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Artificial intelligence is taking over real estate – here's what that means for homebuyers – CNBC

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Brick-and-mortar real estate may seem like the only tangible thing left in an increasingly virtual world, but it too is being taken over by artificial intelligence.

Some of the biggest names in the business, such as Compass, Zillow and LoanSnap, are now employing AI to help find buyers the perfect mortgage and the perfect home. And for real estate agents, it may already be a game-changer.

Most real estate data is public, from land records to title documents, purchase price and even mortgage liens. The trouble was it was an onerous process to go to local offices and obtain all the information. Not anymore. Computer algorithms can now go through millions of documents in seconds, looking through property values, debt levels, home renovations, and even some of a homeowner’s personal information.

At LoanSnap, a San Francisco-based mortgage lender, AI is used in various steps of the mortgage process, from finding the perfect loan type for a borrower to finding the right investor for the loan.

First the borrower’s financial information is put in. Then the system “takes all that information, forecasts it out into the future and looks at thousands and thousands and thousands of options,” said Karl Jacob, CEO of LoanSnap. “That’s different ways of paying off debt, different loan options, and this is one of the first times AI has been turned into something that helps consumers versus harms consumers.”

And for refinances, he said, “We’re building a financial model for someone, and showing them exactly how much money they’re losing on a monthly and yearly basis, and then showing them how they could potentially fix that issue and save money in the future. Again, in seconds.”

Jacob admits that pretty much every company now claims to use AI in some respect but said not all are really applying it to its full potential.

“Ninety-five percent of it is rhetoric, right? It’s a popular term. People glom on to things like that and say, ‘Oh yeah, we use AI too.’ AI is actually machines thinking and/or looking at possibilities that would not have been looked at before,” he added.

So AI can be helpful for borrowers, but it also seems like the holy grail for real estate agents hunting for listings in today’s ultra-competitive housing market. The supply of homes for sale has hit several record lows since the start of the pandemic, when buyer demand suddenly took off. Agents are desperate to find new listings, and AI is providing a new entrance.

“The traditional agent would go knock on the doors of a lot of homes. Now AI helps you find the homes that are most likely to sell in the next 12 months, and it does so by triangulating all the data associated with the home, like when the home last sold, how long the owner has occupied the home, what rate the home sells at in that particular area,” said Joseph Sirosh, chief technology officer at Compass, a real estate brokerage.

AI “triangulates all of that information to predict which home is likely to come for sale, so the agent can now approach that homeowner, offer his or her services, and have a much higher probability.”

Sirosh said Compass agents have a 94% higher chance of winning a potential listing they target with AI than not. Agents can supposedly price the home more exactly and target marketing more specifically.

For those searching to buy a home, all the data available can also help them to find exactly what they’re looking for, rather than touring house after house.

Using Compass’ AI, they can evaluate the price of their property in comparison with other properties in the market, search for specific types of homes in ultra-specific locations, input desired square footage of indoor and outdoor spaces and then get immediate alerts when something hits the market.

Zillow recently upgraded its popular home price Zestimate,” claiming it now uses neural networks, or machine learning comparable to how the brain works.

“In the case of the Zestimate algorithm, the neural network model correlates home facts, location, housing market trends and home values. As a result of this update, the Zestimate can now react more quickly to dynamic market conditions, providing homeowners with a more accurate estimate [prediction] of a home’s current value,” according to a Zillow release.

The company is now incorporating this new learning into its direct cash-offer homebuying business, Zillow Offers.

So far, the Zestimate is an initial cash offer on about 900,000 eligible homes across 23 markets.

“With this latest update and increased Zestimate accuracy, the number of homes eligible for a cash offer will likely increase by 30%,” according to the release.

AI is not doing anything that traditional research couldn’t accomplish, but it does accelerate the process dramatically, which in a fast-moving and ultra-competitive market, is crucial to these businesses.

