For artificial intelligence, 2022 was a year of breakthroughs. Image generation models such as DALL-E, MidJourney and StableDiffusion came in early in the year, garnering much attention, and ChatGPT went viral near the end.
Riding on the euphoria generated by these technological developments, about $49 billion in venture capital was invested in AI in 2022 — 40% more than a year earlier, per CB Insights.
Yet, there has been little conversation about how AI will play a growing role in real estate, a more than $50 trillion asset class, and one of the key drivers of the global economy. We believe this represents a significant opportunity for real estate tech entrepreneurs.
AI’s emergence will cut through material use cases in real estate tech, from search and listings to mortgages, construction and sustainability.
Notably, some of the most valuable companies in the early years of the real estate tech cycle have created significant value across the subsectors listed below. All of that will be in play with AI in the future.
Residential search and listings
Google’s first real threat to its Search product could come through Bing’s integration with ChatGPT.
That said, both Search and Bing are not tailored for real estate, which partly explains why Zillow, Redfin and StreetEasy have become valuable businesses. There’s a significant opportunity for an ML-enabled search and listings engine that leverages large language models, integrates with MLS providers and provides more robust results for buyers and renters.
AI’s emergence will cut through material use cases in proptech, from search and listings to mortgages, construction and sustainability.
Real estate brokerages
We believe real estate will always need the consultative hand of brokers. They are invaluable and cannot be replaced when an individual or family is making the largest financial decision of their lives.
Yet, a number of services provided by brokers and brokerages can be automated in a similarly personalized and consultative manner. AI-powered chatbots that power real estate brokerages have great potential to disrupt this marketplace.
Mortgage marketplaces and underwriting
The single-family mortgage market is estimated to be worth more than $13 trillion in the United States alone.
Mortgage search and underwriting have gotten better over the years, but there’s room for improvement. For one, the industry stands out for its abject lack of personalization.
AI has the ability to create and work off infinite customer personas, providing more robust search and underwriting solutions.
Renters’ and homeowners’ insurance
Landlords and mortgage lenders typically mandate renters/buyers get an insurance policy before they move in.
Unlike real estate brokerages, where the agent’s role is critical, it is our belief that AI can completely automate the insurance layer, especially as it relates to renters’ and homeowners’ insurance policies.
These products are relatively cheaper and not as complex, and ML-tooled bots can improve the customer’s journey from acquisition and underwriting to policy administration and claims management.
Generative AI is building the foundation of proptech’s next wave by Ram Iyer originally published on TechCrunch