Tech in 2023: Shifting from 'nice to have' to 'have to have'
Tech leaders from Roof AI, MoxiWorks, Constellation1 and Zillow weigh in on the state of tech — and where it needs to go in 2023.
- Tech has become essential in real estate but lacks the "one-click" ease of other industries.
- Simpler. More efficient. Better. Those are the benefits companies should focus on when considering new tech in 2023.
- Even the best tech can't substitute for relationship-building, the foundation of real estate.
The real estate market slowdown is giving the industry some breathing room, and many companies are using this time to think about improving the customer experience. Technology may be ready to help.
From CRMs to transaction management software, tech has become essential in real estate. And new products are popping up all the time. Some are newsworthy, like OpenAI's ChatGPT, which could help produce listing descriptions and other content, but plenty of others are in the works. Some are less splashy, but could be instrumental in creating a homebuying experience with fewer clicks and less paperwork.
It's something many top tech leaders agree needs to happen as real estate companies play catch-up compared to other industries, including travel and dining.
"On the consumer side, we, as an industry, still have a lot of work to do," said Pierre Sabbagh, CEO of Roof AI Inc. "The digital customer experience is still as clunky as it's ever been. When Netflix knows what you want to watch, and Spotify knows which music you'll love … real estate consumers still have to fill out forms and wait on someone to reply. They're still expected to save a property search and favorite a listing in 2023."
Sabbagh added that it's even tougher for agents trying to deliver an easy buying or selling experience.
"On the agent side, we're simply expecting too much from them. They're suffering from choice fatigue in tech with too many options to choose from," Sabbagh said in an email, adding that the training is also subpar. "These software gadgets turn out to be fundamentally flawed and end up requiring manual work... No wonder why agent adoption is suffering."
So, will 2023 be the year of better, simpler, more intuitive technology? Here are some insights from experts in real estate tech.
Focusing on the basics
With the real estate industry expected to remain in slow-down mode next year, a shift from nice-to-have back to have-to-have is expected, said MoxiWorks CEO York Baur. MoxiWorks, based in the Seattle area, is a software company that manages leads and transactions for brokerages.
"Brokerages and their agents will quit chasing shiny objects, get back to basics, and focus on technology that helps them generate business from their core audience — their sphere of influence," Baur said.
That will drive productivity for agents, allowing them and their brokerages to capture market share in a down market, Baur said.
"This will be especially true for the strong-brand, full-service brokerages and at the expense of the discounters and new model brokers," Baur said.
Automation provides a way to 'do more with less'
A down market is often a time when two other trends emerge — automation and better analytics — said Andrew Binkley, president of Constellation1, which handles front office, back office and data services.
Improved analytics allows agents to fine-tune and better target their marketing, he said, and automation improves efficiency.
"As the market continues to cool and margins tighten even further, brokers will be looking for ways to do more with less," Binkley said. "Smart automation is a way to reduce repetitive tasks and human error, reduce operating expenses, and free up brain power for strategizing, roadmapping, and doing things that add more value."
New innovations may end up on the back burner
While the market slowdown provides a great opportunity to bring more offline processes online, it will still be a challenge for everyone in the industry, said Susan Daimler, president of Zillow.
"Affordability remains the biggest obstacle for home buyers today — higher mortgage rates and the subsequent pullback in buyer demand and market cooldown have the potential to stifle innovation across the industry as companies focus on their core businesses," Daimler said in an email.
She said that at Zillow they remain confident in their strategy because of the innovations they've made with Premier Agent and ShowingTime+ to simplify real estate transactions for agents and their clients.
One 2023 goal for Zillow is making it easier to book a tour. Daimler noted that currently only 30% of buyers on Zillow get to see the home they want at the time they requested. It should be as easy as booking a restaurant reservation, she said.
Tech or no tech, it's still a relationship business
As agents and companies consider their next moves, they also need to remember what's more important than the technology, Baur said.
"The most notable real estate tech milestone in 2022 was the wakeup call that real estate isn't about tech — it's about relationships," Baur said.
"Countless billions of investment dollars and all the fancy tech in the world hasn't changed the fact that consumers rely on agents to guide them through the most emotionally and financially significant transaction of their lives."