AI in real estate: what separates the winners from the losers

AI’s impact on real estate: A mixed bag of progress and challenges: The integration of Artificial Intelligence (AI) into the residential real estate industry has shown varied results, with some areas excelling while others significantly lag behind.

• Romi Mahajan, CEO of ExoFusion, assesses the current state of AI adoption in real estate, grading progress as a “solid F” in many areas.
• The technology adoption cycle in real estate is complex, with different parts of organizations at various stages of evolution.
• The intent behind AI adoption varies among organizations, ranging from labor-saving measures to enhancing customer experiences and infrastructure overhaul.

The importance of intent in AI adoption: The purpose behind implementing AI technologies in real estate significantly impacts the outcomes and long-term effectiveness of these solutions.

• During economic recessions, the real estate industry often resorts to reducing headcount and adopting technologies as permanent replacements for human workers.
• This short-term strategy has proven ineffective, as companies tend to rehire when economic conditions improve.
• The industry needs to shift focus towards using AI as a tool to enhance human capabilities rather than replace workers entirely.

Customer experience and economic impact: Balancing improved customer experiences with the overall economic effects of AI adoption is crucial for the real estate industry.

• AI implementations aimed at enhancing customer experiences must be carefully designed to avoid unintended consequences, such as eliminating essential intermediaries in the supply chain.
• The adoption of AI should aim for a net positive effect on the entire real estate supply chain, not just on specific customer touchpoints.
• Organizations need to consider the broader implications of AI adoption on various stakeholders within the industry.

The need for strategic AI planning: Real estate organizations must develop comprehensive AI plans to ensure successful and meaningful integration of these technologies.

• Haphazard adoption of AI technologies, often driven by vendors’ promises of transformation, can lead to suboptimal results.
• A framework for technology adoption that aligns with organizational goals and industry needs is essential for successful AI implementation.
• Real estate companies should prioritize creating AI plans that consider the unique challenges and opportunities within their specific market segments.

Balancing technology and human factors: The real estate industry must strike a balance between leveraging AI capabilities and valuing human contributions.

• The mantra “Intent matters. Plans matter. People matter.” should guide the industry’s approach to AI adoption.
• Organizations should focus on using AI to augment human skills and improve efficiency rather than viewing it as a replacement for human workers.
• Training and upskilling programs for employees should be developed alongside AI implementation to ensure a smooth transition and maximize the benefits of these technologies.

Looking ahead: Potential for positive change: Despite current challenges, the real estate industry has the opportunity to improve its AI adoption strategies and reap significant benefits.

• As the industry gains more experience with AI technologies, it can refine its approach to implementation and better align these tools with organizational goals.
• Collaboration between technology vendors, real estate professionals, and industry experts can lead to more tailored AI solutions that address specific challenges in the sector.
• By focusing on long-term strategies and holistic approaches to AI adoption, the real estate industry can overcome current shortcomings and realize the full potential of these technologies.