PropTech or Real Estate Tech in the USA is one of the hottest sectors for entrepreneurs, multi-billion dollar startups like Wework and AirBnb are best examples of the opportunity Real Estate Tech offers in the USA. Often considered the global superpower and easily the most powerful nation in the world, the United States of America, or the USA/US or just America is surely one that leads the wagon for technological innovation, entrepreneurship, and tech adoption. A federal republic of 50 states, USA is the fourth largest nation in the world with its capital city as Washington DC. This ethnically diverse and multicultural nation is home to more than 324 million people, a lot of whom are global immigrants, spread over an area of 3.8 million square miles. This gives us a fair idea of its large size, power and culture background.
The diversity of the American landscape is very interesting, as it has physical environment ranges from the Arctic to the subtropical, from the moist rain forest to the arid desert, from the rugged mountain peak to the flat prairie. Measured in terms of GDP, USA is the world’s leading economic power with a nominal GDP of $18.45 trillion. It’s capitalist mixed economy flourishes due to the abundance of natural resources, its massive agricultural input but mostly to its advanced industries. Due to its sheer size, USA is an important factor in world trade and is the largest importer of goods in the world. By providing a sustained healthy economic life, USA attracts many immigrants that come looking for a higher standard of living and living the big American dream. This gives us enough background to build on the current scenario for Real Estate Tech in the USA and how PropTech is flourishing here.
It is also interesting to note that the US is the source of and the destination for a lot of the world’s investment capital. This Bright Lights, Big Cities country, attracts and gives the most investment in the world and is also the entrepreneurship hub of the world. It’s world cities of LA, Las Vegas, Chicago, Miami, Boston, San Francisco and New York City are known worldwide, and some for their startup ecosystem. This also makes it a conducive environment for companies to sprout up and flourish in the sector of real estate tech in the USA.
Real Estate Tech in the USA
Though the sector of real estate tech and property tech (PropTech) is nascent itself, the USA along with the UK can take the credit of most innovations in this space. Real Estate is the largest asset class in the USA, and its value was calculated to be at $40 trillion, in a 2014 report from the Federal Reserve. In the US, there are more than 86000 real estate brokerages and 61,000+ real estate developers, which makes a market ripe for disruption by technology.
The USA has led the baton for real estate tech development in the world for some time now, and it inspires other nations (and supports them) to innovate more. One of the more popular and global products in real estate tech that was born in America in Airbnb. What better example than Airbnb to showcase how American companies are completely reinventing the wheel for real estate tech and giving individuals a new way to live. Airbnb is an online marketplace and hospitality service, enabling people to lease or rent short-term lodging including vacation rentals, apartment rentals, homestays, hostel beds, or hotel rooms. It has today become a global product that presents in 191+ countries and more than 65000+ cities. It was founded in August 2008 in San Francisco, California.
Another winner in the segment of real estate tech is the American company WeWork, which is in the business of transforming buildings into beautiful, collaborative workspaces. It has changed how companies view and use offices and it is now a global product that has 217 Office Locations across 53 Cities. It is a whole and soul New York City product, born in 2010.
There are various technologies in play for the sector of real estate tech in USA like IoT (Internet of Things), VR (Virtual Reality), Drones, 3D printing and mapping, cloud computing, Big Data as well as robotics. Let’s see some of the leading American companies that are changing the way PropTech is in the US, other than the listing leaders of Zillow and Trulia, that are providing avenues for users to search and seek properties online.
VTS (View The Space)
VTS is New York City’s star baby and US’s leading leasing and asset management platform for landlords, agency brokers and tenant representatives. With custom reporting, marketing help, and market intelligence, VTS is a comprehensive solution.
CompStak gathers real estate information that would be pretty much impossible to find using a crowdsourced model. It shares this information with leading brokerages, institutional investors, lenders, and owners across the US and UK, changing the way PropTech works in the US.
With the tagline of ‘Sell your home the minute you are ready’, OpenDoor provides a unique solution for home sellers. It takes care of selling and buying property for you; you can just request an offer, review and accept it, and move to your next home. It is a new concept for the real estate tech in the USA.
Want to have a low-cost way to invest in a private market real estate? Then Fundrise is your solution. It is an online investment platform for crowdfunding investment into the real estate market.
It is an interesting platform for venue providers and space seekers to discover and connect for office space needs. LiquidSpace provides a platform for discovery and transaction of office space, without the legal and compliance complexities.
