A new wave of proptech (property technology) is rising, where real estate intersects with fintech (fintech) Until this year, software-based companies failed to attract enough venture capital. In 2018, the U.S. housing market increased its value by $1.9 trillion, bringing the total market size to $33.3 trillion. With fees around real estate transactions that can consume up to 10% of the property sale price, the size of the new dynamic sector can total up to $170 billion per year.
In the future, these closing process innovations will allow real estate to take part in the e-commerce arena, he says. Levine: We are now approaching a new era of transaction automation, and we are seeing specific trends leading to this point. It is unclear how drastically technology will shrink the roles of traditional real estate market participants in favor of automation.
Recent technological advancements on the transaction end can change the game for high-value assets like real estate. In the world of traditional shopping, you make your payment, and you receive your new pair of shoes in the mail. If the exchange could happen automatically, there is no need for trust layers, and then real estate could become a part of the e-commerce marketplace. Reasons for the delay in transaction innovation lie in the current maturity of the market and in how venture capital operates, according to the author.
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