Proptech: The Evolution of the Housing Market

Are you wondering how you can elevate your business and keep up with all the advancements in the housing market? You’re not alone, industry leaders are integrating property technology to evolve in the 21st century. 

Property technology (Proptech) has the ability to elevate the real estate industry in all avenues, from purchase, maintenance, management, and even investment.

It is now an $18 billion industry that can assist with everything from property listing and rental services to mortgage applications, virtual and augmented reality modeling, Internet of Things (IoT) home devices, and property management software. 

The Proptech industry is booming, and for good reason. In a survey of more than 100 real estate industry leaders, two-thirds said that adopting new technologies was a strategic priority.

Reasons for this include effectively utilizing the environment, social, and governance (ESG) data, reducing costs, and the ability to access new revenue sources. Most industry leaders see property technology as an important tool, and the housing market is no exception.

But what exactly is it? And how can these technologies change the market as we know it today?

What is Proptech?

Proptech takes information on platform economics and applies it to real estate markets. The goal of these technological innovations is to speed up transactions for those working in the housing market while making these transactions more secure and reducing the amount of paperwork required. 

The earliest form of Proptech is eCommerce; before the invention of the internet, it would be unheard of to rent or sell your property to complete strangers hundreds of miles away, but after decades of refining online marketplaces, the housing market is booming. 

Innovations in property technology have evolved into interlinked systems; they all have different functions but work together with technologies like artificial intelligence (AI), virtual reality (VR), contract automation, real estate listings, data, the Internet of Things, construction technologies, and even chatbots!

The Rise of Proptech After the Pandemic

The pandemic disrupted life and ushered in a new wave of online real estate tours that limit close contact, with VR home viewing and site visits skyrocketing in popularity and becoming a convenient solution for house-hunting during a modern-day plague.

Redfin.com found that in 2020, walkthrough views where prospective buyers viewed the property online through a 3D scan increased a whopping 560%!

Remote property appraisals have also become more normalized in the last few years, saving time, money, and cutting contact with people and their germs. There is also potential for VR to lead to an increase in sales of prefab buildings.

It may be hard for a potential buyer to imagine the potential of a site, but with the use of VR, they would be able to see and experience 3D representations of layouts, floor plans, and finishes.

Many companies including Compass, Zillow, and Sotheby’s International Realty have integrated this technology into their home viewing models.

Where Do Start-ups Fit In?

Start-ups are currently flooding the real estate market with innovative ideas and creative solutions. With this new wave, the industry is seeing an influx of changes when it comes to management experience and purchasing properties.

Some of these changes include operating buildings in a more sustainable manner, eliminating the middleman from property purchasing, and giving tenants data and insights on how they use their space and shortcuts they can take to more efficiently save power and energy. 

Proptech is implemented by all kinds of start-ups in the real estate industry, including property owner analytics, building efficiency data, and researching market analytics.

One such company is CompStak, which just received $50 million in funding to crowdsource and compile detailed data on office, industrial, and retail lease and sales terms. Currently, they have 1.7 million properties in their database. And they are constantly expanding. 

Spaceti is a Proptech app that allows building managers to quickly and efficiently notify tenants of issues. The app also collects and analyzes occupancy data that give property owners a cohesive understanding of how the space is used. This can help optimize the space, as well as inform renovation decisions. 

Another example of a Proptech-based start-up is igloohome. Perfect for Airbnb hosts, as well as anyone else who rents out their home or office building, the igloohome technology works to add security and ease to the experience.

Users can sync their Airbnb calendar with their igloohome lock, which will automatically generate custom PIN codes only valid for the duration of the stay and send them to the guest(s). 

The real estate industry is one of the largest in the world but is lagging behind when it comes to technological implementation. The goal is to add to the existing formula and to make cumbersome transactions easier, one way or another.

Implementing new strategies, models, and technologies can be intimidating, but it's pertinent for the housing industry to evolve and adapt. 

Chris Pchelintsev, Co-founder of Architecturalist