News, Real Estate Tech, Trends

5 Ways Tech is Disrupting the Traditional Real Estate Model

Technology continues to infiltrate real estate in ways we never thought possible. In Los Angeles, a company is replacing the traditional real estate model with robots and “big data”. Out west in San Francisco, another bold startup is using blockchain to help customers buy homes anywhere in the world. Everywhere you look – the story is the same.

Real estate technology has produced two of the most valuable startups in the nation today – WeWork and AirBnB. But there’s much more to it. This article explores how tech is disrupting the industry as we know it.

1. Direct challenge for the traditional real estate model


Rex Real Estate Exchange – a 2014 startup – seeks to overhaul the traditional real estate model. The firm uses robots and ‘big data’ to lower the cost of selling a home. While a real estate agent will charge a 5-6% selling commission, the company takes just 2%.

Perhaps the main challenge facing Rex’s approach is that both buyers and sellers still value quality personal services from a professional real estate agent. The facts are very straight on that. In 2015 and 2016, 89% of all home sellers relied on a real estate agent.

At the end of the day, most people are still relying on the value a real estate agent provides,” says Adam DeSanctis, a spokesperson for the National Association of Realtors.

But Rex’s Chief Executive, Jack Ryan, argues this could change once people learn how much money they may save using their platform.

Traditional real estate rates are just crazy compared with every other industry in the United States,” he says.

Rex identifies probable buyers by rigorously analyzing consumers’ income, spending habits, location, and similar data. It then reaches out to them through focused advertising on social media platforms and websites such as Zillow.

Although computers do the more sophisticated work, the firm employs salaried real estate agents to guide both buyers and sellers through the transactions. This way, customers get the same service they would with a traditional real estate agent, but at a fraction of the cost.

Rex Real Estate Exchange has so far attracted over $16 million from investors. Four years down the line, the firm has managed to put up office locations in Los Angeles, San Francisco, Austin, San Diego, and Denver.

2. Blockchain powered real estate transactions


Experts predicted digital currencies would at some point in time be used for major transactions. In the real estate context, a San Francisco startup called Propy is taking steps in that direction.

The company recently helped Michael Arrington, found of online publisher TechCrunch.com, purchase an apartment in the Ukraine using digital currency. The title change was recorded the old fashioned way – on paper – but with the blockchain address for the digital transaction inscribed on it.

A few years ago, it would be hard to envision use of digital currencies to conduct such a transaction. But it appears we are much closer. “I can’t really tell you the date. But I think it’s going to happen much faster than everyone anticipated,” says Alex Voloshyn, the Chief Technology Officer at Propy.

In many parts of the world, regulations are changing to recognize blockchain contracts. In the U.S., the state of Vermont is moving in that direction. Propy hopes to position itself as a major global property store dealing in digital currencies.

Real estate insiders who understand digital currency deals say that they have numerous advantages over traditional transactions. “They are more transparent, more efficient, less expensive, and less prone to corruption,” says Drew Nichols, lead agent at Greenville’s Palmetto Park Realty.

3. Smart contract technology


SmartRealty is a Seattle-based startup that is working to apply smart contract tech to everyday real estate transactions. The company has been developing a smart contract template and management system that will handle common transactions in buying and selling properties, as well as rental agreements.

Parties involved in the transaction will be able to build their own contract that is specific to the transaction.

Some of the major benefits this platform will offer include enabling users to securely track payments and efficiently solidify the terms of their agreement. It reduces risk of fraud or theft, and provides a faster, more reliable and trusted system for sale, purchase or rental of real estate property.

4. Virtual and augmented reality


Augmented reality is another real estate technology frontier that has a real possibility of appending to the home buying process. Tech savvy real estate professionals have often used augmented reality to market real estate and entice customers to purchase property in far-away cities.

Since buying a home can be a very emotional process, the technology helps personalize things by putting the buyer in the actual space.

Pandora Reality, a firm based in New York and Istanbul, creates augmented reality solutions for brokers and developers who want to depict the potential of an unfinished space.

Currently, the challenge with augmented reality is that it still does not offer a true sense of realism. But this capability is right around the corner, according to most experts.

Read >> Swanky Apartments with Drone Balconies 

5. Chat bots to answer simple customer queries 


Powered by artificial intelligence, chat bots are emerging as the technology of choice for answering simple customer queries. This rapidly growing technology being used in multiple industries to empower customers while freeing up employees’ time so they can focus on other pertinent tasks.

