The real estate industry is deeply personal and overwhelmingly systemic. On the one hand, the real estate market is responsible for what is often the most important and lasting financial investment of a person’s life; on the other, it represents the tip of the iceberg for the nation’s overarching economic health. With this dichotomy, it’s no surprise that the real estate industry is subject to constant examination and disruption.
Emerging technological trends and platforms consistently pop up across the market; all are designed with the same overarching goal: to make it easier for people to buy and sell their homes, and subsequently, boost the vitality of the overall market. With recent reports warning of impending market doom and gloom, technological advancements that help people find specific properties through artificial intelligence, explore homes through virtual reality, or design the interior makeup of a residence through augmented reality are not only novel; they are also necessary.
One advancement that is sparking a wave of interest from industry stakeholders to individual buyers alike is the integration of blockchain within the real estate ecosystem. The blockchain’s decentralized ledger, which makes data and transactions fast, secure, and accessible to all, can–and most likely will–streamline every step of the real estate process.
To gain a better understanding of how disruptive technologies are transforming the industry, I recently sat down with Matthew Herrick, CEO of Deedcoin. Deedcoin is an organization sparking positive change by harnessing the decentralized power of the blockchain to facilitate tokenized real estate transactions. By moving sales to the blockchain and allowing home buyers to purchase via DEED coins, the platform lowers traditional commission fees from 6% to 1%, ultimately carving out a system that empowers homeowners and buyers, rather than brokers.
What is the current state of the real estate market? Is there an upward trend in home buying?
I would say the market is up from last year, and sellers are benefitting from it. Home prices are up nearly 10% and have reached their highest peak since 2012. Supply is down, demand has steadily increased, and homes are selling at a rate 10% faster than usual. Although these are all positive signs, industry downturn is typically cyclical–often occurring every 9-11 years. Since it has been ten years since the last downturn, it’s crucial that homeowners proceed with home purchases for the right reasons.
What are the most disruptive technologies coming into the real estate market?
Virtual Reality and 3D Imaging are changing the way people conduct real estate. Deedcoin is now a leader in the real estate industry thanks to our partners at Cappasity. Cappasity provides exclusive VR and 3D Imaging technology only available to Deedcoin agents. Blockchain technology is also disrupting the industry by making data entry secure, unalterable, and easily shareable.
A blockchain MLS (multiple listing service) system increases the transparency of individual properties by allowing agents to see a property’s entire history–not just its strong selling points. Listing sites like Zillow won’t tell you if a house had black mold, or a fire, or, even, a disclosure three sales ago. But by moving listings and transactions to a decentralized blockchain protocol, comprehensive data related to a single property becomes unhackable, immutable, and accessible.
Technology is also helping the industry prioritize transparency. Through our partnership with Origin, and our adoption of their decentralized marketplace Protocol Erc-725, Deedcoin has already begun building its decentralized no-cost MLS system.
How do you think this technology will change the way people market real estate properties?
Advancements in 3D imaging and VR tours have propelled growth, making it easier for agents to market properties and buyers to experience them. The agents who are not already adopting these visual systems are essentially making themselves irrelevant. I think people have become accustomed to having more and more choices, so the ability to tour houses hundreds of miles away from each other in seconds is a tremendous benefit. If home buyers can visit homes all over the country at any time without leaving their living room, this immediately becomes the new industry standard.
As I mentioned before, Cappasity is spearheading growth across the real estate VR niche. We depend on their technology to give potential buyers seamless property tour experiences. Through Cappasity, Deedcoin agents can record 4K videos of properties on their smartphones and stitch the videos into an interactive VR environment. The potential homebuyer accesses the VR environment and can walk through the home, room-by-room, from virtually anywhere on the planet.
What do you think of the National Association of Realtors (NAR)? Are they doing a fair job at marketing real estate properties in the US?
I can say I’m not a big fan of the NAR, because I consider them akin to an oligarchy that hurts agents a lot more than helps them. Within the confines of this structure, agents are forced to pay dues every year to maintain MLS access. But this access offers little value thanks to other listing sites out there like Zillow and Trulia. In addition to hurting agents, the NAR also does not have the best interest of homeowners in mind. As a lobbying agency with over $200 million in annual revenue, they campaign to keep commissions at 6% while publicly proclaiming themselves as a consumer advocacy organization. I’m not alone in my viewpoint as the Federal Department of Justice has sued the NAR for price fixing on more than one occasion.
Do you think these technologies will make it easier to buy and sell real estate globally?
Any technology that eliminates the need for spending endless hours driving around and touring homes is a good thing. Cappasity’s 3D and VR technology allows homebuyers to interact with and shop more houses in a shorter period and from any location across the country.
Additionally, access to the MLS via a decentralized protocol allows agents to streamline the property-hunting process. For example, through Origin’s decentralized marketplace, DEED token holders can easily connect with DEED agents; a DEED customer in California can quickly connect with a DEED broker across the country in Florida when looking to relocate and can find their next home while saving thousands of commission dollars in the process.
Emerging technological ventures are heeding demands of homeowners who no longer want to feel powerless in their home buying and selling processes. Disruptors like Deedcoin are not just growing their own market shares; they’re also applying cutting-edge technological resources to transform the industry from broker-centric to consumer-centric.