Nearly 70 percent of brokerage leaders who responded to the latest Inman Intel Index earlier this month expect to invest in technology in 2024, with many now saying artificial intelligence is top of mind.
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For all its enticing luster in theory, brokerage tech is often not that sexy in practice.
The vast majority of brokerage tech investments in 2023 were related to the fundamentals of their CRM, lead generation, website, transaction documents and HR software, according to results from January’s Inman Intel Index.
Not exactly the most enthralling list.
But as proptech companies reach a more polished stage of rolling out AI-enhanced products, brokerage leaders appear to be taking note.
In its flagship monthly industry sentiment survey — also known as the Triple-I — Inman Intel extracted a range of insights on tech investment from 1,029 real estate professionals from the brokerage, proptech and mortgage sectors.
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The good news for proptech entrepreneurs? Brokerages are about as open to investing in new tech in 2024 as they were last year. But the tools they want to invest in are increasingly centered around the promise of newer AI capabilities.
This report breaks down this shift in mindset in the ever-changing world of brokerage technology: what these leaders want to invest in, why they’re willing to invest now, and what it will take to coax more reluctant broker-owners off the sidelines.
Read more in the full report below.
The state of brokerage tech
The survey’s 1,029 respondents included 324 people who identified as broker-owners or executives at brokerages or real estate associations.
These leaders revealed they had a healthy appetite for real estate tech over the past year.
The high-level takeaways:
- More than 3 in 4 brokerage leaders told the Triple-I that their companies invested in new tech over the past 12 months.
- The remaining 1 in 4 said they opted to stick with their existing tech infrastructure last year, declining to invest in new products.
It’s clear that most brokerage leaders at any given time are on the market for new tech.
But as Intel explored in this recent analysis, many are still waiting to see the return on their recent investments.
- Of those brokerage leaders who did invest in tech last year, 35 percent said they have already reaped the expected benefits, compared to only 10 percent who said they have not.
- Still, more than half of brokerage leaders who responded to the survey said it’s too early to tell whether their investment would pay off.
Intel’s 2023 tech spending breakdown
In addition to how many invested in tech, Intel asked what specific solutions brokerage leaders were investing in over the previous 12 months.
Here were the proptech areas that attracted the most tech investment from brokerages in 2023.
- The most popular tech investment made by brokerages in 2023 was in lead generation or CRM software — 29 percent
- The second-most popular class of tech upgrade was related to improving or optimizing websites — 24 percent
- Coming in a strong third place were investments made by brokerages in document and transaction digitalization tools — 17 percent
- The biggest remaining share of respondents pointed to investments they made in software for their finance, human resource or back-end functions — 14 percent
But perhaps more interesting is what brokerage leaders say they’re hoping to invest in over the year to come.
Proptech’s future
A similar share of brokerage leaders appear to be on the market for new tech this year, the Triple-I found.
- 69 percent of leaders told the survey that “yes,” they expected they would invest in new tech in 2024.
- 21 percent gave a hard “no,” for reasons examined below.
- Most of the remaining 10 percent who selected “other” expressed some degree of uncertainty over whether they would be on the market for new tech.
Why are nearly 1 in 5 brokerage leaders so certain they won’t invest? For many, it’s simply because their tech does what they need from it, for now.
- 37 percent of brokerage leaders who don’t plan to invest in tech this year said it was because of recent investments they’ve made or tech that is generally up to date.
- But a significant chunk of this subgroup named cost considerations (19 percent) or concern about 2024 revenues (17 percent) as reasons not to invest.
- For 10 percent of this group, the experience of getting burned with a recent tech deal has scared them off. That’s how many said they were sitting out because of previous investments that didn’t generate the expected return on investment.
Still, the table is set for a good deal of proptech sales in 2024 as brokerages continue to navigate a down market that may be on the road to improvement.
And many of them are closely interested in the promise of AI tools as this area of proptech continues to mature, the Triple-I found.
- 40 percent of brokerage leaders who do intend to invest in tech this year said they were looking most closely into AI.
- That was significantly higher than the second-closest choice of lead generation/CRM, which garnered a 26 percent share of this subgroup.
- Website and SEO improvements made up 17 percent of respondents who said they plan to invest.
- And 8 percent of this group said they were looking ahead to financial, HR or back-end software investments.
In addition to these, some respondents offered written responses to what proptech or AI solutions excite them most right now.
Here’s a sample of what they said.
- “I’m not sure what excites me the most. I don’t want my people totally substituting AI for their actual efforts, more of something to assist them.”
- “Marketing, stay in touch with the customer which in our case is the agent but does not take the place of the human interaction.”
- “AI lead followup.”
- “Using for back office systems to help agents.”
- “Quicker responses.”
- “Restb.AI [property image analysis].”
- “Perplexity [an AI-powered search engine].”
- “The power of an AI assistant.”
- “Ad writing.”
- “Prospecting AI.”
- “Big data.”
- “Voice.”
- “Conversational AI for lead nurturing.”
- “Nothing at all. Actually concerns me a lot.”
- “None — is a Godless invention.”