Real estate is a booming business. In 2023 alone, residential real estate is estimated to dominate the market with a projected market volume of US$88.9tn with an annual growth rate (CAGR 2023-2028) of 4.7%, which would result in a market volume of US$ 142.90tn by 2028.
So, the question is, how do you get to be on top of the game in such a lucrative business? Unlike in the past, when companies made decisions based on individual’s experience, guts, and instincts, today, things have changed.
Now, businesses rely on data to make informed decisions. The whole process involves data collection, analysis, and drawing conclusions.
But as it is, the whole idea of data is proving to be tricky because of human error and because some data are too complex for humans to decipher patterns. And here is where data analytics and AI come in!
What’s Data Analytics?
In simple terms, data analytics is the analysis of raw collected data to make discoveries, identify patterns, and draw conclusions about information.
Data analytics helps businesses optimize their performance and be more efficient, which will maximize their profits. Above all, data analysis helps real estate businesses make informed decisions.
How AI Is Used In Data Analytics
To understand this, let’s first answer the question, what is artificial intelligence? Artificial intelligence is the ability of computer systems to perform tasks that require human intelligence and discernment.
Not so long ago, data analytics relied a bit on human input. What do we mean by that? Let’s say, for example, you want to analyze and predict the price of a property in your area.
What would normally happen is you would do some research to determine historical sales, neighborhood sale prices, and other economic indicators. Then, you would feed all these data into a computer system (if you have one) or draw conclusions.
This operation is tiresome, susceptible to bias, and is not the best cost-effective method. With AI, things have become better and easier.
Artificial intelligence can collect the data for you, analyze it, generate visual models, and make predictions. Human input has been greatly reduced, thereby reducing the margin of error. For more information about data analytics and AI, check out Jelvix.
Importance Of Incorporating Data Analytics And AI In Your Real Estate Software
You should consider getting custom-made real estate software that uses data analytics and AI. And yes, you need one. Here is why you must incorporate data analytics and AI into your custom-made software.
- Enhanced decision-making – Data Analytics and AI empower real estate professionals with data-driven insights that guide strategic decisions. Gone are the days when decisions were made based on instincts.
With AI analytics, you won’t have to second guess your decisions. Additionally, the margin of error is greatly reduced with the use of such tools.
- Market analysis – With the ability to analyze market trends, evaluate demand & supply dynamics, and identify emerging opportunities, your real estate business can stay ahead of the competition.
AI analytics can predict future trends with higher accuracy than humans. Using data analytics and AI, you will learn about new market trends before anyone else.
And as you are already aware, in real estate, the best way to cash big is to enter early into new opportunities before being saturated.
- Improved operational efficiency – Real estate professionals can save time and resources by automating repetitive tasks and streamlining processes.
For example, using AI-powered chatbots, you can handle easy and common customer inquiries and provide instant responses. As a result, you will probably need fewer customer care assistants, thus reducing your overall cost.
Additionally, since AI can easily feed on data from databases, fieldwork can be greatly reduced, saving you many operational costs.
- Accurate property valuation – Traditionally, property valuation relied heavily on manual processes prone to human error or bias.
Inaccurate valuation is something you don’t want in real estate. If you undervalue a property, you will make less money than you should, or even worse, make losses.
On the other hand, overvaluing property can have you wait for ages without finding a buyer. However, with data analytics and AI, property valuation becomes more accurate and reliable.
- Risk assessment – Yes, it’s true that every business has its own set of risks. But wouldn’t it be better if your business would operate with reduced risks?
AI and data analytics can help you assess the risks in various products by analyzing various market trends in the past and using predictive models.
Any risk you will be taking would be a calculated risk, which means risks with a higher probability of success.
- Personalized marketing – Personalized marketing is becoming increasingly important in today’s competitive real estate market. Every customer has his/her preferences and needs, and knowing what that is can be very advantageous to your business.
Blind marketing has never been a good idea. Your business could lose money marketing the right product to the wrong people.
AI analytics can analyze customers’ behavior and generate tailored adverts, increasing conversion probability.
- Predictive analysis – Predictive analysis is perhaps one of the most powerful capabilities offered by data analytics and AI in the real estate industry.
Models from predictive analysis can forecast future outcomes such as property prices, rental demand, or market trends.
With such information, as a real estate business, you will know where to invest and what ideas and ventures to prioritize. The result is a successful real estate business.
If you are in the real estate business, it is clear that you need to have custom-made software that uses data analytics and AI.
Custom-made software can automate routine tasks, accurately predict market trends, and identify potential investment opportunities.
With higher accuracy, efficiency, and profitability, it is clear that data analytics and AI are important aspects of modern real estate software development.