It is no secret that utilizing newer technology like big data and analytics can shake up and revolutionize nearly any industry. The real estate industry is no exception here, and has, in fact, already begun reaping the rewards that big data and data-driven technologies can provide.

The huge amounts of data generated by the real estate industry can be leveraged to its advantage even further going forward as new technology and ideas are pushing the envelope for the real estate industry at both the macro and micro scale.

Analytics

One of the most basic and powerful data-driven tools that the real estate industry has at their disposal comes in the form of analytics. The benefits of data analytics in real estate extend to both the consumers and realtors because it allows for advanced property evaluation across a huge spectrum of parameters from expected appreciation and depreciation rates to crime statistics, accessibility, and other factors. This not only allows for real estate companies to determine value more accurately and mitigate risk, but increases customer engagement as well, providing them with highly relevant information regarding potential purchases.

The huge amount of real estate data available can, and should, be leveraged for maximum predictive impact just as Wall Street uses the data available to model algorithmic trading. Through the use of data analytics, realtors and investors are able to keep up to date on vital market data in real-time, allowing for the ability to stay ahead of the curve on the rapidly changing market of commercial real estate. Accurate, timely market data can make a massive impact on a company’s ability to turn a profit on a piece of real estate and empowers potential home buyers by providing a comprehensive view of the market even as it changes minute to minute.

While these huge pools of real estate data are already being used by Artificial Intelligence programs to improve the customer experience through personalization and predictive home evaluation over time, AI can further change the real estate game. AI can help to accurately predict which locations will be the most beneficial for developers to invest in, optimizing market-level profitability and revenue and revenue as well as helping to identify optimized spatial layouts of new developments.

Virtual Reality

Though the real estate industry has been relatively slow in hopping on the big data train, it has taken a short amount of time for the industry to see the massive value that data brings to the table. Data can show investors, developers, and potential buyers detailed and pertinent information about real estate without ever having to see it in person. While macro-level data like land valuation, crime statistics, accessibility, and traffic flow are incredibly important when looking at real estate development and investing, the data generated at the micro-level is now coming into play in a big way.

Data comes in a variety of different forms, and while it can be easy to be tempted to shelf classic visual data for the more esoteric sets of data pertaining to a piece of real estate. Visual data, however, is actually at the forefront of one of the more inventive and exciting data-driven technologies being used in the real estate industry today. When enough visual data is available, realtors can implement Virtual Reality technology in order to give prospective buyers a tour of the property, giving an in-depth look at the dimensions of any given building that a static photograph simply cannot provide.

Again, VR is another new data-fueled technology that benefits both buyers and sellers of real estate. Realtors massively expand their market as they don’t have to set up actual appointments to show a home and can actually show it simultaneously to many different potential clients. Additionally, homes can be staged virtually through VR, turning an empty and visually cold, unfurnished home into a staged home in an instant with the ability to change any furniture or fixtures in the blink of an eye to appeal to any number of aesthetic palettes.

Informed Decisions

The real estate industry has been long considered generally conservative, relying on more Luddite business methods and general entrepreneurial skills to operate quite successfully for decades. This is all changing with the rise of “Proptech”, technologies that capitalize on the huge amounts of data generated in the world of real estate, which is working to help both purveyors and purchasers to make more informed decisions.

Quantifiable data, whether gathered from historical sources, social media platforms, or any other number of sources, work to show a bigger picture than many are used to seeing. When investors, realtors, and buyers are all able to see the forest for the trees, everyone comes out ahead as they have the ability to make a better decision based on all of the available data instead of just historical data or gut feelings.

In its raw form, much of the data generated by or relating to the real estate industry isn’t all that helpful. However, with the power of data analytics, machine learning tools, and Artificial Intelligence, the heavy-duty number crunching is taken care of, leaving a distilled and very useable product. In a way, these new technologies are really leveling the playing field when it comes to real estate, providing the same advantage to anyone willing to take the time to apply big data in an effective way.

These technologies are unlikely to outright upend the real estate industry anytime soon, considering the industry’s historically slow adoption of new technology. They will, however, revolutionize how properties are sold, evaluated, marketed, and even seen on a very real level.

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Online data plays an almost inextricable role in American consumers’ lives. Following a host of large-scale data breaches and subsequent questions about corporations’ use of consumer data, Capitol Hill has been abuzz with talk of creating federal data privacy legislation. Amidst calls for federal data privacy protection laws, many industries that handle sensitive consumer information – including the real estate industry – are expressing their support for data privacy and offering further insights into how data is used in their operations. As the national discussion on data privacy continues to take shape, taking a closer look at how data and the real estate industry are intertwined further highlights the intrinsic role of consumer data in many aspects of Americans’ lives — and emphasizes why it urgently needs to be protected.

