How AI is Changing the Real Estate Market: A Look Back and Ahead
A Personal Reflection on Technology and Real Estate
Over Labor Day Weekend, my cellphone slid over some real estate documents and fell to the bottom of the lake. It has been 3 days without my cellphone until my replacement arrives, and it has given me a new perspective on how dependent we are on our smartphones.
It’s so easy to look up information on Google Gemini or ChatGPT. Over 97% of home buyers use the internet to search for homes. Today at Roche Realty Group, we were talking about how much the real estate industry has changed over the past 49 years and what role technology has played.
The Real Estate Industry in the 1970s
I look back; it was 1976 when I entered the real estate profession in the Lakes Region of New Hampshire. When I joined the Lakes Region Board of Realtors®, there were 75 Realtors® in the entire membership, and we knew the majority by name.
Most of our monthly meetings were at the Pheasant Ridge Country Club, and our MLS system back then was archaic. Every two weeks, the board office would forward each Realtor® member a packet of 5 ½ by 11 ½ sheets with a black-and-white photo of the new listings and pertinent information.
Yes, we had control of the listings, and consumers had to contact us for all related information, available properties, and all showings. Back then, you could form a close relationship with your clients. We would spend hours and weekends driving our customers all over the Lakes Region with kids in tow. There were no cellphones, no faxes, no email, no high-speed color copiers, no computers, no Dotloop, DocuSign, Zipforms, toolkit CMAs, and no social media. We used basic typewriters, and our best friends were payphones in a few scattered locations. We were always running late in those days because of so many showings, only to be disappointed when the phone booths had a coin jam in the insert slots. I can remember handwriting many offers on the hood of a car and then hand-delivering them. Needless to say, I was always late for supper.
We always treated our fellow Realtors® and clients with utmost professional respect. The majority of offices were small independent real estate companies with lots of for-sale yard signs dotting the countryside. Our advertising programs were basically print media, local papers, the home guide, Boston Globe, and Wall Street Journal classified ads. Realtors® were like poets. They would describe a “babbling brook running through the property” in the Boston Globe, only to learn at the showing that it was actually a stream runoff from the industrial park up the road.
How Technology Revolutionized Real Estate
Since those primitive years, I’ve seen the real estate industry undergo substantial changes. The internet has had the most significant impact and has revolutionized the entire industry. The internet basically surpassed the yard sign as the most important tool to reach consumers. There was no looking back once Realtor.com, Zillow, and other real estate websites were established. Our industry has experienced trends like so many others. The travel industry is one good example. There were travel agencies on every corner. Today, the big names are Booking.com, Expedia, Tripadvisor.com, Airbnb, VRBO, etc.
The transfer of information onto so many accessible and user-friendly sites has transformed the way we do business. Back in the mid-70s and 80s, the majority of communication was by telephone and letters.
In 1995, only 2% of buyers used the internet to search for homes, accoring to Housewire.
By 2005, that number jumped to 75%.
Today, 97% of buyers use the internet for their home search.
However, the vast majority of consumers still enlist the services of a Realtor® to help them make an informed real estate decision.
Today, there are 809 Realtors® in the Lakes Region Board of Realtors®, compared to 75 when I started, and there are over 6,571 Realtors® in New Hampshire. Nationwide, there are over 1.5 million members of the National Association of Realtors®. Today, more than 65% are women, the median age is 52, and the median experience level is five years.
Today, we have so many technological advancements that have brought the process of selling a home on a fast-forward pace. Today, we use HDR, or flash ambient photography, compared to Polaroid cameras back in the day. Digital and drone photography would have been considered science fiction in the 1970s, and so would Matterport 3D tours and professional video tours of each property we use at Roche Realty Group. Look at how many websites we promote our listings on. Today, it’s over 80 sites we promote our listings on, including our social media marketing on Facebook, Instagram, TikTok, YouTube, LinkedIn, Twitter, Threads, Bluesky, and Lemon8. Back in the 1970s, even popular science magazines would not have dreamed of these names or new technologies.
The Role of AI in the Future of Real Estate
So what’s next on the horizon? We are already seeing ChatGPT, Jasper, and other AI programs being used on a daily basis. AI is rapidly advancing, and it will play a vital role in the future of the real estate industry.
Likely AI Changes in Real Estate:
- Photo editing
- Property prices and value estimates: If you think Zillow or Redfin provides decent property value estimates, wait until you see what AI’s advanced algorithms and analytics do to improve the accuracy of valuation estimates. CMAs that utilize AI will make more precisely evaluated properties.
- AI chat voice and chatbots: AI voice and email assistants indistinguishable from agents will start popping up in the real estate industry, answering calls whenever an agent is unable to do so.
- Predicting market trends: AI’s capabilities will help buyers and sellers make more informed decisions about market trends with its sophisticated algorithms.
- Lending and mortgage advancements
- Social media advertising: While this is already being used, this will become a more advanced tool where AI can analyze users’ behavior and preferences on various social media platforms, enabling Realtors® to target potential buyers.
- Enhanced property searches: Buyers will be able to input images of homes or architectural features they like, and AI will assess the data and find matches easily.
- Property descriptions: ChatGPT already provides this feature, helping write highly effective property descriptions.
- Virtual assistants: These AI assistants will improve efficiency and enhance business, and improve customer service.
- Office and administrative support: AI-driven automation will transform tasks like data entry, document management, and scheduling.
- Real estate leads: Some of the new platforms leverage machine learning algorithms that get smarter over time as new data is added.
- AI-generated 3D models: At Roche Realty Group, we have been utilizing Matterport 3D technology for years. This allows prospective buyers to tour a property without leaving the comfort of their home. New AI technology is in the works to make this process even more efficient.
AI Will Not Replace Realtors®
You can see how AI will impact the real estate industry from the above. It will become a game-changer as the technology evolves further. However, like many market sectors, AI is unlikely ever to replace the need for Realtors® to interact with consumers and provide that personal human touch and guidance to make an informed decision in real estate.
Yes, our smartphones today are so much better than those old pay phone booths that were always jammed with nickels when you went to use them.
So, hold onto your seatbelt as AI infiltrates real estate—it’s going to be an exciting ride.
This article was written by Frank Roche. Frank is president of Roche Realty Group located in Meredith, NH, and can be reached at (603) 279-7046. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.
FAQs: AI and the Real Estate Industry
1. How is AI changing the real estate industry?
AI is transforming real estate by improving property valuations, enhancing virtual staging, powering chatbots for customer service, predicting market trends, and automating administrative tasks.
2. Will AI replace real estate agents?
No. While AI enhances efficiency, Realtors® remain essential for building trust, providing local expertise, and guiding clients through complex transactions.
3. What are examples of AI in real estate today?
AI tools are already used for virtual staging, automated property descriptions, lead generation, predictive analytics, social media advertising, and 3D property tours.
4. How does AI improve property valuations?
AI uses advanced algorithms and large datasets to provide more accurate property valuations compared to traditional CMA reports or basic online estimates.
5. What role will AI play in real estate marketing?
AI will analyze user behavior across platforms like Facebook, Instagram, TikTok, and LinkedIn to create highly targeted ads, reaching buyers more effectively than ever before.
