Being one of the last markets to embrace digitalization, the real estate industry is actively making up for it by following the most popular real estate technology trends.
The main focus of these businesses and real estate agents is improving property management and investment decisions. To achieve this, both commercial real estate agents and businesses will need to implement some of the main real estate tech trends such as virtual reality (VR), artificial intelligence (AI), and the Internet of Things (IoT).
Also, more startups are likely to receive funding if they use AI and ML, one of the hottest trends in PropTech.
This industry is already enjoying its best times thanks to financial investments, new models, and functions of real estate platforms that keep appearing.
By 2050, the urban population will increase by 75% to 9.3 billion.
This means that real estate platforms will become the most popular and developed.
Our article highlights business and real estate tech trends, market state, and industry predictions.
Top 4 Real Estate Business Tech Trends in 2023
Every year, there are many assumptions about the real estate industry; some are justified, and some turn out to be false beliefs.
Some thought 2020 would be the real estate crash due to Covid-19. But there was only a slight decline in the market. Today, everything is gradually returning to normal. In 2023, we can see how this top sector is again alive.
What are the truest real estate tech trends we expect in 2023? Let’s find out in more detail.
Millennials Are the Leading Commercial Buying Group
Statistics: According to FinanceOnline, millennials remain the largest buyers in 2022 in the real estate industry. The same real estate trend has continued for many years.
Millennials have always been the leading group of home buyers since 2010. And this trend will continue to grow in 2023.
Despite the worldwide Covid time and other restrictions, modern realities show that every year, the population purchasing real estate grows by an average of 5%. Millennials are expected to account for about 55% of the real estate market in 2023.
Millennials’ Real Estate Preferences
Embracing new ways of research: Nowadays, millennials use the Internet to research before hurrying up to buy a house or a flat. They can do so to find their dream homes. According to New Real Estate Trends & Forecasts, here are some interesting real estate-related stats:
- 44% of new homeowners find information online first about buildings for sale,
- 73% of buyers used mobile or tablet search devices for their purchases in 2021.
Means of communication: Another real estate trend is the way of communication. As it turns out, most Millenials text to show interest in a certain property, to ask additional questions, and to book appointments. Phone calls are mostly reserved for urgent matters.
According to the above-mentioned NAR research, agents are embracing the demand for electronic communication: 90% of agents communicate via text, 94% use emails, and only 36% chat with clients via instant messaging.
Millennials’ goals: Millenials are eager to have a home of their own, which is why they don’t want to buy second-handed homes and deal with bad plumbing or old furniture. They want to have a turnkey house designed for them.
Ways to attract the biggest real estate buying group
If you are planning to build a real estate website or some other proptech product, there are 3 core ways to attract the biggest buying group of the market:
Distinguish Popular Features: Besides having the necessary features, your product needs to have features that are currently in demand. This way you’ll be able to keep customers longer on your platform. The whole impression of your company will be more positive, which will be needless to say with all the closed deals.
Here are the most appreciated features for a real estate website, according to the NAR 2019 report:
Improve Your Online Listings: Listings matter. It is the buyers’ first impression of their possible future home. That’s why it should be perfect.
To provide the best user experience, work on the mobile version of your website, upload only high-quality photos, and allow your buyers to see the building inside out by using virtual tours.
The year 2020 showed that houses were in great demand, and not everyone could buy what they wanted. Therefore, in 2023, the process of hunting for dream homes is expected. Property platforms with agents are already on the way to looking for the perfect option for you.
Emphasize Benefits, Not the Size: Everyone who has ever bought or rented a property knows how some customers become obsessed with the property size.
Your website’s right decision is to focus all of the customers’ attention on the perks of a particular building and its location. Based on the NAR research, Millennials care more about the neighborhood they will be living in, not the size of their home.
New Business Models in the Real Estate Industry
To keep up with the new and forward-minded generation, modern real estate technology companies create more and more ways and models to satisfy their customers.
Amazon and the largest residential real estate brokerage company Realogy have teamed up to create a Turnkey solution for home buyers.
TurnKey is a buying program of Amazon and Realogy. In other words, by connecting a customer with a property agent, Turnkey enables a customer to have a voice in the matter of buying.
Moreover, after purchasing a house, Amazon helps turn it into a home by providing free technologies, like installing a TV and free intelligent products, all according to the sum a customer spent on the house.
iBuyer, is an example of a non-traditional business model in the real estate industry. It uses modern technology to make property selling and buying easier. You can do it using an automated valuation model. Since iBuyer’s first appearance, many customers have decided who to turn to first: real property agents or iBuyer. We’re waiting for that new platform with an automated buying and leasing experience.
Marketplaces are Becoming the ‘it’ of the Real Estate Industry
More and more marketplaces are invading the real estate market by introducing a new business model: a platform that is a middleman between buyers and sellers.
