Real Estate Jobs: Which will be replaced by technology and which won't?

Subscribe

There's pretty much been a consensus agreement that a large number of jobs face a high likelihood of being replaced by robots and/or automated functions. For example, a large number of accounting functions across many industries will be automated. Additionally, more and more service jobs (taxis, food workers, etc) could/will be replaced by automated functions.

With that said, I'm curious to hear this forums opinions as to which jobs (within Real Estate) are safest from this automation takeover and which are most at risk.

Comments (49)

 
Sep 2, 2015 - 3:24am

Development; however, on demand side, how many people will be employed and paid well enough to afford? Maybe affordable housing development in this scenario

Have compassion as well as ambition and you’ll go far in life
 
Sep 4, 2015 - 11:16am

odog808:

Development; however, on demand side, how many people will be employed and paid well enough to afford? Maybe affordable housing development in this scenario


Thats stupid

Hopefully appraisers are automated. Title insurance people are basically useless, automate that. Alot of real estate deals shouldnt require attorneys (at least in my opinion)

 
Sep 7, 2015 - 6:11am

I am sort of a Luddite. I am afraid civilization is reaching its peak of how technology benefits the common person. Eventually, automation will destroy or render lower paying more jobs than it improves. For example Uber/Lyft is another way to saturate markets that had market inefficiencies that allowed for a sustainable career. Now it can be thought of as a gig. AirBnB skirts the rules. Real estate developer have to follow the rules. Whenever some force gets away with following the rules and directly competes, you are going to lose.

It's a great debate. One that I'm the minority with many of my friends (who care more about the lower price and convenience). I like lower prices but I see the consequences of lower prices prolonged and widespread.

I see this as a threat to capital. Yes therefore real estate is at risk. I worry about demand growth in areas that are not hotbeds of the creation of automation (ex not SF Bay Area where tech is created).

Have compassion as well as ambition and you’ll go far in life
 
Sep 7, 2015 - 11:00am

odog808:

I am sort of a Luddite. I am afraid civilization is reaching its peak of how technology benefits the common person. Eventually, automation will destroy or render lower paying more jobs than it improves. For example Uber/Lyft is another way to saturate markets that had market inefficiencies that allowed for a sustainable career. Now it can be thought of as a gig. AirBnB skirts the rules. Real estate developer have to follow the rules. Whenever some force gets away with following the rules and directly competes, you are going to lose.

It's a great debate. One that I'm the minority with many of my friends (who care more about the lower price and convenience). I like lower prices but I see the consequences of lower prices prolonged and widespread.

I see this as a threat to capital. Yes therefore real estate is at risk. I worry about demand growth in areas that are not hotbeds of the creation of automation (ex not SF Bay Area where tech is created).

Here's the thing with Uber/Lyft/Sidecar--they are easily beatable by the established taxi companies. Instead of bitching and complaining about unfair practices, the taxi companies should improve their services. It's not rocket science--provide an app that does largely the same thing as Uber, et al. I've seen the studies--professional taxi drivers tend to get people to point A to point B using the fastest route and their pricing is approximately on part with Uber and Lyft. What people are tired of is terrible customer service, excuses about why the taxi driver won't take credit cards, crappy cars, refusal to pick up in certain areas, etc., in addition to not having updated technology (like user-friendly apps). And maybe it wouldn't hurt the taxi companies to try to hire, ya know, Americans for once, too. I'm sick of being picked up by Yousef Islam who won't accept credit cards (because in his country tax evasion is the cultural norm) and whose English I can't understand.

I'm sorry, but I have no sympathy for the taxi companies. None. Improve the service and professional drivers will win the day.

Array
 
Sep 7, 2015 - 11:06am

odog808:

I am sort of a Luddite. I am afraid civilization is reaching its peak of how technology benefits the common person. Eventually, automation will destroy or render lower paying more jobs than it improves. For example Uber/Lyft is another way to saturate markets that had market inefficiencies that allowed for a sustainable career. Now it can be thought of as a gig. AirBnB skirts the rules. Real estate developer have to follow the rules. Whenever some force gets away with following the rules and directly competes, you are going to lose.

It's a great debate. One that I'm the minority with many of my friends (who care more about the lower price and convenience). I like lower prices but I see the consequences of lower prices prolonged and widespread.

I see this as a threat to capital. Yes therefore real estate is at risk. I worry about demand growth in areas that are not hotbeds of the creation of automation (ex not SF Bay Area where tech is created).

Since this is a real estate forum, I want to make clear that aspects of the sharing economy introduces a long term threat to real estate as an asset class and profession (wealth generation). The inherent tenets of real estate: location, property protection (which I include stability of cash flows given the "way things work"), tangible advantage are being threaten. This may seem like an over exaggeration, and watching a messed up industry like the taxi industry with it's many problems, may not seem a problem to you; but, the way it is happening (by not following the rules enmass, is a direct threat to our future livelihoods to some degree). The cheaper fare I pay today has future costs if this transgression spreads and spreads and you know damn well every tech company wants to Amazon itself.

