorbell and August Locks. While many of those items are nice to have, demand for “luxury” isn’t going to sufficiently tip the market. The average consumer really doesn’t care if they can open and close their window blinds remotely.
Unrealized potential will see a sprint, then consolidation.
In the near-term, I foresee innovations spawning new applications for everyday residential real estate. Once that code is cracked, the floodgates will open, and a proliferation of interesting innovations will reveal themselves, adding value to our industry.
Technology is everywhere. Our lives are intertwined to the extent that we are unconscious to the “data exhaust” we emit. It’s inevitable the real estate industry will see significant change, using technology in unconventional and creative ways to span knowledge gaps; increase safety and legal compliance; reduce evictions, better use natural resources and improve conservation; ameliorate affordable housing cost burdens; and promote healthier homes capable of having significant effects to solve real world problems.