Tech Innovations Changing the Real Estate Industry
Technology is constantly evolving — not unlike a living organism. It isn’t static. It isn’t constant. Which makes it disruptive. Businesses, even niche businesses, often forget to, or choose not to, evolve with technology and are turned upside down — because their products, their policies, their customer interface becomes, simply put, outdated. We live in a consumer-driven world, and we are often drawn to technology everything — from convenience to novelty. This is Insight’s Disruptive Technology series. We will be addressing how technology enters an industry and does exactly that — disrupts.
A virtually enhanced living room photo. A fun Vine capturing a “welcome home” moment. A blog loaded with timely content and visuals. A lively YouTube parody.
Forget traditional tools of the trade in the residential real estate industry. In the increasingly competitive and complex home-buying and home-selling world, agents are reaching for the best digital innovations to market themselves, appeal to more consumers and add value for their clients.
“Real estate professionals know that their customers are uber-connected and informed,” according to The Digital House Hunt, a report by the National Association of Realtors (NAR) and Google. “Nine in 10 home buyers today rely on the Internet as one of their primary research sources, and 52% turn to the Web as their first step.
“In today’s complex, rapidly changing and digitally driven media environment, capturing a home shopper’s attention in order to build a real estate business … is tougher than ever.”
Among the report’s key findings:
- 90% of home buyers searched online during their home-buying process.
- Real estate related searches on Google.com have grown 253% over the past four years.
- Buyers use specific online tools during different phases of the home search process.
Realtors and consumers have seen a range of innovations during the past decade that have turned the world of home buying and selling upside-down. Here are a few of the game changers.
1. Video is king in the disruptive tech universe. Agents are using it like never before with easy-to-use sites like Videolicious, creating their own video tours of homes and properties. Micro-videos are being used to tease new properties or promote an agent’s lighter side. YouTube is a perfect fit for a fun parody. These tactics are right on target: Consumers rely on videos for everything from home tours to consumer reviews to community information. And YouTube is the No. 1 place they go, according to The Digital House Hunt.
2. Not surprisingly, home buyers and sellers are relying on mobile devices more and more. According to The Digital House Hunt, about one-fifth of real estate related searches happen on mobile devices, and Google real estate related searches on mobile devices grew 120% percent year over year from 2011 to 2012. The real estate industry is capitalizing on mobile devise use in diverse ways. For instance, a live streaming mobile app like Periscope helps an agent promote live broadcasts of, say, an open house. The GoTour mobile app lets a potential buyer touring a model home point a mobile device at products and features in the home to instantly receive specifications and create a wish list.
3. Social media is playing a growing role in how realtors do business. A 2015 membership profile survey from the NAR showed that 65% of respondents use social or professional networking sites, up from 35% in 2008. The survey also showed that 12% of realtors have a blog. Image-driven sites like Instagram, Pinterest and Snapchat are the go-tos, while sites like TinyTorch are helping realtors discover, create and share content.
4. Consumers continue to rely on real estate sites like Zillow, Trulia and Realtor.com for housing information. The sites collectively recorded more than $120 million visits from desktop computers in April last year, according to an Inman report. In all, real estate sites grabbed a whopping 360 million visits from desktop computers that month. More growth is likely ahead, as Zillow partners with Keller Williams Realty Inc. to automatically feed the listings of the company's 73,000 associates to Zillow.com on a daily basis.
5. Remember the days of paying professional stagers hundreds or thousands of dollars to get a home in top selling shape? Virtual staging has changed all that and is a growing trend as more home buyers pore over online photos before checking out homes in person. Think virtual furniture, artwork, rugs, plants, lighting and more for one room or the entire house. “Since many buyers today narrow their choices based on online photos, virtual staging is an economical way to show the potential of a vacant property,” according to Realtor Magazine.
6. Industry watchers say drones could be the next big disruptive innovation. Agents can market homes and properties with eye-catching aerial photos and video, offering clients unique visuals and boosting value. The FAA recently released proposed rules on the use of drones for commercial use, a welcome first step for the industry and “good news for property owners and realtors who desire to embrace cutting-edge technology to enhance the process of buying and selling real estate,” said NAR President Chris Polychron.
The commercial real estate industry hasn’t seen nearly the disruptions of the residential industry, but experts say certain innovations are driving change.
The commercial real estate search platform 42Floors is getting plenty of buzz for changing the way people find office space. CoStar is opening new doors in commercial real estate by making information, marketing and analytics more readily available. CompStak offers a large lease comp exchange for commercial real estate brokers, appraisers and researchers.
Meanwhile, the DisruptCRE conference is showcasing tech innovations that are impacting the commercial real estate industry.
As both the residential and commercial real estate industries grow and evolve, it will be interesting to see how these tech innovations and new ones continue to impact the real estate business, and its professionals and consumers.