“AI allows you to go to the self-driving dimension, which is AI outsources the heavy lifting that’s associated with a real estate transaction: the complex data, compliance, the paperwork, the finding of the home, the negotiation, the offers. I think that really makes a transaction go much faster. It is simpler, and it’s often cheaper,” said Sirosh.

With this speed, he said, artificial intelligence can conquer the most human component of any real estate transaction: stress.

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Windsor-Essex real estate market slows down — so sellers pulling out all the stops – CBC.ca

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Windsor’s sizzling real estate market is seeing a slight slowdown — and it means sellers have to up their game to draw people in. 

Prices are still high in Windsor-Essex but realtors say more listings over the last several months are leading to fewer offers on individual homes, putting buyers in a better position with more options and less competition.

“When buyers have more choice, sellers have to do a little bit more to stand out from the crowd,” explained Danial Malik, a broker at ReMax Preferred.

“They have to do more in terms of professional photography, videography, staging. They want to make sure there’s as many eyes as possible on their property, so it gets sold for top dollar.”

The average price of a Windsor-Essex home in September was $552,186, according to data from the Windsor-Essex County Association of Realtors. That’s 27.4 per cent more than September of last year. 

Listings have also doubled from what we saw at the beginning of the year (1,035 listings in September compared to 475 in January).

One home stager says business has doubled

“Things have picked up quite a bit,” said Julie Kapitan, owner of Lemon Tree Living, a home staging company in Windsor-Essex.

Julie Kapitan, owner of Lemon Tree Living, says demand for her home staging services has doubled since June. (Katerina Georgieva/CBC)

At the start of the year, there was a “buying frenzy,” and homes were selling quickly with or without staging, she said.

“But something shifted I think in May and June and the calls started to come in,” Kapitan said. 

Her business has doubled since then. 

She said it helps people imagine living in the space.

‘Property has to stand out’

Aditya Soma with the WinCity Real Estate Team says staging is “crucial” for any sale.

Realtor Aditya Soma says home staging is crucial. (Katerina Georgieva/CBC)

“There is more inventory,” he said.

“That means your realtor and your stager, you know, have to do a fantastic job by pricing it right, by presenting it well to attract as many buyers as possible.”

Soma added that some sellers list their homes and try to sell without a stager, and later realize they need to “revamp” their approach in order to get the offer they’re hoping for. 

Malik explained that he’s also seeing more cancellations of listings in recent months. That’s because, given the trend of the last year or so, expectations are very high for sellers. 

“They’re trying different realtors or they’re trying different strategies to get that dollar amount, whereas the property … may not be worth what they’re asking for,” Malik said.

WATCH | Broker Danial Malik on what the current market means for buyers:

Broker Danial Malik on today’s market

3 days ago

Broker Danial Malik explains what the current real estate market climate means for buyers. 0:59

Hence, there’s a stronger lean toward marketing tools like home staging — though it can be a pricey option, depending on what you need. 

Kapitan explained that staging could start at $1,000 if accessories are the only items required by the seller. However, if furniture is required, home staging could cost $5,000 or more depending on the size of the home. 

She also works with house flippers in the community to help them get the best possible price.

Flippers turn to stagers

Jami Jacklyn, a partner at M & J Doors Ltd., a St. Thomas company that flips houses, recently acquired a Windsor home that cost them close to $200,000, they invested between $30,000-$50,000 into renovations. After listing the home for $199,000 and using Kapitan’s home staging service, it recently sold for more than $100,000 over asking. 

“Previous, in my real estate career, I didn’t think it was important, to be honest. I’ve sold houses before,” Jacklyn said. 

“Now that we’re doing this in more volume, I have a massive respect for stagers and it has helped my business tremendously.”

Jami Jacklyn flips houses with her company, M & J Doors. The home behind her, a recent project, sold for more than $100,000 over asking. (Katerina Georgieva/CBC)

Jacklyn explained that her company tries to choose “eyesores” in the community to flip in order to improve the neighbourhood, while still being able to sell the renovated property to first-time home buyers, even though the work on the home drives that price up. 

