The greatest journalist in real estate history is probably Brad Inman. He wields the proverbial pen like a master, blending conversations from sources with his experience and wit. This week, he took a swing at the future of AI in real estate. His analysis is impressive, but I think he missed one very important consideration.
In his article – Artificial Intelligence is the all in 1 tool real estate desperately needs, He wonders….”who will be the first major real estate company to announce a game-changing deal with OpenAI?” He picks Zillow, Homes.com and Realtor.com as likely candidates. He gives a head nod to Zillow because founders Rich Barton and Lloyd Frink once worked at Microsoft who is leading the way with OpenAI.
Most influential, in Brad’s eye, is the considerable data that Zillow has, and he notes that News Corp, the owner of Move, Inc that operates Realtor.com has already cut a deal with OpenAI for its news content. However, other than the recognition of the winning track record of Andy Florence, he missed the advantage that Homes.com has: Rentals, Commercial Listings, and Matterport.
For years, CoStar has been collecting data on Rentals and Commercial listings. They own all of that. Moreover, CoStar, the owners of Homes.com, have acquired Matterport. The AI advantage that this provides to CoStar is immutable. It all has to do with the terms of use for all of their sites and especially Matterport. When an agent buys a Matterport tour, Matterport retains all of the data to use as they wish in perpetuity. Agents are not “buying” the tour, they are merely renting it. Now, CoStar owns (or will own when the transaction closes), all of the data on all of the tours that have ever been made. Moreover, CoStar already owns all of the rental content submitted to their sites. Commercial too. The only thing they do not own is SFR content beyond Matterport.
As we learned last week, Microsoft Bing tried to launch a home portal using MLS data from Zillow and Redfin – possibly through their OpenAI program that both firms were enrolled in. That was a complete violation of broker and MLS copyright of that data. The site was quickly taken down. Neither Zillow or Redfin have the rights to share listing data with a third party like OpenAI. On the other hand, Matterport absolutely has the right to do whatever they want or imagine with the data, including selling it or sharing it with OpenAI or any other AI Service.
Where I think that Brad gets it right with Zillow is related to their acquisitions – DotLoop, ShowingTime, etc. Unfortunately, Zillow has acted like an acquire and wire shop. So far, they have not done anything to dovetail those products together into a seamless workflow experience. They can absolutely do better. Inside Real Estate already has, along with Compass.
Compass is probably leading the way at this point. As I wrote in September of 2023, Compass AI is really leveraging technology in ways that empower the real estate agent – what Inman calls the “third brain.” The focus at Compass is the real estate agent. They have developed AI functionality using the private licensed version of OpenAI to create a personal marketing assistant and an automated prospecting coordinator. Compass followed what WAV Group’s Kevin Hawkins refers to as the four Ps – personal, practical, powerful, and private. That makes sense. Inside Real Estate has made an impressive headway here too.
The sleeper companies in all of this are Corelogic and Homeowner.ai (formerly called Milestones), and in a smaller way – Inside Real Estate’s CoreHome. What Compass has done to use AI to empower the real estate agent can be done for homeowners. CoreLogic has the data, Homeowner.ai has the application. If you ever get a chance to visit their Dallas offices, you will be blown away by a tour of the CoreLogic innovation lab.
The old race was to get eyeballs and sell advertising and leads for home sales. The new race is to leverage AI to manage everything home. The transaction process is 45 days in the life of a property that happens every 13 years or so. That is a blink of the eye in the life of a home. The opportunity to develop the concept of homeowners under management is bigger than all of real estate combined. I really do not know who is going to win. Zillow does have the consumer’s attention, but they do not seem to be focused on homeownership services. I have adopted my home on Zillow – its lame.
