Embracing for Three Critical Changes in Real Estate Tech

The real estate tech sector is being shaped by shifting market conditions and changes in consumer behaviors.

For the past decade, real estate tech startups - technology companies that focus on commercial and residential real estate products and services - have moved quickly, forcing traditional real estate firms to rethink their core business models and embrace digital first innovations. But as the real estate tech sector begins showing signs of maturity, companies wondering how they will fit into this new era must understand the forces that are leading change.

While the industry will undoubtedly continue to expand as investor appetite remains tenacious and its customer base grows - changes are imminent. The very concept of what comprises real estate tech will shift. As the industry evolves, it will play a role well beyond real estate products and services, individual companies will vie to become undisputed leaders by size and breadth, and ecosystems will develop that have a tight grip on customer loyalty.

This new real estate tech era is being shaped by changes in market conditions, new regulations, and shifts in consumer demands and behaviors. As a result, the industry is becoming more cautious, even as it becomes more diverse across technologies and products.




RE:Tech research suggests three critical aspects of this new environment that must be understood to thrive in the shifting market.

1. Expanding Scope
The scope of products and services offered by real estate tech startups is expanding rapidly. Where once companies focused on marketplace platforms and CRMs,  the industry’s reach has extended into a dozen or so areas including mobile, big data, virtual reality, crowdfunding, lending, automation, and more.

2. Expanding Diversity
The real estate tech sector is also becoming more diversified, with a wide variety of business models seen across various asset classes, geographies, and technologies. A popular real estate tech business model has been a start-up addressing a specific customer need, such as housing or office space.  

Real estate tech leaders, such as VTS, were among the first to dramatically accelerate and improve the real estate management process - a model outside of other popular real estate tech business models.  Today VTS seems to be adjusting their business model to encompass a wider range of services, diversifying business categories within the greater real estate industry - including brokerage, management, and ownership services.

3. Expanding Consolidation
As the industry begins to show signs of maturity and a decrease in newly funded real estate tech startups - the real estate tech sector will likely enter a era of consolidation - with mid-sized and larger companies turning to mergers and acquisitions to expand their product offerings.