• Artificial intelligence has a vast range of applications across multiple industries, and real estate is no exception. With its enormous potential, AI is already making significant inroads into the sector.
• From automated property valuations to assessing buyer interest and virtual tours, let’s explore some of the most impactful AI applications in real estate.
• The benefits? Streamlined bureaucratic processes, faster transactions, easier access to extensive data, and enhanced fraud prevention
• For a balanced and effective evolution, the key challenge is integrating advanced technology with the expertise of real estate professionals.

The revolution is already underway

It’s a trending topic in Italy and around the world. AI is one of the main areas of interest within the scientific computing community. In short, everyone is talking about artificial intelligence. We are, in fact, in the midst of its expansion phase.
This revolutionary technology has applications across numerous industries, including real estate. In this sector, the level of digitalization is not as advanced as in others.

However, this initial technological gap highlights AI’s enormous potential in real estate. Therefore, this is not an unattainable future but a near reality, with some applications already in place.

Have you heard about AI?

Before analyzing AI’s potential in real estate, it is useful to take a brief look at what artificial intelligence is and what it is used for.

AI refers to the design and development of systems capable of machine learning and adaptation, inspired by human learning models¹. AI is interdisciplinary, combining computer science, mathematics, statistics, and cognitive psychology.

AI goes hand in hand with machine learning, which involves designing algorithms that learn and improve automatically through experience and data analysis. These algorithms can be “trained” to ensure high efficiency and increasingly accurate results.

AI and Real Estate: automated property valuation

AI in real estate has a vast growth potential. However, it is already being applied in some areas, such as Automated Valuation Models (AVM).

By analyzing historical data – such as past transactions in a specific area – key factors that determine a property’s value can be identified.  AI can also ensure an accurate selling price. How? Through Image Recognition, which uses user-provided images of a property’s interior and exterior.

This data can be combined with information about the property’s location, such as proximity to schools and public transportation. Additionally, demographic composition, average income, and crime rate in a specific neighborhood can be factored in. In some cases, it is even possible to assess potential risks related to the property’s location, such as hydrogeological and seismic risks and pollution sources.

Examples of AI applications in Real Estate

AVM is not the only AI application in real estate. Here are some other examples:

• Buyer interest assessment, which analyzes a buyer’s search preferences (price range, location, property features). These preferences are matched with listed properties to ensure the best demand-supply match.
• AI-powered digital marketing, enabling buyers to request immediate cost estimates for property expenses, such as heating, electricity, and condo fees.
• Generative AI allows for virtual home staging and design simulations, helping buyers visualize different versions of the same property.
• Personalized buyer assistance through chatbots, which are particularly useful for real-time mortgage consultations. Virtual property tours are also available for buyers who are unable to visit in person.

A noteworthy AI application is machine learning for preventive maintenance. By installing next-generation sensors, real-time monitoring of building systems and other key components is possible. AI processes this data to predict potential failures, reducing maintenance costs over time.

The advantages of AI: speed, information, and transparency

AI applications in real estate offer significant benefits for both industry professionals and prospective buyers.

Firstly, AI simplifies bureaucratic processes and speeds up transactions through digital management of cadastral and bureaucratic documents, electronic signatures, and online contracts.

Secondly, AI provides easier access to vast amounts of detailed information in a clear and immediate manner. This allows potential buyers to gain a better understanding of available properties more quickly. Additionally, AI enhances security and fraud prevention through online activity monitoring and real-time identification of suspicious behavior.

Challenges of AI in Real Estate: balancing human and technological integration

AI development is advancing rapidly across all sectors. In real estate, AI presents great opportunities for professionals such as real estate agents, property finders, developers, and architects.

With AI, construction projects can be tailored to meet people’s real needs, surpassing traditional search parameters. This allows for customized property offerings based on buyers’ characteristics, preferences, and requirements.

However, with opportunities come challenges. Specifically, AI applications in real estate must be built on a deep integration of professional expertise – including emotional and relational skills – and technology. This harmonious blend of human and technological capabilities is what ensures balanced and sustainable development.

NOTE
¹ For further reading: Artificial Intelligence: Meaning and Applications of AI, Osservatorio Artificial Intelligence, Politecnico di Milano