The management and sale of land is a trade as old as history itself. Like many long-entrenched industries, real estate was slower to adapt to the technology and digital wave of the 2000s. Sellers and realtors were quick to reach customers through online listings and sales networks, but overall there didn’t seem much in the way of distinct real estate tech startups.
That being said, there are indicators that suggest 2014 could be a bumper year for the intersection of real estate and technology. A recent Wall Street Journal story notes there are several new startups that might cater directly to the real estate market. Far removed from Silicon Valley, it appears the greater New York City area has become the ground zero for property-focused tech startups.
The most notable fact about this development is the speed at which these startups are drawing venture capital. As the Wall Street Journal story outlines, four different real-estate startups in the greater NYC area have attracted more than $18 million in combined funding since the start of December. As a point of comparison, New York real-estate startups attracted just $11.62 million in the first nine months of 2013. The sudden acceleration in investment and business growth points to startups moving toward taking advantage of new market trends.
As a starting point, the confidence of private equity in real-estate startups is another indication of stability in the property sector. Whether or not this faith is warranted by long-term market trends, it’s clear that major investors are less bearish about property acquisition and real estate oriented business venture.
So What Do They Bring to the Table?
All in all, the new real estate startups are developing business capacities far more dynamic and complex than the online listing and network channels that were the property sector’s initial steps into technology. As the Wall Street Journal report outlines, they’re primarily focused on providing real-time services for both sellers and buyers. One of the flagship products is a service that provides on-the-moment data analysis regarding leasing and sales data. One company in particular, Hightower, is spearheading this effort to provide these analytics tools and data compilation through mobile and cloud services.
Market observers seem optimistic about the chances of many of these new companies. The services they’re providing had long been neglected, while the capacities they bring to the table have been possible for longer than 2013. Granted, the terrible shape of the housing market from 2008-2012 had made these ventures much less promising. Additionally, as the Wall Street Journal story points out, the New York City real estate industry is exceptionally healthy, and the area tends to attract a lot of property-savvy talent.
Ultimately, this could well be a good move for the real estate industry as a whole, as the utilizing of previously neglected tech channels could make homebuying a friendlier prospect for younger prospectives. The real estate sector has industry-specific needs that the greater tech industry had not been fully able to accommodate, and these new channels could help foster sales that would otherwise fail to materialize.
Photo: NW Sunshine