Background: Big Data, Big Problems

As Fortune reported in November 2018, data privacy has captured congressional attention in recent years because of issues related to large-scale data collection and protection. Without comprehensive data protection laws in place, big technology companies can generally make consumers’ data available for use in targeted advertising, among other activities. Targeted ads are those that seek to appeal directly to an individual based on their unique traits – traits which a company has gathered from analyzing an individual’s online data, like their social media profile. All different types of data, including some that aren’t so obvious, are used to inform this targeted advertising. For example, on the social media platform, Facebook, “messages you send to your friends, posts you share on your personal page, even the metadata of the files you upload — for instance the location data saved in images — all provide data for Facebook to use,” Alexander J. Martin, Sky News’ Technology reporter, wrote in March 2018.

Targeted advertising is problematic for a host of reasons, the New Republic reported in April 2018. First, it doesn’t give consumers agency in how their personal information is used, which many people find disconcerting. It also often causes even bigger problems, like the perpetuation of discrimination and fraudulent activity, including in the housing industry. For example, “advertisers armed with big data [large datasets that help inform targeted ads] can ensure housing or employment advertisements don’t reach African-Americans or Hispanics [by targeting their ads to non-minorities], discriminating on the basis of race,” David Dayen of the New Republic wrote. In fact, this alleged discriminatory use of big data in housing and employment ads is the subject of a March lawsuit filed by the Department of Housing and Urban Development (HUD).

Furthermore, targeted advertising and the use of big data places Americans’ personal information at risk and makes it vulnerable to hackers. “The capture and storage of personal information itself creates a target, prone to data harvesting and breaches,” Dayen noted. The recent breaches of multiple large, international companies illustrate this point. In these breaches, troves of highly personal consumer information, including social security numbers, drivers’ license numbers, and copies of passports, were accessed by hackers in 2017 and 2018, the Washington Post explained. The paper noted that these incidents put millions of consumers at risk for identity theft and other illicit uses of their personal information.

An Important Responsibility — And a Call for Action

Whether it’s data obtained by big tech companies for targeted advertising or data housed by consumer services businesses (like hotels, banks, the real estate industry, credit card companies, and more), it’s clear that collecting and storing consumers’ personal data is a significant responsibility — one that must be taken seriously. During a March Senate hearing examining recent private sector data breaches, Senator Maggie Hassan of New Hampshire suggested that the aforementioned high-profile data security incidents, along with other recent consumer data breaches, mean that federal action establishing data protection standards should be taken to ensure that consumers’ information and privacy is better protected.

“… I want to make sure that Americans — whose information is in the custody of an entity they may not even know anything about — don’t have to wait for there to be a breach before companies start doing what they should responsibly do … This is an ongoing threat,” Hassan said at the hearing, per The Washington Post. “It’s been an ongoing threat for a while. And we need to make sure there are standards in place, just the way we have safety standards for other industries …

A Cross-Cutting Issue

As these breaches reveal, addressing data privacy is a major concern for all types of businesses and consumers, including those in the real estate industry. In fact, because of the highly sensitive financial and personal information that the industry regularly handles, ensuring that consumers’ data is protected is a top priority for real estate brokers. Indeed, the National Association of REALTORS® (NAR) highlights the importance of this issue in an overview of data privacy and security on its website:

In addition to handling consumer data, real estate brokers also often use big data to help clients navigate the home buying and home selling processes. “REALTORS® may use consumer data to allow them to advise their selling clients on how to price their home and how many potential buyers will be interested at different price points,” Nina Dosanjh, or member of NAR, and the 2019 Vice Chair of the NAR Federal Technology Policy Committee, said in her March 2019 testimony before the Senate Subcommittee on Manufacturing, Trade, and Consumer Protection for a hearing on small business perspectives on a federal data privacy. “It [consumer data] can also be used to give buyers a better sense of what types of properties competing home buyers are looking at, as well as their buying ability …”

Taking A Stand, in Real Estate and Beyond

Because consumer data plays such an intrinsic role in the real estate industry, both from a client protection perspective and a business perspective, industry-specific organizations like NAR are deeply involved in advocating for consumer data protection measures. Notably, the organization developed its own Data Security and Privacy Toolkit to educate those in the real estate industry about the importance of data security – and to provide some suggestions for best practices when it comes to protecting consumer data. Moreover, NAR generally supports federal initiatives to protect consumer data, and believes that these initiatives should be cognizant of ensuring that small businesses, like those of many real estate brokers, can comply with data protection requirements without an undue burden.

