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Artificial intelligence (AI) is becoming widely recognized as a potential game changer across industries, including real estate. Real estate technology, or property technology (proptech), is starting to have a broad impact on the mechanisms of the real estate industry, but we are in the early days, especially with regard to the possibilities for the changes that AI could bring. Both real estate technology start-ups and established firms alike are employing AI and machine learning (ML) techniques in a variety of areas, advancing the tools available to real estate professionals at a rapid pace in some ways and just beginning to scratch the surface in others. Many advancements in technology are being adapted or specifically produced for real estate and related fields. However, AI and ML stand out as a category that could fundamentally transform the property trade and building processes at every level. Therefore, a grasp of the essentials and current state of play of these developments can prepare practitioners at every level of the business for a radically different future. Even if there are no plans to add AI into the mix when defining investment strategy, an awareness of the tools available remains imperative.
To uncover current and potential applications of AI and ML technologies in proptech, in-depth conversations with technology investors, entrepreneurs, tech industry experts, and real estate professionals were conducted. This article presents the findings from this primary source research as well as data collected from online sources, with a focus on the present-day state of these developments as they affect real estate investors. The applications of AI and ML in real estate are broad and have important implications for how investors and other real estate professionals can incorporate technologies and new strategies into their operations.1
To ensure a common understanding of some important concepts, we will begin by defining a few key terms. Next, the research methodology will be briefly outlined. The overall results of the data-gathering portion of the research are presented in exhibits, with supplemental information available online. To expand upon the implications for real estate professionals, two areas where AI and ML are currently being applied are explored in greater detail: data and valuations. Lastly, some brief information on the potential drawbacks and pitfalls of...