Real estate is data-driven. That makes it a key space for innovating with artificial intelligence (AI).
Computers can now digest huge data sets. The patterns they find can be used in market forecasts and even single home value estimates. Zillow applies AI in the home valuations it calls Zestimates. Zillow and Redfin now collaborate with OpenAI to elevate the experiences they offer through their websites. And Rocket Mortgage applies AI to approve loan applications in minutes.
Suddenly, everyone in the field is looking for ways to implement AI. The technology has become essential for business survival.
AI Isn’t Just Nice to Have. It’s Must-Have.
Artificial intelligence is integrated into anti-fraud systems. It’s processing payments. It’s making a wide range of customer service functions easier to automate. It’s gradually improving chatbots, so online communications can become truly useful and professional. Granted, the machines are on a learning curve. But they do not forget the corrections they’re given. It’s just a matter of time before they master their roles.
Automated assistants are already guiding investors to make profitable adjustments to their operations. Property owners and managers are paying attention. They’re relying on AI to advertise openings, screen prospective renters, collect rents, schedule repairs and maintenance, and communicate to people on all of the above.
AI is also part of the evolving state of interactive home tours and building models. AI can help us sell and buy properties as well as help us maintain them. Which we do with our AI-enhanced smart home tech.
AI allows owners to manage properties from a distance, by phone. And it supports all kinds of apps that improve safety, security, and comfort at home. Smart locks and doorbells, thermostats, cameras, lighting timers, and devices that can warn us in advance of potential leaks or bursts.
AI-powered controls can decrease the size of our carbon footprints. They can improve our building and repair methods. And they can help us communicate with informed precision.
The other side of the coin? Our devices become portholes into our personal and professional lives. Sometimes, companies that control data also control what’s accessible to us and what’s not.
Can Regulators Keep Up?
Federal regulators are examining AI. They hope to protect organizations and consumers from preventable risks.
To that end, on June 1, 2023, a collection of agencies (the FDIC, Comptroller of the Currency, the Federal Reserve, the National Credit Union Administration, the Consumer Financial Protection Bureau, and Federal Housing Finance Agency) notified the public of their proposed federal rule to control lenders’ use of AI in home appraisals. This would impact decisions to approve or deny credit and mortgage loans.
The goal is to have lending institutions adopt quality-control standards, ensure fair and accurate estimates, and avert conflicts of interest. After all, artificial intelligence will have major impacts on people’s lives. It will vet buyers, investors, and renters. It will evaluate people’s professional histories, credit scores, income, debt and assets. It will flag people as creditworthy — or not. It will determine the interest rate a borrower has to pay.
Lenders, under the rule, will need to carry out periodic reviews of their systems. And their AI will be regulated so as not to run afoul of anti-discrimination laws. Why? To deal with a problem dubbed algorithmic bias. When computers “learn” bias from the data they digest, they can build discrimination right into their models.
A recent entry on the Arnold & Porter law firm’s blog says the agencies are including an anti-discrimination requirement because it follows the Biden Administration’s approach as reflected in its Blueprint for an AI Bill of Rights, which includes algorithmic discrimination protections.
Looks like AI regulation is something everybody needs to watch. And we will.
Supporting References
Jeremy Bowman for The Motley Fool: Ai In Real Estate How Artificial Intelligence Is Changing the Real Estate Market (updated May 22, 2023).
Paul Lim et al. for Arnold & Porter Kaye Scholer LLP: Federal Agencies Propose Quality Standards for the Use of Automated Valuation Models in Real Estate Enforcement Edge: Shining Light on Government Enforcement (Jun. 13, 2023).
And as linked.
Image credit: Sanket Mishra, via Pexels.