On Capitol Hill, there are ongoing discussions regarding what a federal data privacy law might entail. Since late last year, a variety of proposed legislation has been introduced to protect consumers’ data and penalize companies and individuals if they do not ensure that these protections are in place. For example, in November 2018 Senator Ron Wyden introduced a discussion draft of the Consumer Data Protection Act, which allows the Federal Trade Commission (FTC) to enforce data privacy regulations and heavily penalizes corporate executives, including with jail time, if they do not adhere to these regulations. In December 2018, Senator Brian Schatz also introduced the Data Care Act, which prioritizes fines over jail time for companies that fall afoul of proposed data privacy protections. These constitute just some of the multiple bills that have been introduced to address a generally-established need for federal data privacy protections.

As Fortune reported, many technology companies have become increasingly supportive of federal data privacy legislation, a stance which further improves the possibility of a nationwide data privacy law passing Congress. Moreover, following the implementation of the European Union’s data privacy legislation, the General Data Protection Regulation, in May 2018, it seems even more likely that the United States will pass its own legislation in due time. Indeed, many U.S. businesses that work online, including those of many real estate brokers, already have to comply with the European legislation.

According to NAR, a uniform federal privacy law makes sense for the real estate industry and for consumers more broadly. “NAR supports a single federal standard [with no exemptions] for data privacy and security laws in order to streamline and minimize the compliance burden,” the organization notes. NAR is also in favor of the FTC enforcing these regulations, except in the banking industry, which would undergo separate enforcement.

While lawmakers seek to come to a consensus about federal data privacy protections, consumers and business owners throughout the United States will be paying close attention to these conversations. As this examination of the real estate industry and data privacy reveals, consumer data plays a role in Americans’ lives in myriad and unexpected ways. Therefore, ensuring its protection is increasingly crucial for safeguarding consumers’ rights and for guaranteeing a fair and equitable data standard to which all businesses must adhere.

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Discussions about how artificial intelligence (AI) will alter the workforce as we know it is a hot topic among thought leaders, including those in the housing and real estate ecosystem. While some fear that improvements in machine learning and cognitive intelligence will present a threat to jobs—which is certainly an important concern—others see AI as a helpful tool for real estate professionals.

When hearing the term “AI,” people often think of chatbots and Siri or Alexa; however, experts see AI as having greater potential as a common helper in the real estate industry—being able to communicate with buyers in an intelligent manner and identify important signals for property regulations, such as RegTech.

Technology can assist the industry in property management, application processing and data synthesizing so that agents and brokers can focus on connecting with clients and helping them with the emotional process of buying or selling a home.

Here are some ways real estate professionals can utilize AI to improve their operations and increase their business growth:

• For property management, advanced machine learning can streamline everyday processes for tenants, property managers and landlords by helping find suitable tenants, locate vendors and provide alerts for routine maintenance and management tasks.
• Increase the number of recommendations your clients can choose from through AI. Agents can convert their knowledge of a client’s wants into data an algorithm can use to find a higher number of matches at a faster rate.
• AI can provide virtual tours for interested homebuyers and answer simple technical questions about the property on behalf of the agent, such as square footage, questions about the lease and more, through 24/7 chat boxes. More nuanced questions can be transferred to the agent.
• Agents can maintain long-term relationships with their clients for when they need help moving, selling or even buying multiple properties in the future through AI-based customer relationship management (CRM) systems.

These are just a few of the ways AI is being developed into the way real estate professionals conduct their business. AI can be a helpful tool that can make everyday tasks more efficient and provide assistance to clients at a moment’s notice, rather than a replacement for the agent themselves. It’s important to remember that AI is not without flaws. Some worry that AI creators and users will include their own biases within new technology, causing more roadblocks and harm to minorities.

Innovators are working to make AI great at problem solving, automatic processing, data collecting and so on, but being an agent or broker requires skills that AI doesn’t have: the expert advice of a professional who has worked in the field for over 20 years; the ethics to make sure AI is used responsibly; the ability to listen and understand the needs of a client; the intuition to know when a property is a good fit or deal; and the empathy to sympathize and provide moral support when homebuyers get cold feet or things don’t go according to plan.

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