Residential Real Estate is the world’s largest asset class, tipping the scales at a collective value of $190 Trillion globally. Not only is this asset class important because of its sheer size but, also, because a dwelling is often a family’s single largest investment; often, it is also the most important.
Residential Real Estate (RRE) also plays a bellwether role in many economies. As goes Real Estate, so goes the entire Economy. No better example of this need be adduced than the financial crisis of 2008-2009 when overextensions and other financial shenanigans in the housing market led to a global recession.
All told, given RRE’s importance, it is curious why the industry has not availed properly of the latest advances in technology. While things are changing, I suggest that they are not changing apace with the world around them.
Advances in Artificial Intelligence (AI) are worth mentioning here. While much of the AI-talk is hype, much does suggest enormous potential for changing the landscape. When verticalized and put in deep context, AI can show the face of the Creator not just the Destroyer (as critics of automation point out.) With regard to RRE, imagine seemingly mundane questions like “What is House X worth?” There are in fact thousands of variables- many of which are dynamic- that are needed to consistently answer this question. Then when you add the elements of speed (I need to know now!) and scale (What are these million houses in aggregate worth?), AI is the only horse to bet on.
As the housing ecosystem matures, analytics and “decision models” will be essential in maintaining the smooth flow of consistent, reliable, trusted information. The vagaries of emotion and the pox of human bias must be eliminated.
Artificial Intelligence when applied to RRE is important to all economies. Real AI and not simply its rhetorical counterpart can play a huge role in optimizing, democratizing, and elevating the Residential Real Estate market.