Silicon Valley & the Future of Real Estate

By
Home Stager with Caprice Weston's Home Staging

Credit: videoflow Via Freepik

Silicon Valley has become synonymous with technological innovators, disruptive mavericks and starry-eyed forward-thinkers. From transportation to finance, food to telecommunications, the startups that pass through Silicon Valley have reshaped nearly every aspect of modern life. There isn't an industry on earth that this sleepy Bay Area town hasn't influenced.

It was only a matter of time before Silicon Valley set its sights on real estate. The real estate industry has a deserved reputation for being staid, set in its ways, bullish with outsiders, and resistant to change.

That’s starting to shift now, as technological advancements are forcing the industry into the 21st Century – and beyond. This article looks at Silicon Valley's sizeable influence on the real estate industry by focusing on four technological innovations.

Matching Algorithms, Digital Marketplaces and the Rise of the Consumer

Consumers used to have little choice or transparency when it came to real estate agents. They had unreliable word-of-mouth recommendations, Yellow Page ads, and maybe a persistent agent cold-calling them. They also had no recourse for vetting an agent’s quality; a real estate agent could easily fabricate online reviews and keep their sales history hidden.

Tech companies like Nobul are flipping that dynamic on its head, transferring power to the consumers. The real estate digital marketplace leverages an AI algorithm to let consumers find and vet their perfect agent.

Once the consumer narrows their search, agents compete for the consumer’s business by offering competitive terms. “Nobul introduces transparency, accountability and simplicity at a crucial time, says founder Regan McGee. “As recent regulatory changes, longstanding demand for industry advancement and an embrace of digital technologies have become too prevalent to ignore.”

AR, VR, Digital Twins and the Sight-Unseen Buyer

Recently, the real estate industry has witnessed a sizeable uptick in sight-unseen buyers. Some attribute the rise to the pandemic, which forced buyers to complete real estate transactions remotely. Others attribute the shift to millennials, now the largest buyers of real estate, who prefer tech-enabled, contactless transactions. But most experts contend that it’s a combination of these two factors.

Whatever the reasons, the move toward sight-unseen buying has precipitated a rise in digital property viewing. Silicon Valley tech companies like Matterport are leveraging augmented reality, virtual reality and digital twinning to offer remote buyers an immersive viewing experience.

Blockchain Technology, REIT Platforms and the Casual Real Estate Investor

What do blockchain companies and online REITs have in common? They are both ways that Silicon Valley is helping democratize real estate investment.

Silicon Valley blockchain companies like Lofty AI have established streamlined platforms for tokenization and fractional ownership, allowing casual investors to buy and trade small portions of real estate properties. Meanwhile, online REITs (Real Estate Investment Trusts) adapt a concept once reserved for wealthy investors and allow anyone to partake.

Big Data and the Smarter Buyer

Big data analysis has several applications in real estate: enabling developers, investors and property managers to make smarter, safer decisions.

But the emerging technology also supports consumers who want access to real-time insights on property values. Big data can help buyers determine current values and future price fluctuations before they buy, which may help reduce the risk of real estate investing. Several Silicon Valley startups and established companies are starting to uncover the power of big data in real estate.

These four innovations illustrate how Silicon Valley and its crew of maverick thinkers are shaping the future of real estate. By drawing on consumer demands, demographic shifts and democratizing principles, the companies above are helping chart a new course for the industry.

Comments (0)