Catherine Mesick is a writer and a member of the National Association of REALTORS® Advocacy Group. She can be reached at firstname.lastname@example.org.
4 Ways Technology Could Impact Real Estate Next Year
November 16, 2021
2022 is going to be the year that technology makes great strides in enabling access to information for all consumers—and it will also offer a wealth of opportunity for real estate professionals.
That’s the forecast Chris Linsell, a real estate technology analyst for The Close, made on Sunday at the 2021 REALTORS® Conference & Expo in San Diego. During Linsell’s session, “Bold Predictions for 2022 from the Desk of a Real Estate Technologist,” he counseled real estate professionals to embrace the coming changes and recognize that increased access to data for consumers also means increased access and income potential for the agents who serve them.
Linsell offered predictions for the four areas technology will produce the greatest impact on the real estate sector and identified areas of concern and opportunity for real estate professionals.
Prediction number one: The company creating the biggest impact on residential real estate in 2022 will be Airbnb.
According to Linsell, the popular vacation rental company will add 25% to its existing residential inventory next year.
The worry: Converting more inventory to short-term rentals will add to availability and affordability concerns.
What to do: Linsell advised real estate pros to be knowledgeable about zoning in their local markets. Airbnb operators can sometimes be in violation of local zoning regulations, and agents need to be vocal in calling these violations out. “Be an advocate for making sure inventory stays where it belongs,” said Linsell.
On the other hand, the Airbnb model is likely too popular to go away, he said. Therefore, he advised real estate pros to adjust their CMAs to account for short-term vacation rental income. “Make sure you include that potential as part of your valuation,” said Linsell. “Otherwise, you are leaving money on the table.”
And while Linsell supports championing sensible zoning laws, he also recommended that real estate agents look for opportunities as investors or managers of short-term rentals. “Seek out investor relationships and get into property management,” said Linsell.
Prediction number two: 5G will finally start to live up to all the hype, and it will have a profound effect on the residential real estate market.
The emerging generation of cellular internet connectivity will be 100 times faster and more reliable than 4G, stated Linsell, adding that 5G could mean that the long-dreamed-of “internet of things” can now become a reality.
The speed of 5G will unlock opportunities for real estate professionals, Linsell said. Think of listing information that can be sent to displays on clients’ car windows while they are driving through potential neighborhoods or AR virtual tours that agents can send to a client in another state. “This technology already exists but relies on Wi-Fi that most people don’t have,” said Lindell. “5G will make it possible.”
The worry: Greater connectivity and more advanced digital experiences will present a challenge to real estate agents who aren’t tech-savvy.
What to do: Start investing now in augmented reality–related real estate apps. Become an early adopter and use the technology while it’s still a novelty for most people. “Use this time to learn while the stakes are low,” counseled Linsell. “Be a part of this conversation while it is growing.”
Prediction number three: Predictive analytics will be the dominant marketing strategy and the most important lead-generation approach of the year.
Predictive analytics is the study of big data sets in order to make predictions of consumer behavior. PA algorithms are getting smarter because the data set is growing, said Linsell. Data about consumers is being combined with the data from MLSs. According to Linsell, it’s now possible for algorithms to predict with a high degree of accuracy which consumers are likely to sell their home in the near future. In fact, PA often knows that these sales are likely to occur before the consumers themselves know it.
The worry: Leads from PA marketing are often long-term leads that need to be nurtured. This could make it difficult for agents who need more immediate results to find success.
What to do: Try out apps like offrs, SmartZip, and HouseCanary. “Once again, you want to perfect your strategies while the stakes are low,” said Linsell. “PA is coming, and it’s going to be part of the conversation in the future.”
Prediction number four: 2022 will be the year of innovation via acquisition. Rather than developing new products, companies are buying them.
2021 saw some blockbuster acquisitions of real estate and real estate–adjacent brands: LionDesk, BoldLeads, Inman, and Cushman & Wakefield were all sold. 2021 was also a record year, according to Linsell, in terms of capital investment in real estate tech start-ups. He stated that this level of acquisition and growth is disruptive to the market.
The worry: With disruptive growth comes growing pains. For example, if a real estate business is built around a particular workflow product for lead generation, and that product and its company are acquired by a bigger company, that workflow product will likely be changed—and staff will need to be retrained. In addition, new and better products will be rolled out more quickly, and businesses should be aware of them.
What to do: Evaluate the tools and vendors you’re using, and investigate new services. “Research the tools you’re currently using and start to get backups in mind,” said Lindell. “If your contract for CRM expires in January, do an audit in December. See if there’s something out there that is better for you.”