But with or without a stager, Kapitan suggests depersonalizing your home by removing family photos, de-clutter, avoid patterns, use white linens and white towels, and clean so that your home is spotless.

Meanwhile, even though the lull in the market puts buyers in a better position, it’s still a seller’s market. 

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Hamilton mixed-use dev. gets height-limit exemption – Real Estate News EXchange

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IMAGE: A rendering of the proposed high-rise multiresidential development at 75 James St. S. in downtown Hamilton. (Courtesy Fengate Asset Management)

A rendering of the proposed high-rise multiresidential development at 75 James St. S. in downtown Hamilton. (Courtesy Fengate Asset Management)

Ground has broken on the latest project in downtown Hamilton, a mixed-use development at 75 James St. S. which will tower more than 30 storeys and include over 500 residential units.

The Labourers’ International Union of North America’s LiUNA Pension Fund of Central and Eastern Canada (LPFCEC) holds 100 per cent interest in the development. Fengate Asset Management is the investment manager, developer and asset manager, while The Hi-Rise Group is the development manager and SG Constructors is the builder.

The Downtown Hamilton Secondary Plan states buildings shall not exceed the height of the Niagara Escarpment, which works out to about 30 storeys, but the partners applied for and received permission from the city to exceed the height restriction with the James Street building.

“Working collaboratively with city staff and local stakeholders, the building height was determined with consideration for relevant planning policies, precedent projects and addressing local housing needs,” Fengate managing director and group head of real estate Jaime McKenna said in an email exchange with RENX.

An application filed with the city called for a tower of up to 34 storeys.

Plans for the James St. S. property

The James Street site was formerly a bank and was acquired for an undisclosed price in 2018. It was assembled in 2020 with another site at 44 Hughson St. S. – which is the current home of the LiUNA Local 837 and LiUNA Central and Eastern Canada regional offices.

It’s still to be determined if the residential component of the development will be a purpose-built rental apartment or condominium. It will include office and commercial space and a heritage component.

“Due diligence is underway to determine the best model to meet residential needs in downtown Hamilton,” McKenna wrote.

The development will help address significantly increased residential needs in Hamilton from people of all ages and occupations, including students, millennials priced out of the Toronto market and retirees.

The residential units will range in size from studios to three bedrooms. Building amenities will include fitness facilities, party rooms, relaxation lounges, private rooftop green space and underground parking.

LiUNA and the development

“LiUNA is incredibly proud to be addressing the increasingly critical residential needs in Hamilton,” Joseph Mancinelli, LPFCEC chair, LiUNA International vice-president and regional manager for Central and Eastern Canada, said in an email interview with RENX.

“I myself, a Hamiltonian, have a personal passion for the future of our city, addressing current infrastructure needs that will continue to foster economic development, job opportunities and growth.”

Mancinelli said the location is transit-oriented and pedestrian-friendly, offering easy access to necessities, work, school and entertainment.

“Our LiUNA HQ of the Central and Eastern Region as well as the LiUNA Local 837 office at 44 Hughson will be seamlessly integrated into the development and expanded with new office space, keeping the artistic and historic façade of the front of the building, honouring the foundation and history of those before us,” said Mancinelli.

“Further, a number of live/work units will be provided, catering to local small business needs.”

A 2025 completion is being targeted for the development.

The development partners

LiUNA has half-a-million members across North America, including more than 140,000 in Canada, who predominantly work in construction.

The LPFCEC was established in 1972 and is one of the fastest growing multi-employer pension funds across Canada. Its diverse investment portfolio has more than $10 billion in assets.

Fengate Asset Management is an alternative investment manager focused on infrastructure, private equity and real estate strategies. It has a total asset value of more than $20 billion and offices in Toronto, Oakville and Houston.

Fengate Real Estate is involved with more than 75 properties and investments. The completed value of its portfolio is more than $9 billion and it has more than $4 billion in value under development.