Floored is a New York City-based company that creates interactive 3D graphics and technology. These can be used to create floor plans or an interactive game-like experiences of a property.
REscour is Market Intelligence for CRE (Commercial Real Estate) Professionals that enables users to efficiently aggregate, visualize, and access external and internal data.
A New York City product, Compass says that it is “building the first modern real estate platform, pairing the industry’s top talent with technology to make the search and sell experience intelligent and seamless”. Compass combines data collection and analytics with the expertise to help sellers accurately price and market their homes to appropriate buyers
New York as the hub for the Real Estate Tech in the USA
Amongst all its big cities, New York City has emerged as a leader for real estate tech in the USA, let’s understand why. High concentrations of building stock, adventurous capital, and technology talent will soon make New York the global destination for real estate tech companies. New York City is notoriously known for its cutting-edge, heated and competitive real estate market, and it’s where the world heads for a career in real estate. This setting makes it a good fit for real estate tech to develop and makes New York City an important factor in real estate tech in the US or the PropTech movement.
The soaring skyline of New York City, its massive office market, and the thicket of buildings make it one of the world’s leading global commercial destination. New York City is the world’s best market for real estate, where total property value crossed the $1.0 TRILLION mark for the first time in 2017, according to the Department of Finance. The New York City Economic Development Corporation (NYCEDC) has made its intention clear of establishing NYC as a leading destination for tech development, only after Silicon Valley. This makes New York City a leading destination for real estate tech in the USA, as it provides a conducive environment for PropTech to flourish.
Way forward for Real Estate Tech in the USA
Real Estate Tech in the USA, especially with New York as a hub, is a very lucrative and growing sector. With increased interest as well as continued investment in this space, real estate tech in the USA is sure to grow, as well as lead the way for the world in terms of innovation and application. Due to the sheer size of its economy as well as high tech adoption rates due to education, USA is close to the UK as the leader for real estate tech in the world, completely changing the PropTech sector. One can also expect to see a more active role of Mergers and Acquisitions (M&A) in this country, as big companies and established startups will look to acquire high growth smaller startups in related fields.
In the years to come, there are some technologies that are touted to become more popular with real estate tech in the US and bring in more innovation. Some of these are:
Internet of Things (IoT)
The innovation in and adoption of Internet Of Things products in Real Estate Tech has truly taken everyone by surprise, and real estate will be no different. There has been an increase in investment and opportunities for every sector that IoT has worked in, and it brings the same prosperity for real estate tech in the US. PropTech can achieve true scale as well as innovation by integrating IoT, with smart homes and smart cities changing lives. More city officials and urban planners are moving ahead with projects to build “smart cities” — using technology to manage city assets, improve service efficiency, reduce costs and resource consumption, and improve quality of life.
According to a study by Hitwise that examines space and financial sharing activity, more than 143 million Americans visited space-sharing sites (sites that offer shared or rented spaces such as homes, rooms or offices that support travellers or people who need a temporary space) during the first three months of 2016. The report also found that visits to space-sharing sites have jumped 169 per cent since 2014. This shows America’s interest in the sharing economy and the power that this sector has to transform not just the real estate market but also real estate tech in the US, giving more opportunities for PropTech development.
One of the most promising sectors in Real state Tech is Croedfundig. It is the ideal way to move over from traditional high investments in properties and breaking it down for everyone to participate. In the US, one can expect more startups and developers to be interested in online investing and crowdfunding. As capital raising becomes more popular with the people, real estate can really take advantage of this situation. With online investing via crowdfunding, one doesn’t need to be uber rich and make large sums of investment, which also opens ups doors for small investors. Platforms like IndieGogo and KickStarter have already proved the success of crowdfunding with the American audience, and some platforms for real estate are cropping too, completely changing the face of real estate tech in the US or how PropTech works.
These fields and others like Blockchain, Peer to Peer Lending and Artificial Intelligence are sure to disrupt the real estate tech in US market further. The coming few years should be exciting as one can expect more innovations for PropTech or real estate tech in the US. More and more agents as well as developers are shaking off their fear of technology, and increasingly realizing that tech is making their work more efficient. This mindset change has been brought by the many PropTech startups in the USA, and it continues to contribute to the positive growth of real estate tech in the US.
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Want to know what makes a winning PropTech startup, check out these top 50 Real Estate Tech startups to watch out for in 2018
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