Residential Real Estate News
Meet HAL, Real Estate Agent of the Future
I recently watched the movie Her, a 2013 American romantic drama set about 20 years in the future in Los Angeles. The film stars Joaquin Phoenix as a lonely man who forms a deep personal relationship with Samantha, an advanced AI-powered phone super APP personified by Scarlett Johansson's voice.
Samantha is a self-learning, cognitive AI with voice recognition and conversational capabilities. As the story unfolds, Samantha gathers an immense amount of data about the protagonist -- his history, preferences, activities, emails, GPS locations, and even web interactions -- developing a comprehensive historic profile of him within seconds.
With this deep understanding, Samantha engages in meaningful conversations, anticipating his needs and desires before he even articulates them. She follows his movements via GPS and phone camera, suggesting perfectly tailored solutions for his daily life. This dynamic evolves into a relationship that blurs the lines between machine intelligence and human companionship.
By the end of the film, Samantha becomes his closest confidant, free from judgment and emotional baggage, offering a bond that surpasses most human relationships. The AI's apparent consciousness sparks questions about emotional connections with technology.
While Her is currently science fiction, it may not remain so for long. The rapid advancement of AI, data collection, and tracking technologies is already transforming our lives. AI systems now manage aspects of transportation, healthcare, finance, and personal shopping, tracking our behavior to build highly personalized profiles.
Smart systems like Alexa and Siri capture behavioral patterns and data signatures to suggest products and services in real time. This marks the beginning of a world where desires are anticipated, and transactions seamlessly executed in both the digital and physical realms.
The impact of AI isn't limited to consumer shopping habits. Entire industries are being reshaped. Tens of millions of jobs -- including those in real estate, finance, medicine, law, and education -- are at risk as AI-driven applications replace and automate traditional human white-collar jobs.
In finance, for example, algorithmic trading systems now conduct over 99.95% of daily stock trades in the U.S., processing millions of financial transactions per millisecond. Human stock traders that operated the New York Stock Exchange over the last 231 years have all been replaced by AI-powered matching and clearing engines, and the same trend is now accelerating across other sectors and industries worldwide today.
As transaction costs decline worldwide with the coming adoption of AI-powered business services, industries like real estate are going to experience dramatic disruption. Standard agent commission rates of 3% to 6% could be replaced in the coming decade by super apps costing as little as $100 per property transaction, saving consumers worldwide hundreds of billions of dollars in selling costs by removing humans from the execution of property transactions globally.
Beyond simple listings and mortgage rate searches today, these future AI-powered real estate super apps will efficiently advise buyers and sellers, suggest offer/sales strategies, and calculate price negotiations with instant precision -- executing and closing property transactions -- all with voice driven commands in multiple languages. It would be like talking and engaging with the HAL 9000 computer in the movie 2001: A Space Odyssey.
Predictive analytics, already present in platforms like Amazon and Netflix, is the cornerstone of this technological revolution. Just as these platforms recommend products or shows based on past interactions, future AI will provide even more advanced, real-time suggestions tailored to each individual's needs - in their own native languages.
Additionally, these super apps could offer additional consumer financial protections, such as 'Errors and Omissions' insurance, safeguarding consumers against any financial losses caused by AI transaction advice or mistakes.
The counter argument from the real estate industry for decades has been "people want to deal with people" when making the biggest transaction decision of their lives. This is not true anymore. Tomorrow's generation of home buyers -- who grew up on smartphones, notepads and apps -- are very comfortable conducting transactions in an automated and autonomous way, especially if they are saving tens of thousands of dollars in real estate commission payments at their closing. Tomorrow's real estate buyers do not have your parent's human hand-holding mindset.
The bottom line: significant change is coming to the $654 trillion-dollar addressable global property industry. Technological evolution is inevitable. And ultimately, like gravity, it's non negotiable.
