In recent years, real estate and innovation have gone hand in hand. The so-called real estate innovation has drastically shifted the landscape in the industry over the course of a few years.
The main sources of innovation are the university programs and the startup space who are evolving at unprecedented rates.
University programs such as the MIT (Massachusetts Institute of Technology) Real Estate Innovation Lab has contributed a great deal in researching the technological impact in the world of real estate. The most up to date trends in construction material, environmental adaptation, architecture, and engineering are some of the innovations the lab is working on.
In the first two quarters of 2019 alone, more than $12.5 billion was invested in real estate tech startups, according to the CREtech.
These startups work on a range of categories such as commercial and holiday and residential real estate and are implementing virtual reality, AI (Artificial Intelligence), big data, blockchain, and many other technologies.
Real estate companies have embraced the digital transformation and have adopted digitalization across the board.
1. Real Estate Purchase Optimisation
Buying a property has always been quite an overwhelming process. Bureaucratic obstacles, time-consuming paperwork, misinformation, tricky real estate agencies are some of the reasons.
Back in the day, your physical presence was required in order for you to declare your commitments to purchase agreements by signing documents. An inconvenience for everyone going through contracts and all of the details whilst a human, also called real estate agent, is impatiently waiting for you to complete the process.
A while ago, tech startups such as the infamous Docusign, have introduced e-sign documents moving the transaction process to the comfort of our home. Documents are being securely shared between all the involved parties and singed remotely. Companies like Qualia have built transaction hubs where all documents are put together and all stages of the transaction can be viewed and monitored at any time.
Companies like Notarize have introduced remote document notarization. In some cases, this is feasible via a webcam, and people can complete real estate transactions from virtually anywhere.
2. Property Building in the Digital Age
Companies in the real estate industry have incorporated groundbreaking techniques leveraging technological advancements in construction.
The module has been implementing modular construction speeding up school building properties and commercial real estate constructions.
Prior to moving to the construction site stage, Modulek builds pre-fabricated walls and modules at its facilities. Weather delays and construction waste automatically become history and pre-fabrication has grown popular in the industry.
Amazon has invested in the Plant Prefab, a startup with the vision of sustainable home-manufacturing processes. The company’s aspiration is to halve construction times and reduce costs by 25%. Plant Prefab builds smart homes with a focus on delivering eco-friendly performance by optimizing energy use. These smart homes are of course customized to the buyer’s needs and preferences.
Modular construction has been embraced also by traditional hospitality giants such as the Marriot group. The big hotel brand has promised to build the world’s tallest modular tower in New York. Also, the first modular hotel is already running in the San Francisco area by Hilton.
3. Big Data Invaluable Source of Knowledge
Αs one of the most controversial and surely most relevant topics of our time, the big data wouldn’t miss from our list. Big data is the talk of the town on a global scale and innovation in real estate couldn’t be irrelevant. Big data bring profound knowledge that fosters innovation opportunities. The people who build real estate as well as the people who buy it, need to know the performance capabilities of their properties. Value for money, rental rating, energy efficiency, resale value. Extracting all this information from data and turn this data into valuable insights is of utmost importance in the industry for both buyers and sellers.
Leveraging data, property managers can take swifter and smarter decisions. This is something that makes real estate appraisals faster and more accurate.
Big data can be implemented through smart technology so that the buildings adjust to the number of people being in the building, climate, or optimize energy consumption minimizing the overall costs.
Big data can be also used to create 3D models and virtual reality simulations that allow developers, architects, construction groups, and lenders to take a tour in the building before taking the next steps. This can help potential tenants to visualize the space of the property the consider buying and make better decisions avoiding costly mistakes.
4. Smart Homes and the Next Day
The internet of things has become the synonym of smart homes. It’s a term coined to describe internet-based devices that receive and provide data shifting the way homes nowadays function.
The biggest giants in the world have heavily invested in and advocated for smart home technology. Amazon has been at the forefront of smart home technology, making partnerships with companies like Lennar using Alexa to control thermostats, lights Wi-Fi, smart switches and sockets, doorbells, and many more.
In the near future, it might be even trivial to see water faucets filling any cup or bucket to a precise level as per your instructions. Refrigerators will inform you when you are running out of stuff, the whole home energy consumption system will be adjusted as soon as you close the door on your way out.
According to recent surveys, by the National Multifamily Housing Council, 43% of respondents said they wouldn’t rent without voice-activated virtual assistants like Google Home or Amazon’s Alexa. Over a third of the respondents already owned smart home devices.
Some of the emerging challenges in this new landscape are the way the new owners will take over a house and get access to all the information they need to use the existing smart home systems. Also, how smooth the transition from the former occupant to the new one can be. The smart home needs to be fully prepared for the new occupant to check-in as well as the former occupant’s data (passwords, access codes, search histories) that need to be completely deleted.