The good thing about chat bots is their capability to work round the clock. They can furnish customers with a relevant market report at 2 am in the night, and answer numerous customer queries in a matter of seconds.

Chat bots are becoming an instrumental part of the real estate marketing approach, capturing data and generating leads on autopilot.

A good example of a commercial real estate technology startup that’s using chat bots is Truss. This is a Chicago-based real estate firm that helps customers find office space below 10,000 square feet. The company uses an artificially-intelligent chat bot to automate the process of finding office space in cities like Chicago, Houston, Dallas, Miami, Washington and Austin.

The primary feature on their website is Vera, a cartoon representation of the chat bot that beckons visitors to start the process of looking for the perfect space.

Many technology-oriented real estate firms are picking up the use of these bots to improve customer service, improve engagement, monitor consumer data, gain insights, save costs and increase growth.

Investors are betting big on real estate tech


In 2017, investors splashed over $5 billion into real estate technology. That was a huge leap compared to the $33 million invested in the sector 7 years ago in 2010. Although total real estate investing declined in Q1 of 2018 compared to the same stretch last year, there are many indicators this trend will continue to hold. Large real estate firms are increasing investment in new technology as they seek a competitive advantage – and there’s an urgency to find the most promising startups.

Real estate technology startups are getting some major attention from venture capitalists. Here are some major deals that happened in recent times.

  • Late 2017, real estate technology firm Compass announced a $450 million investment from SoftBank Vision Fund.
  • Apartment List is a San Francisco based firm that helps landlords find renters, and only charges after the landlord has success finding someone. The startup raised $50 million from Passport Capital, Industry Ventures, and other venture capital firms.
  • Rentberry, a rental platform that uses blockchain technology to connect tenants and landlords, raised over $20 million in funding through its initial coin offering.
  • Last year, Truss (the Chat-Bot Powered Commercial Space Finder) raised $7.7 million in Series A funding.

From applications that help manage multiple rental properties to machine learning solutions, technology will continue to impact real estate.Through innovation, and investing in promising startups, forward thinking players are positioning themselves to own this future.

Trends

How Agrihoods are Taking Root Across the Country

Inside the Phoenix metro area is a 160-acre residential community known as Agritopia. The central feature is a certified organic farmland spanning more than 11 acres. Here, residents can eye fresh produce to see what’s ripe for picking. There are artichokes, zucchini, tomatoes, olives, carrots, kale, and grapevines…over a hundred varieties of fruits and veggies. The farm also has rows of fruit trees, livestock, and even bees. Much of the produce is meant for residents, many of whom prefer to savor the bounty at the chef-run restaurant within the community.

Agritopia represents a growing trend – agrihoods. These are agricultural neighborhoods where local farm produce is just a few steps away from your front door. Agrihoods are built around a working farm, and appeal to the needs of active families who love to eat healthy and spend time outdoors.

 There are 450 homes in Agritopia, with prices averaged at $400,000 as of March 2018 – according to real estate database website Zillow.com.

On the South Shore of Hawaii’s oldest island – Kaua’i – is the upscale community of Kukuiula. The resort has a 10-acre farm wonderland where homeowners can pick their own tropical fruits, citrus, seasonal herbs, vegetables, greens, and even fresh flowers. Hired help is used to maintain the farm so residents don’t have to worry about planting and weeding. There are al fresco diners and cooking workshops where resident chefs teach homeowners how to turn the bounty into goodies. Kukuiula is an upscale agrihood with home prices ranging from $1.5 million to $15 million.

Farm-to-table becomes mainstream

Agrihoods are firmly rooted in the farm-to-table movement. This basically refers to food made from locally-sourced (mostly natural and organic) ingredients. Farm-to-table restaurants are everywhere from small rural towns to large cities. In 2016, Menus of Change highlighted a trend where entire restaurants are putting ‘plants first’ in their food as the most prevalent for the year. As the vegetable-forward movement continues into the future, we’ll see further narrowing of the gap between the farm and the table.

Agrihoods are cropping up all over the country

Agricultural neighborhoods – agricultural residential communities that essentially take farm-to-table to the next level, are springing up everywhere.

New York

In the New York Catskills, about 2 hours’ drive from New York City is Hudson Woods. This is a 131-acre agricultural community encompassing 25 nature-inspired homes. Home owners can purchase upgrades to have maple trees planted and cared for. Residents can also collaborate with local sugar firms to have their trees tapped for their own batch syrup.

They can take in the experience without going through all the steps themselves,” Drew Lang, the developer behind Hudson Woods, told the Wall Street Journal.

