We’ve been discussing lately the possible impact of the encroachment of technology in the real estate industry, especially artificial intelligence. What are investors supposed to do when the process of locating deals (querying all the various lists out there for potentially distressed houses and homeowners) is taken over by AI or automated to the point where someone else always finds them first? Is it going to render the humans obsolete? Then I remembered a book I read once called What Every Manager Needs to Know about Economics. One of the chapter take-aways was this – a robot can build a car, but a robot can’t drive a car. (I know, I know – self-driving cars. But the logic still holds.)
There may come a time when a bot or some software can identify potential properties faster than we can, but it’s still going to require a human to meet the humans involved and negotiate the deal. At least for now, it will still be humans who do the repairs. And houses will still be bought and rented by humans, who will live in them.
I think changes in how people make their decisions about housing is a more important (if less interesting) conversation. As more and more people opt for other arrangements than the traditional single-family residence or duplex (think mobile homes, tiny homes, modular, manufactured, apartments), the same sort of dynamic is going play out in those areas. The investors who don’t adjust their approach to this industry and expect to keep doing the same thing they (we) have always done, are the ones who are at risk of becoming obsolete. But that will be because of failure to adapt to the changing behavior of humans, not because of technology.
As I was writing this, I heard this TED Talk. Not exactly on point, but interesting –