With all the buzz lately about AI, I have been pondering this weekend as to what the future will look like with the technology that has been and will be created going forward. Take ChatGPT, a product of OpenAI, which Microsoft recently funded with $10 billion. Microsoft had previously provided startup capital for the company back in 2019 and 2020.
How will this application potentially affect property, investors, and our real estate industry locally, nationally and globally? I truly believe we are already in Web 3.0, a new era for the worldwide web, and evolving along at hyper-speed with artificial intelligence as well as the blockchain technology that will provide the power for decentralization, free digital identities with crypto wallets, and open digital economies.
You might ask what effect it will have on real estate? Once learned and absorbed, everything will be recorded and processed with ease and transparency. According to Samuel Leeds in his Feb. 16 column in Entrepreneur magazine, potential future effects could be dramatic, especially in terms of saving money.
Investors who have multiple properties will be able to use AI to predict with more accuracy maintenance schedules ahead of time by analyzing sensor data and identifying the things in those properties that are being abused and misused while advising tenants to assist in prevention of and reducing maintenance, thereby saving money. When tenants are home and not home, technology will regulate and minimize waste in the usage of utilities, turning off TVs and lights, too.
There are currently devices that can be used to detect leaks from pipes when you are out or out of town and notify your plumber. Property managers and their crews of contractors will have a better handle on staying on top of sudden emergencies by being immediately notified and then the required repairs can be addressed ASAP by using AI to be more proactive with predictive maintenance
Home automation is already happening at a very rapid pace between doorbells and external cameras recording everything to lights and smart devices, by using your cell to control and regulate heat while away. Technology will use weather patterns in regulating heat usage, too. The application of motion sensors when no one is home or in the office is already in use in both residential and commercial environments. Samsung produces Smart refrigerators that let you know when you are running low on groceries and even enable you to watch cable on it as well as other functions. It’s all happening at lightning speed.
Humans are not be able to comprehend or compute the most intricate and accurate methodologies to analyze information. However, AI can and will be much more capable of precisely and accurately predicting future property prices based on millions of bits of data in one location and the commonality of these data points in similar areas.
All these data points could predict future market trends and potential investments based on looking at the news, crime statistics, new business openings, business registration records and so much more. With this type of software and technology, investors will be far ahead of the curve compared to others who aren’t using AI and will more easily determine the best investment opportunities.
But the downside of AI for investors could be mistakes in predictions that won’t be checked by humans, specifically for tenant privacy issues. and misunderstanding something that a human would not. However, in some situations, information would still need to be analyzed and checked by doing due diligence until AI is more perfected in the future.
Real Estate Brokers using AI will be more reliant on that information when making and providing data for crucial decisions affecting their client’s purchases. However, the balance should be in the combination of using AI and blockchain technology for the betterment and advancement of assisting businesses and consumers in striving for more seamless, reduced paper usage and simplified transactions in the path to greatly reduce costs.
But most critical, for now, will still be the rapport and relationships that are nurtured and created between Broker and client that AI will hopefully never replace. I firmly believe that the human touch and close business connections that are established will always be necessary in order to perform the required services as well as the social interaction that people will still need and want.
As we have seen with the pandemic, the lack of in-person and social meetings (not on Zoom) has had an immense effect on the mental stability of many in our population. The touch and feel of a handshake, a hug, and a smile will never go out of style and will further enhance that transactional human relationship for the most expensive asset that most purchasers will ever own. It would be a truly sad day if AI ever replaced the interactions and relationships between the real estate Broker and/or agent and their sellers, investors, buyers, and renters.
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Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S) as well as the new “Green Industry” Certification for eco-friendly construction and upgrades. For a “FREE” 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] or via https://WWW.Li-RealEstate.Com Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email, and cell number and he will call or email you back.