As REALTORS®, we need to focus on the ABCs, and by that I don’t mean “Always Be Closing;” We need to “Always Be Curious!” This is why the Global Real Estate Council focused on big technology, blockchain and their impact on our industry for our first in-person event since the pandemic began. Ironically, it was refreshing to learn about the future the old-fashioned way.
We convened a panel of experts to help understand where technology is taking the industry. Here’s what we learned.
Big Tech
Every week, Big Tech invests approximately $600 million into property technology (proptech). Their investments differ; Meta, formerly Facebook, is building out the metaverse and virtual reality, Amazon is investing in data processing and Verizon continues to expand 5G, to name just a few examples. Some of the technology under development includes artificial intelligence (AI) that can help determine who may become a buyer or seller. Other AI applications include highly accurate automated valuations through the processing of massive amounts of data and augmented reality, which overlays information onto the real world through a pair of glasses.
As a result, over the next two years, keeping up with technology is the biggest challenge firms are facing that they can control (as opposed to those challenges they can’t, like lack of inventory, housing affordability and competition from nontraditional market participants). Real estate firms and practitioners will need to keep up, stay curious and learn.
There’s also a metaverse of information to consider. Now, with 3D home scanning companies like Matterport, you can (and should!) add tags of information for viewers to reference as you virtually tour the home. Add that to the abundance of geographic information available, and people can immerse themselves in a home and a neighborhood prior to even physically stepping foot on the property. This capability is even more important now, with the large amount of cross-country and global migration we’ve seen throughout the pandemic, when people couldn’t tour homes prior to purchasing.
Blockchain
Blockchain is a system which maintains a record of cryptocurrency transactions across several computers linked in a peer-to-peer network. Blockchain can also be used to track recorded documents on properties, in addition to a multitude of other records.
Bitcoin is the original cryptocurrency; it originated from a proof-of- concept book: Bitcoin: A Peer-to-Peer Electronic Cash System, by Satoshi Nakamoto, before being officially launched in 2009. From there, Bitcoin’s market cap has grown to $759 billion (as of April 5, 2022). There are now over 18,000 cryptocurrencies, with a total market cap of approximately $2 trillion.
There are a few real estate transactions that have taken place in all cryptocurrencies, and market forces suggest this will increase exponentially in the years to come. Why? One reason: the elimination of the need to create a taxable event by converting crypto into a government currency. There’s also an ease in
transferring funds for a global sale in lieu of cross-currency. Add that to cryptocurrency’s strong price appreciation potential, and there’s compelling evidence for its staying power.
However, with strong potential comes high risk. Cryptocurrency is notoriously volatile, and there are many questions around how to handle an agreed-upon crypto sales price if the value were to significantly change prior to the close.
But that’s not all – we can’t talk about blockchain and cryptocurrency without addressing non-fungible tokens (NFTs), which represent digital assets other than currency, such as art. This year saw the first two U.S. properties to sell as NFTS. NFTs hold information that shows who owns the real estate, (like title); they contain a private key that authorizes a change in ownership and use the blockchain to provide a tamper-proof ledger of transactions. NFTs allow for the democratization (and decentralization) of real estate by making ownership foolproof and transparent.
Interested in doing a crypto transaction? Here are four key tips:
- Make sure all parties are on board
- Use a known exchange
- All contracts must have U.S. dollars assigned for tax purposes
- Use cybersecurity best practices
5G
High-speed internet is critical to real estate, and 5G is the next wave. The fifth generation of wireless data transmission over a cell phone network, 5G increases speed, latency and bandwidth. What you may not realize, though, is 5G isn’t just for cell phones; it’s available now for home internet use.
According to a recent Verizon study, 90% of homebuyers prioritize fast, reliable home internet and cell service as part of their search. They also rank quality internet connectivity ahead of school proximity, commute time and modern appliances! So, it makes sense that nearly eight in ten homebuyers said 5G home internet makes a home more valuable.
5G can also be utilized in a variety of applications outside of computers and phones. Think of your home’s unique internet of things: the physical tools and objects that contain sensors, software and other technologies that connect to and exchange data with other systems and devices via the internet. Your home requires connectivity for just about everything: thermostats, appliances, smart plugs, alarms, camera doorbells and more. Highspeed internet – and beyond that, high-speed internet with plenty of capacity – is key to living in our modern, connected world.
Beyond those points, 5G comes into importance when you look at consumer moving and workspace trends. According to the same study, nearly 10 million Verizon customers have relocated over the past two years, with over three million of those customers moving between different states. Clearly, with the rise of mobility and remote work, fast and reliable internet connectivity is more important than ever before.
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