Marketplaces are disruptors for many incumbents: Airbnb threatens hotels, WeWork threatens office management companies.
Another rental marketplace is Greater Vacation Rental, built from scratch by Sloboda Studio. It is a rental an online rental marketplace that allows users to book accommodations for vacations. Sloboda Studio has over 9 years of experience building marketplaces with a profound understanding of the business and technology aspects.
However, real estate marketplaces create a new segment in the industry. Above all, many of these marketplaces fall into the sharing economy – the solutions they offer are shareable with others.
The growth of online marketplaces represents a permanent change in how people shop. Global online marketplace sales are expected to hit $5.5 trillion by the end of 2022. With time people’s trust in marketplaces will be cemented and the majority of real estate purchases will occur online.
Examples: Zeus, AirBnB, WeWork.
PropTech is Taking Over the Real Estate Market
PropTech (Property Technology) uses information technology to help people research, sell, buy, or manage property.
With PropTech, real estate tech companies seek to add value to their business through technologies.
Alex Edds, director of innovation at JLL UK, says “On the face of it, Proptech is the digitalization of real estate, but beneath the surface, there is so much more to it than that.
At its core, PropTech addresses fundamental questions of how we experience and extract value from real estate.”
Emerging Trends in Real Estate Europe 2021 shows 78% imply that the use of technologies for real estate companies will trend upward over the next three to five years.
The pandemic has made some adjustments and changed the priorities in the market. Previously lagging real estate assets, such as data and medical centers have become a priority. They’re gaining high demand in acquisitions and leases.
Top 15 Real Estate Technology Trends for 2023
Buying and Selling Websites
Online is becoming the main source of leads in the real estate industry. That is why there has been a mad rush to build a real estate website that helps agents and agencies in their work processes.
Forbes showed that customers’ first source in home searching and information finding is online websites. People also use popular social media platforms like Facebook and Instagram.
Besides using web information services, the National Association of Realtors is trying mobile devices for a number of different activities, including communication with their clients.
Leading real estate websites can offer much more than a single agent. With the below-mentioned web services, customers can find the best residential and commercial properties for sale and rent, either domestically or overseas.
Real Estate Management Software
Real estate management software makes it easier for property owners to manage their real estate and customers online.
Users need to have a lot of features in such management software:
- namely and reporting,
- accounting and planning tenant screening,
- automatic monitoring of insurance policy,
- other vital functions.
Real estate management software saves money and time. It’s going by utilizing the cognitive functions of an efficient computer program for management. This process goes instead of a human or humans.
Examples: Appfolio, Rentec Direct, TennantCloud, Yardi.
High-quality photos and 360° videos will not be enough for cutting-edge Millennials.
A 3D virtual tour is a great millennial-like feature for letting customers explore the property.
The technology real estate technology trend of using virtual reality is not a newsflash.
Zillow, an online real estate tech company, has used this feature for years. 2023 is the year when VR and AR (augmented reality) will enter the mass property market. It will be the truth since this estate tech trend has become popular.
With the increasing rate at which we generate data online, it can now be used to explore and study properties.
It is now possible to create a digital twin of a property using data from IoT and sensors. It provides a 3D digital model of a house with all its features. Such applications can help users predict how the building will hold up against environmental conditions. It can also help them understand the state of a building and fire evacuation plan.
Already, cities in the U.S. are rushing to build digital models of themselves to augment their planning and services. For example, Las Vegas unveiled a digital twin of its 4.3-square-mile downtown.
Property Value Estimation using AI and ML Technologies
Statistical models, machine learning, and big data are used to evaluate property value.
ML algorithms are a great way to predict how much your business will get in commission after every closed deal. Pattern recognition used in ML helps define when a property becomes popular. All in all, these algorithms lead to better real estate deals.
Zillow has created a product called “Zestimate” that, with the help of ML, estimates home prices based on publicly available data.
Want to build real estate software?
Real Estate CRM Software
The commercial real estate technology trend of using CRM for property websites isn’t new. Nevertheless, it’s expected to take a mighty step further in the real estate industry.
The predictions about how blockchain can change and revolutionize the industry are huge. 2023 is envisioned to finally adopt blockchain to bring security, clarity, and efficiency to real estate transactions. There are two ways in which blockchain would help the real estate industry:
Tokenization: It is the usage of cryptocurrency for dividing assets into tokens that will be stored on the blockchain. Tokenization in real estate changes a lot for different participants.
For example, it enables customers from different locations and uses different incomes to be a part of the investment process. Moreover, property owners can sell just a chunk of their property.
Smart contracting: These types of contracts are agreements that bring transactions between buyers and sellers together. Smart contracts speed up the process of verification, search for homes, and property acquisition.
Imbrex plans to launch smart contract-enabled transactions using its own cryptocurrency.
