A list of addresses and a car: This is how Americans have gone house hunting for decades. And that’s what Zillow CEO Jeremy Wacksman was doing with NBC News recently not far from Manhattan.
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A nice house in Rutherford, New Jersey, was listed for about $600,000. Not far from there, small homes were going for $2 million.
“A lot of things have changed in real estate,” Wacksman said. “But it’s still ‘location, location, location,’ right?”
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Wacksman and Zillow have overseen much of that change. He has been with the digital real estate giant since 2009, long enough to recall a time when online home listings still seemed new and the mere idea of buying anything online, let alone a house, seemed exotic and risky.
But driving around New Jersey on a spring morning, Wacksman talked about even greater changes ahead.
To be sure, many of the macroeconomic dynamics of home buying will remain the same: the challenges of supply and demand, shifting mortgage rates and markets both national and local that can swing with the overall economic outlook.
What has changed is transparency. Thanks in large part to Zillow and the many other online real estate platforms, homebuyers and sellers now have far more information than they did just a few decades ago.
Next up, Wacksman is eyeing the homebuying process itself, boosted by a heavy dose of AI.
Though the car will still have a role to play.
“Longer term, the idea is, of course, you’re going to find your homes on Zillow, and you’re going to drive around and you’re going to save them and favorite them,” he said.
“But then you’re going to click the requested tour button, you’re going to meet your agent, and you’re actually going to decide to buy this house. And that’s where the process really starts, right? Now, you’re spending two to three hours a week over the course of five months, sometimes getting from there to an offer accepted, financed and closed, and we’re trying to build the software so you can do all that right inside the app.”
Wacksman has some competition. Venture capital funding for tech-infused real estate companies — sometimes called proptech — has swelled as investors see opportunity. Proptech investments hit $3.3 billion in the first quarter of the year, up from $2 billion in the same period last year, according to the Center for Real Estate Technology & Innovation. AI is expected to further boost that investment.
And while much of that funding is for companies focused on other parts of the real estate industry, the buying and selling of homes is still fertile ground for plenty of startups, each offering its own tech spin on how to improve the process.
Opendoor, founded in 2014, buys and sells homes sight unseen, touting offers delivered in minutes. Propy raised $100 million this year to use AI and blockchain tech to automate real estate closings.
Zillow is pushing its own tech, including an AI-powered virtual staging feature launched in September. It also offers a drone-powered video service, SkyTour, as part of its move to use AI to make the homebuying process easier and more personalized. In March, it rolled out a full “AI mode,” putting the technology at the core of Zillow’s business of facilitating real estate transactions.
Wacksman pointed to Zillow’s history of adding new features to the platform, from its “Zestimate” function to the more recent development of virtual house tours. With AI, the company is looking to build on those efforts, undergirded by its mountains of proprietary data.
“I think the one constant through all that is you’ve got to build the best product,” he said. “You’ve got to give buyers and sellers a way to get more information, to feel more empowered, because the process is so hard, right? To actually buy and sell a home, you have to try and give people as much of a chance as you can.”
AI, of course, does not come without its own risks. The rapid advancement of the technology has brought with it a flood of synthetic content that can range from generously altered to outright fake. Landlords have already been found using AI to make old properties look new.
In December, the Government Accountability Office warned that “the introduction of artificial intelligence into real estate tools has raised some concerns that this technology could violate fair lending, fair housing, and other consumer protection laws, as well as personal privacy.”
Outside another New Jersey home, a picturesque three-bed, two-bath, Wacksman demonstrated Zillow’s “AI Mode” and “Virtual Staging” technology. Both offer potential buyers a sense of what a house could be like with customized interiors — all without ever having to step out of the car.
None of this is necessarily intended to replace real-life staging or an in-person visit; rather, it is to make the process easier.
Wacksman said Zillow is making sure to disclose when AI is used to alter an image. After all, he noted, cars and in-person visits are still part of the process.
“AI can be used for great things, but it could also be used to misrepresent what a house looks like or what a listing photo looks like,” he said. “The ‘Virtual Staging’ technology is really clear that this is not what the house actually has in it.”
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