The Hi-Rise Group is a fully integrated development and construction company that was founded in 1979. It initially functioned as a merchant builder that sold most of the projects it developed and built, but it now holds a number of properties across Ontario.

SG Constructors was founded by Matt Stainton and its management team has accumulated more than a century of experience working on construction projects.

The two-tower King William Residence in Hamilton and the revitalization of Yonge Eglinton Centre, Yonge Sheppard Centre, 66 Wellington St. W., 111 Richmond Street West and 180 Wellington in Toronto are among its projects.

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Evergrande’s Proposed Shift From Real Estate To Electric Vehicles Fails To Convince – Forbes

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Hui Ka Yan has finally revealed his plan to save China Evergrande. He wants the embattled property developer to shift its focus from real estate to manufacturing electric vehicles, but skepticism abounds.

Despite having never sold a vehicle, Hui’s aim is to turn away from Evergrande’s main business and become an EV maker within the next decade, the state-run Securities Times reported late Friday evening, citing an internal meeting held on October 22.

The proposal sent shares of his Hong Kong-listed EV unit, China Evergrande New Energy Vehicle Group, soaring as much as 17% on Monday before closing the day with a gain of 11.4%. But the company still trades at just a fraction of its peak market value of $86.7 billion that it reached in mid-April after tumbling 94% since then.

Analysts, however, have expressed their skepticism. It remains unclear whether Evergrande, now close to collapsing under $305 billion in total liabilities, has the expertise or capital to compete in China’s increasingly crowded EV field.

“Evergrande used to have a strategy of buy, buy and buy,” says John Zeng, a Shanghai-based director of China forecasting at consultancy LMC Automotive, referring to the property developer’s previous EV-related acquisitions. “Its approach was very simple and unpolished, and no one really knows how much technology it has mastered. ”

Hui currently has a net worth of $11.6 billion that is largely based on dividend payouts received over the years. He was a former steel factory worker when he first established Evergrande in 1997. Although he had no prior experience in producing EVs when he first announced his ambition to do so in 2019, he has since funneled more than $1 billion into a series of acquisitions that saw him gain control of National Electric Vehicle Sweden AB (NEVS) and buy a majority stake in battery maker Shanghai CENAT New Energy. The company said its first EV model Hengchi would be delivered from its Tianjin factory early next year, according to an October 11 post published on Evergrande’s website.

But its EV unit warned less than a month ago that it was encountering a “serious shortage of funds,” according to a September 24 stock exchange filing. The company said it had “suspended paying some of its operating expenses and some suppliers have suspended supplying for projects.”

Evergrande itself warned last week that there was “no guarantee” it will be able to meet its financial obligations. The company did not respond to emailed requests for comment.

Even if Hui eventually manages to begin producing EVs, how he would sell them is another question with no clear answer, says Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight.

“Building a sales channel from scratch is very capital intensive, and Evergrande doesn’t appear to have channels of its own,” says Zhang. “Plus, its current model is a concept car that is still quite some distance away from mass manufacturing and selling.”

Justin Tang, head of Asian Research at New York-based investment and advisory group United First Partners, says the billionaire may simply be trying to boost investor confidence. Hui also pledged during the same meeting to deliver Evergrande’s unfinished properties to homebuyers, saying the company “in principle” won’t buy land over the next ten years, and would reduce the scale of its property development business “by a large margin,” according to the Securities Times report.

The company said separately via its WeChat public account that its 40 real estate projects in places including Guangzhou and Foshan are progressing “smoothly and orderly.” Last week, Evergrande narrowly avoided default by paying a $83.5 million bond coupon just before a 30-day grace period was about to expire.

But Evergrande faces more interest payments down the road, and $3.5 billion of its offshore bonds are expected to mature in March. The cash-strapped company has been struggling to raise funds through asset sales and other means, and market doubts over whether it can meet its debt obligations continue to persist.

“Where is the money coming from?” asks Tang, adding that Evergrande “doesn’t have time as a friend,” and its proposal of saving itself by making cars has “lots of questions but no real answers.”

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