Silo Ridge is an 800-acre development located in the Hudson Valley, New York. Homeowners here have access to a 2-acre organic garden. Beehives, chickens, and goats are being added this year. And a cookery school will show kids how to mill their own flour and make a variety of bites.

Georgia

In Atlanta, Georgia, the 1000-acre Serenbe community is one of the largest agricultural neighborhoods in the country. Over 60,000 pounds of produce is harvested annually from the community’s 25-acre farm.  Much of the bounty goes to Serenbe’s 3 onsite restaurants. The community’s emphasis on agriculture, arts and wellness makes it a model example of the modern agrihood.

Vermont

The South Village agrihood in Vermont is trapped between the Green Mountains and Lake Champlain. It envisages two of state’s most revered traditions – open space and village living. Community gardens, paths for skiing and cycling, and an organic farm are some of the features that might attract potential homeowners to this community.

Ohio

Aberlin Springs is an agricultural neighborhood that opened last year in Cleveland, Ohio. The community farm has vegetables, cows, sheep and chickens. There’s a farm store onsite selling meat, eggs, and produce. Home prices range between $300,00 to $650,000.

Other model examples of agricultural neighborhoods that are taking a lead in the farm-to-table movement include Hidden Springs in Idaho, Willowsford and Bundoran Farms in Virginia, and Skokomish Farms in Washington State.

North Carolina

In Western North Carolina, the Olivette community has a farm that grows greens, fruits  flowers special produce and honey all year round. The bounty is delivered to local restaurants and community residents.

20 minutes outside downtown Durham (NC) – a new Agrihood is in the works. Wetrock Farms is a neighborhood of 141 homes with a 15-acre organic farm. Professional farmers will grow fruits and vegetables here, but local residents can participate at any level. The produce will be available for all through weekly deliveries. Once complete, homes will start at $300,000.

In 2017, property developer Lennar acquired 225 acres farm land near Apex for a planned agrihood community. The upcoming Smith Farms community will have 560 homes, with prices ranging between $300,000 and $600,000. A section of the property will be converted into a community garden for residents.

South Carolina’s First “Agrihoods?”

Closer home in South Carolina, Agrihoods are taking shape. The Cliffs Organic Farm serves residents of ‘The Cliffs’ (a collection of 7 premier communities in Western North Carolina and upstate South Carolina). Also known as the Broken Oak Organics, the 5-acre farm offers produce for local restaurants, and homeowners can stop by to directly purchase what’s ripe for the season every Wednesday afternoon. Homes prices here range from $500 to $4 million, with home sites start at $100,000.

In the Charming city of Greenville (SC) is the ongoing Net Zero Farm community. This is a microhood community with about 20 homes. It’ll offer walking trails, covered picnic space and organic gardens for residents. Homeowners will receive free vegetables with volunteer hours in the gardens.

More agrihood communities are expected in the region over the coming years as developers responding to the growing demands for sustainable, farm-centered communities. Meanwhile, residents of Greenville and other parts of Upstate South Carolina can own their dinner with a backyard garden. Plants that do well in the area include beets, tomatoes, peppers, broccoli, cabbage, carrots, Brussel Sprouts, cauliflower, Kale, and cucumber.

The Agrihood Residential Real Estate Boom

Agrihood communities prize space and nature over traditional luxury amenities. They seek to influence not just how members eat but also how they live. In some communities, residents get unlimited picking rights for berries, greens, and flowers. They may have tomatoes, zucchinis and other vegetables flourishing in their backyard and yet they are not exactly farmers. Planned communities centered around farms are the next stage in sustainable living.

When Nick Jekogian, CEO of Signature Group Investments, bought a 600 acres of tree-covered unspoiled land in California’s Monterey Bay, he realized that the property could the turned into something much more than the typical residential neighborhood. This was the inspiration for Walden Monterey, an ongoing community of 22 homes each occupying 20 acres of land. The views of centuries-old oaks and Zen meditation gardens serve the purpose of a town square. Walden Monterey will feature a treehouse for children, a nature trail, and an outdoor communal farm table. Once complete, each lot will sell for $5 million. Located close to Silicon Valley, the Walden Monterey agrihood community aims to give tech executives an opportunity to unplug from the daily grind.

