For Proptech Adopters, Waiting Is One Of The Hardest Parts: Triple-I

Key Takeaways:

– Over 80% of real estate company leaders invested in technology in 2023, and 75% plan to do so this year.
– More than 60% of leaders believe it is too soon to evaluate the return on their 2023 tech investment.
– The biggest challenge in implementing technology is getting buy-in and adoption from users, followed by researching the best technology and cost.
– Real estate agents and brokers are hesitant to share information due to competition.
– The median age of real estate association members is 60, which may hinder technological adoption.
– The most impactful technology tools used in real estate businesses are eSignature, lockbox/showing tech, and cloud storage.
– Social media, customer relationship management, and the local MLS provide the highest number of quality leads.
– Lead generation and CRM software are top priorities for brokerage leaders.
– Lead generation and CRM technology will be most impacted by artificial intelligence in the next 12 months.
– 52% of respondents were not familiar with blockchain, and 44% believe AI currently impacts real estate.

inman:

Brokerage leaders are still waiting to see the returns on their 2023 technology investments, according to the latest results from the Inman Intel Index. Read on for the biggest takeaways.

This report is available exclusively to subscribers of Inman Intel, the data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

The real estate technology arms race to keep up with the competition — not to mention keep talent — continues apace.

More than 8 out of 10 real estate company leaders invested in technology in 2023, and 75 percent said they would do so this year, according to the December Inman Intel Index survey. 

That survey, also known as the Triple-I, additionally revealed that over 60 percent thought it was too soon to evaluate the return on their 2023 tech investment.

Considering over half who did invest spent money on lead generation and customer relationship management software, a delayed payoff is unsurprising. But it comes against the backdrop of one of the slowest years in home sale history.

 

But this delayed gratification is not simply because of the recent housing downturn. Intel found that waiting for investment payoff is just one of many layers of friction real estate companies encounter before and after deciding to ante up for tech.

If you buy it, they will (maybe) use it

Asked for their biggest challenge in implementing technology, 40 percent of broker-owners named “Buy-in / adoption from users” as the preeminent challenge. That share was nearly double that of each of the next two closest choices: “researching what technology is best” and “cost.”

The outsized challenge of technological adoption isn’t unique to residential real estate, but some structural issues exacerbate the problem. This includes the nature of how industry information has traditionally been shielded and shared. 

While public companies and REITs do, as obligated, provide vast quantities of data to investors, real estate agents and brokers are instinctively trained to protect any information not required to be entered into an MLS. Similar to comps and cap rates in the commercial real estate world, local knowledge and insights are agents’ gold. They are loathe to share anything that might become public or help the competition.

A related point on demographics is double-edged one. Experience is often what consumers value most in a real estate agent, and industry leaders constantly reinforce the idea that decades of human experience present a firewall that artificial intelligence can never fully breach.

According to the National Association of Realtors, the median age of its membership is 60. For some, conquering Facebook Live is an achievement; implementing multiple software systems, familiarizing themselves with blockchain technology, and finding time to learn generative AI prompts could be a digital bridge too far.

According to NAR’s 2023 Technology Survey:

  • Thinking back on the last 12 months, respondents found that these technology tools used in their businesses were very impactful: eSignature (79 percent), lockbox/showing tech (66 percent), and cloud storage (48 percent). 
  • 92 percent of respondents use Facebook in their real estate business, 68 percent use Instagram, 52 percent use LinkedIn, and 26 percent use YouTube.
  • The top three tech tools that have given respondents (or their agents) the highest number of quality leads in the last 12 months were social media (54 percent), customer relationship management (36 percent), and their local MLS (24 percent).
  • Respondents found that these technology tools provided by their brokerage were very valuable: eSignature (67 percent), Lockbox/Showing tech (53 percent), transaction management (45 percent), and video conference (40 percent).
  • 52 percent of respondents were not at all familiar with Blockchain. 32 percent of respondents believe that Blockchain technology will have an impact on real estate in three to five years.
  • 54 percent of respondents were somewhat familiar with AI. 44 percent of respondents believe that AI currently has an impact on real estate. 

Where’s the lead?

Over 52 percent of broker-owner respondents to December’s Triple-I who invested in technology specifically isolated lead generation and CRM software, but several who selected “Other” listed those two things.

Further solidifying that lead generation software and CRM toolkits are top of mind for many brokerage leaders, “lead generation” stood out in an open-ended question about what excites them the most about artificial intelligence and proptech.

It’s not just the consumers who are eager to see what technology can do to advance the world of lead acquisition and client relationship management. About 40 percent of proptech respondents said that lead generation and CRM technology will be impacted most by artificial intelligence 12 months from now.

Email Chris LeBarton


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Property Chomp's Take:

Brokerage leaders in the real estate industry are eagerly waiting to see the returns on their technology investments made in 2023, according to the latest results from the Inman Intel Index. The survey revealed that over 80% of real estate company leaders invested in technology in 2023, and 75% of them plan to do so again this year. However, more than 60% of respondents believe it is still too early to evaluate the returns on their tech investments.

One of the reasons for the delayed payoff is the fact that many broker-owners invested in lead generation and customer relationship management (CRM) software, which often takes time to yield results. Additionally, the slowest year in home sales history has also contributed to the delay in seeing returns on these investments.

Implementing technology in the real estate industry comes with its challenges, and the survey results shed light on some of them. The biggest challenge reported by broker-owners is the buy-in and adoption of technology by users, with 40% of respondents identifying this as the main hurdle. This challenge is exacerbated by the traditional nature of the industry, where information is often guarded and not readily shared. Real estate agents and brokers are hesitant to share information that could benefit their competition.

Another challenge is the demographic makeup of the industry. The National Association of Realtors reports that the median age of its members is 60, and many agents may struggle to adapt to new technologies such as blockchain and artificial intelligence (AI). While some agents have embraced social media platforms like Facebook, Instagram, LinkedIn, and YouTube, others are unfamiliar with emerging technologies like blockchain and AI.

Lead generation and CRM software are the top priorities for brokerage leaders, with over 52% of respondents investing in these technologies. Many are excited about the potential of AI and proptech to improve lead acquisition and client relationship management. About 40% of proptech respondents believe that AI will have the most significant impact on lead generation and CRM technology in the next 12 months.

In conclusion, brokerage leaders in the real estate industry are eagerly awaiting the returns on their technology investments made in 2023. While the adoption of technology presents challenges, such as buy-in from users and the reluctance to share industry information, the potential benefits of lead generation and CRM software, as well as emerging technologies like blockchain and AI, make the investment worthwhile. As the industry continues to evolve, it will be interesting to see how technology shapes the future of residential real estate.

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