The Impact of AI, for Real Estate

ChatGPT, there is almost no way around it anymore. Some real estate agents say, they can’t imagine working without it anymore. Agents who don’t have a background in writing, love to use the program to create listings, making this task less time consuming.

At the moment, the AI tool is helping agents to improve their work and make it more efficient, but what will the future bring? Is ChatGPT capable of replacing real estate agents entirely, and what's the impact on the the Real Estate industry?

Will Artificial Intelligence make work unnecessary?

Before we take a deeper dive into the world of Real Estate, let’s have a look at ChatGPT and its influence in the workforce in general.

ChatGPT has experienced an unprecedented surge in traffic and user engagement within a remarkably short period of time. This AI tool boasts over 100 million users and attracts a staggering 1.8 billion visitors per month (April-end data), suggesting that its implications may extend far beyond our current comprehension. This is just the start…

With each successive version, ChatGPT becomes increasingly intelligent and exhibits a deeper understanding of human communication. Fundamentally, ChatGPT operates as a statistical engine, detecting patterns in human-generated content and predicting the most appropriate word to follow a given context. While it doesn't possess true comprehension, the latest update demonstrates an ability to derive responses from a wider range of information, surpassing the boundaries of the given text. When comparing responses from ChatGPT 3.5 and ChatGPT 4.0 to the same question, we can see two distinctly different answers. While 3.5 provides a typical machine-generated response, strictly responding to the steps outlined in the query, 4.0 goes beyond that, incorporating an abstract representation of the spatial and temporal dimensions in which the subject matter of the question unfolds.

The increasing mainstream use of Artificial Intelligence in applications raises numerous questions regarding its advantages, potential risks, and its impact on the future of work. Last week one of Microsoft's executives urged lawmakers to accelerate and create regulatory frameworks.

Admittedly, ChatGPT is not infallible, but neither are humans. Achieving a level of performance that closely approximates human capabilities is a monumental achievement and one that carries significant implications.

The pivotal question now is whether we should fear this advancement and how it will impact the economy, and Real Estate?

AI tools like ChatGPT pose a threat to certain job sectors.

According to research, AI & job loss statistics indicate that the worldwide economy could lose hundreds of millions of positions to AI over the coming decades, especially in industries where soft skills aren’t a meaningful part of the job description. Already about half of companies are using AI in some way. On the other hand, AI could also create about 97 million jobs and generate $15.7 trillion for the economy by 2030 by eliminating mundane tasks and helping workers enjoy more creativity.

For instance, the specialty of writing may witness a reduction in the number of writers required. Ultimately, a small group of skilled writers will likely emerge, contributing their expertise to enhance the tool's capabilities, thereby enabling it to generate more refined and coherent written pieces. While this profession may not entirely vanish, fewer individuals will be needed, and only those who bring substantial creativity to the table will endure.

If expertise becomes readily scalable, it is conceivable that a majority of individuals will no longer need to engage in traditional work. In many cases, people will be able to directly obtain expert answers from these AI systems.

This paradigm extends beyond writing and encompasses numerous other professions.

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It is predicted that in the US a lower proportion of the workforce will be affected by the new wave of automation than in the European union.

However, the numbers are high in both instances: In the States about 47% of total employment is at risk of seeing their job being (partly) taken over by Artificial Intelligence. In Europe, Romania scores the highest with almost 62%, followed by Portugal with 59% and Greece with 56,5%. We must note that these numbers don’t necessarily imply that the entire occupation will disappear, or that parts of it will be automated.

However, researchers estimate that by 2030, 45 million Americans could lose their jobs to AI automation, which is a 6 million increase from 2017, where estimation showed that 39 million Americans would be automated out of their work.

Thus, the question remains: What will the rest of us do?

It is worth noting that many of the jobs we perform today did not exist a century ago, and conversely, many jobs from a hundred years ago no longer exist today. From this perspective, as a society, we have already proven our resilience to significant changes.

To sustain the economy during this transformative period, we must maintain two fundamental tasks. Firstly, we need to continue consuming goods and services. Secondly, we must persist to explore and experiment in order to discover novel employment opportunities.

Now, how does this tie into the real estate sector?

Agents, investors, homeowners, buyers and sellers can all benefit from AI. AI is able to make some good predictions. It can calculate market value and detailed renovation costs for homeowners, it can make predictions on the future of certain locations and provide accurate and valuable information to investors, and for home buyers it can find perfect matches in a short amount of time.

If buyers, owners, and sellers can do so many things themselves with the use of AI, will real estate agents still be necessary? For now, we don’t expect the profession to disappear completely. Most people still want human interaction and the trust in AI is not 100% there yet. AI tools, like ChatGPT will make a real estate agent life easier, as it helps them doing their job faster, more efficient, and cost effective.

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