In Palm Springs, California, a 309-acre now closed golf course is being converted into the region’s first agrihood. The Miralon agricultural neighborhood capitalizes on the farm-to-table movement, and is scheduled to open later in 2018. 1,150 midcentury-modern inspired homes – each designed to embrace the environment and all with solar panels – are being constructed on-site. The previous golf-cart road has been turned into a hiking trail, and the tee boxes will mark dog parks. Potential home buyers here will be treated to fresh-produced olive oil. Thousands of olive trees – some of which are already fully grown – will have the capacity to generate 15,000 gallons of olive oil each year. This is agriculture-oriented real estate at its finest!

How much value does having a garden add to a community?

Access to fresh and healthy foods is arguably the greatest appeal of agricultural communities. Younger homebuyers want local food and nature as opposed to the golf club communities that became insanely popular as a community ‘addon’ in the 1990s. Agrihoods also tend to draw residents and the community together as homeowners can form relationships around shared activities.

We have everything we need, and we’ve made so many connections in the community,” Stephanie Walsh, a resident at the Serenbe agrihood in Atlanta, told Forbes.com.

Families can raise kids with increased awareness on the earth as well as healthy alternatives to the fast food, and property around agrihoods had a much higher resale value to compared to similar units in traditional suburban communities.

As agrihoods narrow the gap between developers and home buyers who value community, sustainability and food, there are benefits for both parties.

How much more does it cost?

Builders have known for decades that real estate with open spaces fetches higher prices. Traditionally, golf courses have been the primary option for developers to add value to a community. But as preferences shift and the farm-to-table movement grows, organic farms are becoming a more attractive alternative. Community gardens can be set up at a fraction of the cost of putting up a golf course (which usually runs into millions of dollars). According to the Urban Land Magazine, costs are comparable to those of setting up other kinds of green spaces (say for instance, landscaping). A 25-acre organic farm, for instance, can be started for well under $100,000. Once constructed, the garden is self-sustainable, with residents paying a small fee to benefit from the produce.

Conclusion

Homeowners, especially wealthy millennials, appear to be shunning golf communities once favored by baby boomers and instead going for the farm. As more people pursue an active lifestyle and develop a connection to their source of food, agrihoods will continue to catch steam.

Do you live – or would you fancy living – in an agrihood? Share your thoughts below!

Real Estate Tech, Trends

Swanky Apartments – Why It’s Time for Architects to Start Building Drone Balconies

Florida’s luxury real estate market is known for its excesses and world firsts.  Just look at something like the Porsche Design Tower in Sunny Isles Beach with its sky-reaching garages for each residence, or the $31M beach front mansion of Highland Beach for inspiration.  But there is a new trend coming: Drones!

According to Lisa Ellman, a drone policymaker working with President Obama’s administration, there will be more than 20 million drones (unmanned) in the U.S. by 2020. That’s in four years time, not a decade. Already, industry leaders have taken steps to make drones an affordable, convenient and useful accessory for the average American. Amazon, the world’s number one e-commerce marketplace, is testing drone deliveries. If all goes well – and it has so far – unmanned aerial vehicles will be landing on your lawn to deliver that latest iPhone that ordered online.


Ever-increasing use for drones

It’s booming business for makers of drones meant to deliver packages, conduct routine crop dusting on agricultural fields, monitor endangered wildlife, inspect oil and gas pipelines, and take aerial photography. The current reality is that most states and municipalities in the U.S have banned the use of these aerial robots due to real privacy and safety concerns. But more open regulation is going to take center stage in due time, and this resistance to progress will eventually melt.

Personal Aerial Vehicles

There’s every indication that early adopters will purchase personal flying vehicles in the near future. Already, some models have been proposed, and others are undergoing development even as we speak. A good example is the Ehang 184 Personal Flying Vehicle, a super-sized drone that can carry human cargo. It’s roughly the size of a very small car and can ferry only one human at a time. A working prototype was shown at the CES 2016. And although it’s airborne for only 23 minutes (10 miles travel) at a time, it’s a good place to start!

Is it time for drone towers on Florida new construction yet?

All this progress raises the question, isn’t it time progressive architects and future-minded real estate stakeholders started building apartments with drone-landing balconies? A building equipped with a drone-ready condo tower in Dubai, Tokyo or any other bustling global metropolis might sell much faster. Of course, large balconies contribute to the appeal of swanky condos, but they could be much more useful if they if they obliterated the need to use the elevator down to the car park, or walk to the subway to get to the office.

The future drone balcony would be big enough to accommodate shipping drones and small electric aircraft. And as the industry gathers momentum, you might not even need to purchase your own drone. You could order a drone-ride with an air-travel taxi app, and jump in right from your abode. Definitely, this would call for thorough safety standards due to the increased air traffic around buildings and other residential areas, but that can be worked through.