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Data analytics, the metaverse, and blockchain may seem far removed from the day-to-day work of residential real estate. But according to the experts at the “Emerging Business Issues & Technology Forum: Which Emerging Trends Will Impact Your Business in the Coming Years?” session at the REALTORS® Legislative Meetings on Wednesday, these tech trends are already impacting the industry and the way real estate pros do business.
Users move to mobile. Search trends on Google can offer insights that can improve your marketing. Data analytics from the popular search engine show that a majority of searches are now taking place on mobile devices rather than desktops, said Jane Dzielski, Google’s principal analytical lead. All new growth in users is in mobile, while desktop remains stagnant. This means that agents need to optimize their websites and ads so that they display well on phone screens. “If you’re only prepared for desktop,” said Dzielski, “you are going to miss out on a large section of your audience.”
New companies help consumers compete. Google search trends can also show where disruption is occurring in the market. In today’s hot housing market, said Dzielski, consumers are facing heightened competition due to the growth in institutional investment in single-family homes. Institutional investors have deep pockets and can pay cash for homes, squeezing out ordinary home buyers.
When competition grows intense, said Dzielski, people start looking for new ways to do things. Searches for third-party home buyers, for example, are trending up sharply. Companies like Knock, Reali, Flyhomes, and Opendoor advance consumers cash for the purchase of a new home before they have sold their current home, giving consumers a chance to compete with the big investors.
Searches for information on co-buying are also on the rise. Companies like Pacaso, CoBuy, and Kocomo offer small groups of co-owners the opportunity to buy a property and share access—a practice that is similar to a timeshare, except the customers involved own the home and can reap the benefits of growth in equity. Co-buying is most common with second homes and vacation homes.
Agents need to be aware of trends like these, said Dzielski. “Your clients may be exploring these options. You want to be knowledgeable.”
Home tours could move to the metaverse. The metaverse—a virtual world where people can socialize, work and even hold major events—is set to have a profound impact on real estate. Meta (the company formerly known as Facebook) is committed to spending $10 billion per year for the next 10 years on metaverse technology, said Dan Weisman, NAR director of emerging technology. Consumers will access the metaverse through the Oculus headset, which Weisman terms “very accessible.”
The most immediate application for real estate lies in how consumers tour homes for sale. Virtual tours are in widespread use now, said Weisman, but what will be possible in the metaverse will far eclipse current methods. The metaverse will bring together all available data points about an individual house, its neighborhood, area traffic and weather, and all the ways a consumer could potentially use the home. The house will be reconstructed in the metaverse space—a place that consumers can walk through as if they were actually visiting in person. “You can see what it would be like walking up the stairs in that house. You could put in your own furniture,” said Weisman. “Meta will change how people view, buy and sell homes.”
Blockchain could change the way homes are purchased. Blockchain is a difficult concept for many people, said Dave Conroy, NAR director of emerging technology, but it will likely change the way the business of real estate is transacted. Blockchain is a system of computers that provide a verifiable and trustworthy record of events or transactions. “Verifiable ownership is a critical component of any transaction,” said Conroy.
Many people know of blockchain as a way to support cryptocurrency, said Conroy. He cited a recent Redfin report that found that 11.6% of home buyers sold cryptocurrency to finance a down payment in 2021, up from 8.8% in 2020 and 4.6% in 2019. “Agents need to be able to advise their clients on this kind of financing,” he said. “Otherwise [those clients] could be left behind.”
Blockchain also supports non-fungible tokens—a unit of data stored on a blockchain that represents a unique item. NFTs are, in essence, a new method of ownership, said Conroy. They provide a documented ownership history, they can be real-world or virtual, they aren’t interchangeable, and the creator can include a wide variety of contract terms. Most NFTs at the moment are simple, said Conroy, and only spell out ownership. However, NFT code may also include descriptions of features or traits, financial terms, and specific rights, such as IP rights in the underlying asset. In the future, Conroy predicted, NFT code would expand to include liens, land rights, and grants for physical access.
And NFT-enabled transactions are already here. Conroy cited the recent sale of a 5-bedroom, 3-bath single-family home that was listed on an MLS and then put up for auction. The title check was done in advance and 2,000 people registered to bid. The house went for $650,000, and ownership was transferred immediately by NFT. “Blockchains are able to ‘speed-run’ how real estate is owned and financed,” said Conroy.
Members of NAR will have a partner in all these emerging tech trends, said Ashley Stinton, head of marketing for Second Century Ventures and REACH. Stinton noted that SCV’s REACH scale-up program plays an active role in shaping the future of real estate technology investment. “We find, support, accelerate, and scale the innovative companies that are going to have the highest impact on REALTORS®’ businesses,” said Stinton. “We then bring these technologies to NAR members so that these companies can work hand-in-hand with the REALTOR® community as they build out their products and services.”