It might not be quite ready for the spotlight, and it hopefully isn’t plotting to destroy humanity, but AI is here to stay—that is, according to RISMedia’s survey of leading brokers all over the country, who largely say that these new machine learning tools will remain a force in the industry.
Hand-selecting real estate executives for their leadership and experience in the industry, the revamped RISMedia Broker Confidence Index (BCI) also found that brokers feel the same about real estate as they did way back in January, as the overall BCI came in at 6.5, identical to the reading taken to start the year.
“Buyer hesitation today is fueled by the three horsemen of the home-buying apocalypse: insurance, property taxes and interest rates,” said Jillian Young, president of Premiere Plus Realty in Florida. “We have fewer closed sales but an increase in pending sales, which indicates a historically ‘normal’ summer slowdown due to travel delaying closings.”
This middling broker sentiment has persisted since the start of the year, as the BCI reading has bounced around between 6.3 and 6.9, after falling as low as 5.3 last November.
But the fact that mortgage rates are almost where they were back then—peaking above 7%—can only be good news for the industry, as homebuilder confidence grows and economists predict better overall outcomes for the economy.
But that doesn’t mean we are out of the woods yet at all, according to Erin Cestero, president of JB Goodwin Realty, San Antonio Division.
“Though our San Antonio market is stable, affordability is becoming a greater challenge with each interest rate increase,” she said.
Most other brokers echoed these concerns around interest rates, with the chance of further hikes by the Federal Reserve uncertain following opaque comments by Chair Jerome Powell last month.
Many factors could end up breaking markets out of the mire, with new inventory or a decrease in mortgage rates both potentially opening the floodgates for what has been extremely persistent demand. The National Association of REALTORS® (NAR) expects to see some relief on rates this year, and there is at least some possibility that new inventory could open up ahead of winter.
The AI revolution
Polling some of the most prominent names and most plugged-in executives, this month’s BCI found that AI—in the form of generative tools that analyze data, create text and images, and interact with consumers—could transform the industry.
The vast majority of brokers said they were at least somewhat familiar with commercially available AI tools like ChatGPT. Asked whether they believed this technology would “reshape” real estate business or transactions, most declined to go that far. Instead, brokers said that AI will integrate into current systems to create more efficiency and productivity.
But 20% of brokers polled said they saw AI as a reshaping force, and all of these reported that they were “very familiar” with AI tools and used them regularly. The strength of that sentiment would point toward a very real potential for artificial intelligence to have a much broader impact on real estate than other tech innovations that drew media attention in recent years.
Exactly what that looks like remains to be seen. eXp CEO Glenn Sanford said on a recent earnings call that his company is in the early stages of integrating AI in the consumer experience, while even smaller brokers are making big investments in the technology.