Real estate websites try to personalize the customers’ experience by suggesting properties based on previous choices. Big data will play an important part in real estate in the future. It allows the software to recommend more intelligent and personal searches.
Redfin, for example, uses the entire Amazon Web Services big data stack.
Examples: Trulia, Zillow, Redfin.
First of all, property websites need to be mobile-optimized. Google announced that it would be indexing and evaluating the mobile version of your website first. So,real estate mobile app development is now at the top of its popularity.
In conclusion, you should consider your target audience and choose what to make: a website or a mobile app. This data helps you to kill two birds with one stone.
In past years, besides having websites, many real estate companies launched their mobile software apps. That’s the perfect solution for people to use digital technologies for their property needs.
Examples: Zillow, Redfin, Trulia.
Real Estate Crowdfunding Platforms and Fractional Property Investment
Real estate crowdfunding platforms allow customers to fundraise small amounts of capital from multiple individuals. These platforms are an evolution of equity investment and allow people to become investors and customers. On the other hand, you can raise money from many investors. Crowdfunding offers companies access to capital they might never be able to raise.
Fractional ownership is a method where multiple parties share ownership of a real estate asset, granting each participant proportional usage and responsibilities. Fractional ownership has grown in popularity, especially in vacation destinations and luxury property markets, as it offers more people access to high-end assets at a fraction of the cost. This approach is ideal for real estate investors who want to enjoy the perks of property ownership, especially in prime locations, without the full financial burden.
Drones and Other High-Tech Devices
One of the newest trends in real estate is using drones to collect high-quality aerial images, which provides a powerful and unique perspective when analyzing a property. Drones are used for all types of real estate listings, including apartments, residential homes, vacant land, resorts, and commercial properties.
The modern in-drone camera tech can capture video, multiple overhead map images, and 360-degree panoramas. This offers further details and transparency for potential customers.
Artificial Intelligence (AI) Personal Assistants and Conversational Chatbots
Nowadays, devices used in the PropTech industry produce large amounts of data. Using this data, AI can generate analysis to provide information on current trends, risk assessment, and a better understanding of the client needs.
Processing this amount of data manually can be very time-consuming. However, with the help of AI, PropTech companies can analyze large volumes of real-time data in no time to generate valuable insights.
AI is also providing customers with an impressive user experience. It has changed how people purchase and rent properties. This is because they can now view selections based on recommendations, browsing history, etc.
AI chatbots connect people who are selling, buying, or any other process to the clients 24/7. It processes their requests instantly. It augments team collaboration and increases the number of clients companies can service. AI chatbots even allow them to maintain building equipment more easily.
Advanced Analytics and Data Visualisation Software
It is becoming more difficult to filter information and understand what matters and what does not. However, visualization makes sifting through this information much faster and easier. Moreover, most people process information in a visual form much better than text.
Many business intelligence platforms have a data visualization feature, which is critical for advanced analytics. It helps businesses make sense of the enormous amount of data generated. Information is represented in a graphical form e.g. graph, bar or pie chart, etc.
Real Estate Marketing Automation to Improve Engagement
Almost every industry has adopted some sought of automation within their work process, and real estate is no different. Automation tools like chatbots and virtual assistants are trending now in the real estate industry. When integrated with websites, they can help automate answering frequently asked questions or being first responders. This helps to increase engagement and ensures that visitors stay on the site for longer.
Real estate marketing automation helps relieve agents of many repetitive tasks and keeps them involved in more important tasks.
Examples: RealtyMogul, Fundrise, CrowdStreet, Realcrowd, Groundfloor, Streitwise.
What Is the Most Popular Technology in Real Estate Industry?
There isn’t only one popular technology in the real estate industry, as it varies based on specific needs and preferences. Technologies like VR, AR, AI, and property management software have gained significant traction and impact in enhancing the industry’s property search, marketing, and overall efficiency.
Homepage for PropertyRepair
PropertyRepair is an online platform that was created for tenants and managers to monitor work order status. Our client’s main goal is to ensure that managing the properties and repair experts is a seamless process.
The client came to us with an already-built platform for personal use. However, he soon realized that repair managers in the United States needed an easy and reliable way to hire repair workers and manage orders. This led to the creation of the software called TheScheduler.
Our team’s goal was to add functionality to the software. We reviewed and updated the existing code and created a better scheduling system. Here are some of the features which we added and improved:
- Easy and comfortable registration function
- SMS notifications
- Different automatic statutes for each project
- Financial reports
- Automatic payments
Interested in building a real estate platform?
State of Real Estate Market and Business Predictions
Due to innovation and the adoption of new tech, the real estate industry is growing exponentially.
The growth has been further hastened by the COVID-19 pandemic. So, to understand how the market will change, experts are making different predictions.
