Five ways proptech is changing how we live
Tech in real estate is redefining how people live, work and invest.
Efficiency is the answer to labor and supply shortages
Pandemic-fueled shortages of workers and breakdowns of supply chains have driven up construction costs and slowed down building as demand for more and better housing keeps rising. Companies are trying to help the industry digitize and thereby drive down costs and speed up projects. One area ripe for change is the finance side of construction. Companies like CoFi and Built provide underwriting and origination of construction loans. This lets general contractors to pay subcontractors faster, a key benefit for a labor force that needs to get paid, said Ben Narasin of Tenacity Venture Capital. These companies then end up having proprietary data to do better loans. They also are moving billions of dollars of what were paper checks to digital payments, says Mark Goldberg of Index Ventures.
Contactless will be a key word
The physical world has changed since COVID-19, which means technology to manage physical spaces has forever changed. Hotels as well as office buildings are adopting ways to use their space with contactless and remote management, keeping employees and clients safe during the pandemic and saving money on staffing. They’re using technology to manage properties, from access control such as biometrics and facial recognition hardware to software for remote check-in and management, says Zain Jaffer, partner at Blue Field Capital. Meanwhile, real estate agents are helping home buyers stay safe during the pandemic by showing homes remotely, which has changed the tools for home shopping, inspections and other aspects of the process.
We’ll monetize homes beyond the mortgage
Home prices are rising, and finding homes has gotten more difficult even for renters. Many people found themselves house-rich but cash-poor in the pandemic, and want to pull money out. Companies such as Point, Unison and Hometap buy, say, 10% of a home to provide access to cash as an alternative to a loan. Others have trouble just buying a home with the soaring pandemic demand. Upstart rent-to-own companies like Divvy Homes and ZeroDown provide a different path to homeownership for consumers. As interest rates rise, those alternative financing arrangements may draw more interest.
Real estate investing will open up to the masses
The scarcity of housing and high demand has led to a rise in home values. Investors have noticed. With interest rates still relatively low and the stock market volatile, more are investing in homes. With services like Roofstock, individual investors can buy single-family homes as investments, or they can buy fractional real estate through Fundrise and others. Such offerings were previously available to high-net-worth investors in real estate funds, but new products are making these services available for retail investors.
Tech will help manage mass aging in place
The population is aging, and more people want to stay in their homes longer or can’t afford to move to nursing homes. That could mean products such as AI tools to remotely monitor elderly people for health scares like a fall, as well as smart devices that can detect water leaks or fires when the occupant might be less alert. There will also be moves to on-demand services for driving people to appointments or basic household work. Finally, there is the potential for more demand for VR products — from a market segment that metaverse developers might not be considering.