2 Tech Trends To Watch As They Boldly Intersect With The Real Estate Industry
Real estate development is taking place at a steady clip in most major metropolitan areas all throughout the United States. However, the industry is one that has historically been fraught with mounds of paperwork, lack of transparency and more. But with the expansion of certain emerging technology offerings, the trend is now shifting toward more innovative approaches that will come to completely re-shape the industry as we now know it.
There are a few emerging technology trend stand-outs, but blockchain, as it intersects with real estate, is hotly anticipated primarily because the technology has the potential to completely transform how the data, payments and titles pertaining to real estate and all the surrounding transactions are conducted.
This is about streamlining the process of real estate sales and purchase via smart contracts that expedite deals. Imagine faster audits, more thorough audits and true transparency in identity.
“We believe one of the greatest pain points in our industry today is that people are just not talking enough about is security and transparency,”explains Paul Daftarian cofounder and managing director of Daftarian, a luxury real estate brokerage firm dealing in properties of $5 million and up. “Security in terms of wire fraud is fast becoming a very serious issue in our industry.” Thus, Daftarian says that blockchain affords many potential benefits in the industry but that security and transparency top the list for certain.
Indeed, to address such issues and more a new blockchain-based company called Meridio is already in private BETA testing with a number of individual accredited investors using the platform on a deal-by-deal basis.
“The platform is designed as a mash-up of traditional real estate sites, such as Zillow, and a fintech startup. Our UX experience is focused on creating a familiar platform for users to interact with so that they don’t need to know or understand the blockchain technology powering it to be able to benefit from it,” explains Mo Shaikh, cofounder of Meridio.
In May of 2018, Meridio became the first project to tokenize fractional ownership of a real estate asset where the platform, built on the on the Ethereum blockchain, used smart contracts to automate agreements and eliminated fraud, the need for lawyers and other third parties and reduced paperwork all at the same time.
Shaikh says that future plans for the company include focusing on a variety of real estate assets so investors can choose which investments are most attractive to their personal risk profile and preferences. This list will include includes commercial residential, ground-up developments, and even REITs.
Yet real estate consultant, Andy Dane Carter suggests caution in approach. He says, “Blockchain at some point in the next 20 years will make the real estate industry operate at least twice as fast, but in my opinion, we are a few years away for the technology to be used at broad scale. It’s more about testing and vetting credible partners now in order to be best prepared for later.”
But blockchain is not the only technology on which those who are savvy in the real estate industry are focused. Certainly, IoT is another element that is creating a trend shift in real estate sales and purchases on a completely different level from blockchain’s impact. Sotheby’s International Realty, which recently boasted $108 billion in annual sales, includes smart homes descriptives prominently now within listings of appropriate properties.
“We are increasingly confronted with the expectation of smart home systems in the luxury home space so we are seeing a greater shift to innovative inclusion within properties in order to close a deal. When our clients are spending upwards of $10 to 20 million on a home they expect full-home automation and smart systems,” explains Daftarian.
In fact, he says that given the fact that high-end luxury real estate buyers are typically C-level executives that efficiency is everything from the virtual walk-thru of properties help narrow down their search and save time, to the capabilities of the property once it is purchased. “IoT increases efficiencies and offers major improvements in terms of time management and improved quality of life so you’ll see a greater and greater addition of this because it’s a true value-add,” Daftarian explains.
Drones integrated with IoT capabilities are also a growth area for sales of luxury properties because the technology provides prospective buyers a true view Carter notes.
“I feel that integration of smart homes will catapult truly this industry.” He adds, “I’d also definitely suggest the trend of the 90 million millennials looking for smaller and digitally efficient homes as a big one to watch. This will be dynamic and expansive.”
This article originally appeared in Forbes.