WATERLOO – If “location, location, location” is the first rule in real estate, “data, data, data” must run a close second.
Real estate agents rely on mountains of information to help them identify market trends and patterns, study demographics and neighborhoods, analyze cost data and valuations, create property listings and more.
Artificial intelligence software and apps like ChatGPT, Canva visual suites, Foxy AI computer vision and others are new tools real estate companies are using to make tracking, collecting and collating data more efficient.
AI systems also can stage an empty property with furnishings and art for better virtual showings and provide improved search results for listings using natural language – “a country view with a lake within 10 miles of Waterloo, Iowa,” for example.
AI is freeing up agents to devote their time to what they’re best at — working with clients and selling property.
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Carl Ericson is a partner at Oakridge Realtors. Photo taken at Hartman Reserve Nature Center in Cedar Falls.
But AI algorithms, predictive analytics systems, Zoom meetings, Facetime tours and snazzy virtually staged videos can’t replicate the personal relationship and trust built between real estate agents and their clients, said Carl Ericson, owner of Oakridge Real Estate in Cedar Falls.
“AI systems can make us more efficient with our time, and that help us at what we do best. Agents are there to add the personal and professional experience, the context, the ins-and-outs of buying a house, that AI can’t do or doesn’t know how to do,” Ericson explained.
Real estate firms are being courted by numerous companies offering AI solutions and enhancements.
“In the long run, while we might be spending money for data or AI capabilities, it helps us connect to the people we want to connect with. Instead of broad strokes, we can drill down a lot easier than we were able to in the past,” Ericson explained.
Amy Weinands
Amy Wienands, broker/owner and CEO of Amy Wienands Real Estate, admitted she has a weak spot for technology. “I’m a shiny object chaser,” she explained with a laugh. She has a healthy degree of skepticism, as well.
“AI can help us in so many different ways, but I think we have to be very calculated in how we use it,” Wienands said. “I love AI and it gives us ease and convenience, but if we rely too much on technology, we could leverage ourselves out of the industry.”
Amy Weinands Real Estate employees work in the office.
The pandemic forced real estate companies to take the leap into the future. Websites were redesigned with more virtual tours and other add-ons. AI systems and apps made inroads with real estate companies anxious to increase efficiency, productivity and creativity to drive sales.
Currently, AI platforms are being used to access and analyze data much faster than a human can track down information and make sense of it.
Kayser
That makes research more accurate and easier to access, said Karen Kayser, real estate broker and co-owner of RE/MAX Home Group in Waterloo.
“We have more data at our fingertips,” she explained. It’s necessary to “be open to change. There’s always something new to learn. I don’t think there’s a full understanding of AI, what’s out there and how it works.
“That’s part of the learning process. I think it frees us up to be even better at what we do and to help our clients make informed decisions,” Kayser explained.
At Wienands’ company, agents are using AI tools to get more traction on the marketing side. “For me, that’s where I think it’s useful, on the creative side, not the client-contact side of things,” Wienands said.
Amy Weinands Real Estate employees work in the office.
For example, Wienands uses AI applications to create effective sales reels (videos) for posting on websites. “In 30 minutes, the AI system can kick out 20 reels in the style I want that are really good.”
While AI can be used to write descriptions for listings or generate market valuations (that still require tweaking by the agent), it can’t replace an agent’s the deep knowledge of the local market, property values, or their ability to connect with clients.
At its heart, that’s what selling real estate is all about, said Ericson.
“For the majority of people, buying a house is an emotional decision. Yes, there are financial and economic decisions to be made, but it comes down to relationships and emotions. You’re buying a home because your family is getting bigger, or maybe you want to downsize. There are a multitude of reasons,” he said.
“And yes, you can do a real estate transaction just by using technology, but is that the best way? Absolutely not. The buyer, the seller and the agent add the context.”
Algorithms can’t replace that feeling a buyer gets “when it just feels right. They can walk in the front door of a house for the first time, and there’s that feeling – ‘this is it, this house feels like home,’” Ericson said.
Kayser agreed. “Buying a home is a personal and emotional experience. It’s more than walking people through a lot of houses. There’s no better feeling for me, as an agent, than knowing that I’ve helped someone find a home they love,” she explained.
In many ways, the pandemic and increasing use of technology has short-circuited that human connection, Wienand said.
“Having the ability to connect with another human being is a skill set. You can be super-talented, but if you can’t communicate, make eye contact and connect with another person – that’s becoming a lost art, and that’s sad.”
Millennials own less than half the real estate wealth of boomers—can they catch up?
Millennials own less than half the real estate wealth of boomers—can they catch up?
The dream of homeownership is slipping away for younger generations—thanks to a vicious cycle of high mortgage rates and a chronically low supply of houses.
According to the National Association of Realtors (NAR), millennials were the most active homebuyers from 2014 through 2021. Not anymore.
Since early 2023, boomers have overtaken millennials, making up 39% of homebuyers—the most of any generation. That’s a whopping 29% jump from a year before.
Meanwhile, Gen Zers are trailing woefully behind, accounting for just 4% of home transactions, according to the latest NAR data.
The way the housing market is, the trend isn’t likely to reverse anytime soon.
The worst housing market for first-time buyers?
The impact of mortgage rates on the generational home divide can’t be overstated.
According to a recent report from Creditnews, more than 40% of all U.S. mortgages were obtained in 2020-2021 when interest rates were at rock bottom.
And nearly two-thirds of current mortgage holders locked in rates below 4%—almost 3 percentage points lower than the current 30-year mortgage rate.
The result is new homeowners must take out mortgages at much higher rates than the average rate of current mortgage holders—also known as the effective mortgage rate.
The gap between 30-year fixed and effective interest rates is the widest since the 1970s
Higher mortgage interest rates don’t just make houses less affordable for new buyers, they also disrupt supply. That’s because existing homeowners don’t want to sell their houses and give up their cheap mortgages. Consequently, whatever housing supply makes it to market comes at disproportionally higher prices.
This “sit and wait” philosophy is fueling one of the largest housing shortages in America’s history.
Industry experts say a housing market is healthy when there is between five and six months of supply. At the current sales pace, existing home supply is roughly half that level.
And there are few signs that supply will pick up soon. According to the latest Redfin data, home inventory has been in decline since last October.
In these market conditions, younger first-time buyers are out of luck. Not only do they need more income, they have to outbid older buyers flush with home equity and cash.
Millennials making headway but still falling behind
Despite being the largest generation entering their prime homebuying age, millennials still own a mere 18.2% of real estate wealth—a far cry from boomers’ 41.6% share, according to Fed data.
And while millennials made significant headway during and after Covid, their accumulation of real estate wealth still fell behind boomers:
Experts think millennials will have a hard time catching up. “Baby boomers have the upper hand in the homebuying market,” said Dr. Jessica Lautz, NAR deputy chief economist, adding: “The majority of [boomers] are repeat buyers who have housing equity to propel them into their dream home—be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”
This story was produced by Creditnews and reviewed and distributed by Stacker Media.