The Next Generation of Artificial Intelligence is Here
Investors Leveraging the Power of AI Will Be the First to Gain an Advantage
By Steve Gaenzler
Artificial Intelligence (AI) has been a buzz word in many industries for years. Yet, innovation has been slow when it comes to the real estate transaction. Many processes are still manual, inefficient, and uninformed by useful data and insights. But, as we have seen over the last eighteen months, the COVID-19 pandemic has accelerated the adoption of technology and digital processes.
AI has now become a hot topic in the real estate world. One particular discipline of AI is poised to disrupt the real estate industry and deliver powerful insights to investors who are ready to leverage it to their benefit.
Computer Vision: The Next Generation of AI
Computer vision is one of the most promising and exciting branches of the AI and machine learning universe. While you may not have heard of computer vision unless you are a data scientist, you may be familiar with some of its real-world applications, including facial recognition for accessing your phone, autonomous vehicles being able to read the road, and home security solutions that distinguish known faces from those of strangers. It works by analyzing patterns and pixels within an image to identify objects and processing that data into useful information. A successful computer vision model is able to “see” and understand the content of digital images.
While this may seem like a simple task, teaching a computer to perceive images is incredibly complex. When we look at an image, we are unconsciously making lots of judgements. Looking through the lens of real estate – when we look at photos of a property – we are automatically judging the quality of the lighting, the condition of the kitchen, or how it compares to the standard of the neighborhood. Until now, that kind of analysis could only be done by a person. With computer vision models trained to analyze real estate, this can now be automated.
Computer vision technology has many applications that can benefit the stakeholders in a real estate transaction. It can significantly customize and personalize the home search process for homebuyers. Real estate agents can perform a thorough valuation analysis or comparative market analysis far faster and cheaper than ever before. For investors, it has the power to help you fine-tune your investment strategies, increase return on investment (ROI) for portfolios, and make investment decisions based on hard data.
Below are a few exciting ways computer vision and AI technology are making this possible:
Intelligent search filters
Search functionality allows users to easily filter results based on basic criteria like square footage or number of bedrooms and bathrooms. But there are other variables that investors may be interested in when searching for an investment opportunity. Maybe you are looking for fixer-uppers to fix and flip. That’s where AI comes in. Computer vision can help identify variables that are not captured by a listing data feed and help investors create a more granular “buy box” search. For instance, investors looking for fixer-uppers can use computer vision-derived condition ratings to create more targeted search results that will yield homes that meet their exact criteria.
Fast, accurate property valuation
When an investor is looking at a large number of properties, they need a better valuation product. Valuation tools with embedded computer vision can make it easier to value a larger volume of properties quickly and with more confidence. Computer vision can look at the interior and exterior condition of a home, objects and finishes that impact value, and other measurements to deliver a more accurate assessment in moments, eliminating the need for costly on-site reviews or appraisals that can take days to complete.
Market predictions
AI and predictive analytics help predict how markets may perform in the future based on past performance. This technology can also be deployed at a neighborhood and property level to predict when maintenance will be needed or help determine the quality of a potential investment’s future performance. Of course, determining which markets will perform and continue to be strong is complex, but the data provided by computer vision and machine learning technology makes the process significantly more reliable and consistent.
Portfolio insights and marketing
Computer vision can deliver consistent, reliable evaluations of an investor’s real estate portfolio and allow them to better manage their assets. Computer vision technology provides investors a more detailed look at the surrounding market and property details. Topography and satellite imagery combined with computer vision AI illuminate details about a neighborhood or local market in an automated way. Evaluating images through time helps investors track changes in markets to help them determine when to deploy an expansion, entry or even an exit strategy.
Augmented reality
Firms like Wayfair, Home Depot and others are creating tools that allow consumers to visualize what a room, or a home, would look like with different paint colors or even after a renovation. Comprehensive technology allows investors to see the potential in the property before buying. Especially in today’s environment with supply chain disruptions and construction labor shortages, this can be extremely helpful to understand the amount of work needed before committing to a project.
Put simply, developments like these are transforming the real estate industry and making it easier for investors to make intelligent decisions based on data and insights. In an industry that often embraces technology at a slower pace, it will take some time and effort to integrate advanced tools and utilize AI to its fullest potential. Those leveraging the power of AI, and its financial returns, will be the first to gain an advantage in the market.