Investments in the Real Estate Industry
The real estate market will become far more prominent and global. Real state 2020 mentioned that institutional-grade expanded by more than 55%, from $29 trillion in 2012 to $45.3 trillion in 2020. It may then grow further to $69 trillion in 2030. The predictions show an exciting market future, and this fact can inspire.
In 2023 investors will lead a much greater range of opportunities. Also, the building investment community will provide more property chances for people. It’s vital for those working with funds with shorter maturities and differing return profiles.
40.2% of total market
share ($4.6 trillion)
33.8% of total market
share ($3.8 trillion)
26% of total market
share ($3.0 trillion)
Predictions for the Real Estate Industry
By 2022, the global real estate market will grow to $2,774.45 billion at a compound annual growth rate (CAGR) of 3.2%.
Naturally, in 2020, due to Covid, the market growth and development decreased by more than 2-3%. However, starting in 2021, active recruitment increased by as much as 8% per year.
Asia-Pacific is a significant region in the global real estate market, which accounted for 40% of the market in 2020. Western Europe was the second largest region, accounting for 24%. The same trend will continue in 2023.
Value of the Real Estate Industry
According to the Business Research Company, the real estate industry will reach nearly $7227.13 billion by 2022. This is mostly driven by innovation and technological advancement. It provides people with knowledge that makes them confident in investing or buying properties.
New Features for Real Estate Tech Startups
The startups using AI and Big Data will likely receive more funding. They will be the ones who automate different segments of the real estate industry. Virtual tours will be highly in demand in the digital world. They will be integrated into both leasing and buying platforms.
There are lots of real estate companies that are already integrating technologies like VR into their business process. For example, Sotheby luxury real estate dealer provides a virtual walkthrough option for Android and iPhone users with VR headsets. To achieve this, cameras are placed throughout the building. Prospective buyers can now take virtual tours online to view the apartment.
Another startup pushing AR’s boundaries in real estate is Creative AVR. They have created an app called AResidence which can be used to recreate a lifelike experience of touring a house in any location.
Competition in the Real Estate Market
The real estate market is going to become even more competitive. There will be low mortgage rates and not enough properties for sale. The bidding war for properties will grow and drive a 6% price growth in the first six months. Later on, the demand and supply will stabilize and cool down to 3%.
In August 2022, homes in the US were up 6.7% compared to the previous year, selling for a median price of $406,074. The average number of homes sold went down 17.5% Y-oY. By the end of August this year, 557,412 homes were sold.
Median Sale Price of Homes in the US
Influential Issues on the Real Estate Industry
Besides a possible lack of investments in the industry, there are some other issues that might influence the landscape of the market:
- Economic issues:
- job and income growth,
- available qualified labor,
- interest rates,
- cost of capital and its availability.
- Political issues: the political landscape and government budget issues.
- Development issues: construction costs.
Ready to start a digital real estate business?
To recap, 4 leading real estate market trends will be happening in the industry in 2023:
1. Millennials as the major buying group
2. New business models in the real estate industry
3. Marketplaces are becoming the “it” of the real estate industry
4. Proptech is taking over the real estate market
Many experts say that without proper technological changes in the real estate industry, many companies can disappear.
So, it is crucial not only to know the current real estate technology trends but also to implement them in your business.
The real estate technology trends that will prevail in 2023 are
- Buying and selling websites
- Real estate management software
- Virtual reality
- Digital twins
- Property value estimation
- Real estate crm software
- Blockchain technology
- Big data
- Mobile apps
- Real estate crowdfunding
- Drones and other high-tech devices
- IoT Smart Home Automation as a fast-growing real estate technology trend
- Artificial intelligence (AI) personal assistants and conversational chatbots
- Advanced analytics and data visualization software
- Real estate marketing automation to improve engagement
Keeping up with and implementing real estate technology trends can be the push that propels you above your competitors. However, not every trend is necessary for your business, and some instead slow down growth.
Sloboda Studio has been building and scaling real estate platforms for over 6 years. So, contact us to help analyze the trends that are necessary for your business and implement them.
Frequently Asked Questions
What is the state of the real estate market in 2023?
Despite the economic crisis associated with the Covid time, the global real estate market in 2023 is in a growth stage. Buying and competitive power is not decreasing but increasing at the internal level, allowing real estate website owners to focus on the local market.
What are the predictions for the real estate industry?
The forecasts for the real estate market are optimistic. Most analysts are confident that the tech development and population growth create favorable conditions for the real estate industry and various services related to it.
What are the main real estate technology trends in 2023?
We can highlight 9 main trends:
- buying and selling websites
- virtual reality, AI, ML
- integration of property value estimations
- artificial intelligence algorithms
- IoT and smart home services
- real estate CRM software
- blockchain and Big Data
- Internet of Things
- mobile applications.