AI-Enabled Real Estate: How Automation is Impacting the Housing Market

Many of us don’t readily recognize the role that AI is playing in real estate. Surprisingly, AI is already shaping nearly every aspect of the real estate market, from the way houses are being designed and constructed, to the real estate investment market. Believe it or not, in some ways it is even being utilized to customize and guide the home-buying experience.  

READ: AI Revolution — Unveiling the Transformative Power and Unforeseen Consequences

Home construction AI

Artificial intelligence design in home construction seems pretty futuristic but it may well become more mainstream in the coming years. One of the reasons is because of the sheer number of homes that will need to be built in the coming years to meet the demand. Think about the way that Colorado alone has grown over the past couple of decades. The world’s population is growing at an astounding rate — if all of those people are to be housed, literally hundreds of thousands of homes will need to be constructed. 

Already, AI-based tools are being utilized for things like the production of materials used in home construction. Other tools are already being incorporated into home surveys and inspections. Drones are commonly incorporated to evaluate the health of existing roofs or plumbing. Hundreds of companies are working to develop tools that may well completely change the home construction industry, making it both safer and more efficient. 

READ: The Economics of Housing Inflation in Colorado — Exploring the Supply and Demand Imbalance

AI-assisted home searches

All of this can ultimately add up to changes in how people look for homes in the first place. The incorporation of AI tech may drive down costs or make it easier to ascertain how much damage there is in an existing home. Some companies and real estate agencies are even launching products that help filter home characteristics and better drive customized home searches. 

Imagine looking for your dream home in Aspen or Boulder and being able to customize the search toward exactly the characteristics you’re looking for. Or perhaps being in Denver and being able to narrow your search to apartments that fit your specific needs in certain neighborhoods. Colorado’s real estate market has pushed up over the half-million dollar mark for the average home during the COVID-19 pandemic but is, fortunately, starting to come down a bit. AI-assisted home searches can help buyers find a wide selection of homes they’re able to afford. 

AI in home financial decisions

At a much higher level, home investment financial decisions are also being made with the help of AI technology. For example, AI can be utilized to help identify emerging markets that investors can make a killing in. A lot can go into these analyses such as where population growth is happening, home availability, how rental rates are doing, job growth and certain government policies that could promote growth. On the flip side, it can also be a help in determining when markets are becoming less lucrative. 

READ: Identifying Emerging Real Estate Markets — Key Indicators for Lucrative Investments

The tech can also do a number of other things that impact real estate investment decisions. Artificial intelligence can be used to value property, assess damages and review risk assessments. For instance, are increasing droughts in the West likely to cause risk with home investments? How are wildfires and other extreme climatic events playing into risk factors in the Colorado home insurance market? All of this information can be incorporated into a larger company investment strategy very quickly using AI-driven tools to help make better, more informed decisions. 

Of course, there are still a lot of risks with real estate investment in general. Markets are constantly changing and buying homes can be a bit too easy when you have the funding for it. The real work comes with managing the homes over the long term or putting in the money to complete the renovations that were planned. Artificial intelligence is a tool that can help inform decision-making — perhaps even a really great tool — but ultimately, the risk is on the person who makes the decision to invest. 

Artificial intelligence is making its way into every aspect of our lives, including the real estate market. The tech has the power to change real estate in nearly every way from home construction processes to how people search for their dream homes to how real estate investment decisions are made. It is a powerful tool, one that will forever change the housing market.  

Indiana Lee is a writer, reader, and jigsaw puzzle enthusiast from the Pacific Northwest. An expert on business operations, leadership, marketing, and lifestyle, you can connect with her on LinkedIn.