I have the perspective of a real estate professional and someone who owns a family retail business (brick and mortar and ecommerce). I look at food trucks (illegally parked at lunch time) as vultures to restraurant tenants and landlords who invest in the neighborhood. Some say that's progress, it introduces choice and all these positives and I get that. But until it happens to you you might ignore the suffering and competitive disadvantage of changing the rules of the game (not by tech innovation, but almost like a mob shakedown); however real estate touches many industries and this will bite us in the ass sometime soon if not already, enough for us to seriously debate in your company's boardroom.

Have compassion as well as ambition and you’ll go far in life
 
Sep 7, 2015 - 5:59am

I think development is pretty safe. You asked which jobs are safest from automation. I said development. Sorry for being unclear and brief.

I see it this way, it's hard to find a MD or VP of development for a reputable company with less than 10 years of direct development experience. Maybe even 15 years or more. Typically 40+ years old. You see directors of development older than their counterparts in say capital markets or acquisitions. The reason is the huge build up of experience is needed in all facets of the investment cycle.

Furthermore, there are more unique risks in development. Automation occurs when processes have a high level of predictability and volume (to justify the upfront set up costs). Development is just the opposite typically. Unpredictable (but with risk adjusted returns-long tail returns, inefficient markets). And unique. This is why some of the greatest value add stages in development are off market land assemblage, entitlements, followed by derisking milestones related to site, legal and financial risks. For example solving for a deed restriction, long term tenant when you want to demo the building, etc.

I just don't see development being automated on Earth. As developable land become even more scarce, the human element (sociology, politics, feasibility, environmental) become more complicated and problem solving needed more than ever. Even China, with a centralized economy, when they approach city scale development, they do one level below automation and that's outsourcing expertise that would otherwise be a local project (see Gale International). Maybe in some far away future away from Earth when we are developing colonies on new planets with no NIMBYs and layers of government, automation of development would be possible. All design and construction will be of units mass produced by robots that fit together like advanced Lego systems. Greenfield development will take on a whole new meaning as we will need to alter the environment to allow life.

Have compassion as well as ambition and you’ll go far in life
 
Sep 3, 2015 - 2:00pm

I think brokerage is the most likely to get taken over by technology, with development and investment (PE, HF, direct investment, etc.) the least likely to ever get taken over by technology.

Eventually, someone will develop an effective platform at a cut rate price that will facilitate a huge portion of leasing and sales. I've seen a few of these platforms emerge, but they are outrageously expensive. JLL, for example, has an interesting new platform that is way more expensive than a regular broker. No idea why someone would pay for that.

Array
 
Sep 3, 2015 - 3:26pm

Agreed with you @Virginia Tech 4ever" . I can't imagine a role like development being automated because there are far too many human components that can not be duplicated by technology. I don't see how a piece of technology could negotiate a different zoning right within a city. However, I could see software coming on line (and I'm fairly certain I have seen it) that does a tremendous job of perfecting the project management aspect of development. Overall, development is not something that I could see being algorithmic (i.e. if X happens then Y) that could be the case with other aspects of Real Estate and certainly has occurred within finance (high-frequency trading).

Interesting that you mention the Brokerage. Would something like auction.com come into line with what you're describing in the second paragraph?

 
Sep 3, 2015 - 4:04pm

I was thinking that sites like CoStar could eventually be the platform, but right now there are laws that basically protect the real estate brokerage industry (i.e., unless you work directly for the owner as a salaried employee, you can't show property or negotiate a lease or a contract). These laws, in my view, are the only major barrier to an effective online platform. The technology is there already. It seems to me that culture and laws will have to change, but given an unlimited future time frame, it's impossible for me to see brokerage as surviving as a large industry. I think you'll always need brokerage professionals to help sell properties and to negotiate contracts, but I could see technology contracting the industry substantially down to a select few specialists.

Array
 
Sep 3, 2015 - 6:10pm

A large portion of the appraisal business could be automated. Seems like a machine could (i) pull sales comps and reconcile differences (ii) use marshal and swift for cost estimates and (iii) value an income stream

 
Sep 4, 2015 - 8:18am

I think brokerage will go. Look at Auction.com. That business model will dominate. I personally know six sellers that had properties out on the market. Their brokers were unable to compete with the prices that auction.com received. It is because there is market to create a bidding war against buyers. Every buyer has access, where with a broker you have to make sure you hit all 100% of potential interested buyers.

Array

 
Sep 4, 2015 - 6:14pm

I don't see CRE underwriters being replaced. That takes a ton of nuance. The coverage ratio isn't objectively, factually only, say, 1.30:1. Depending upon how you underwrite it, it could be 1.25:1 or 1.33:1. But there's a lot of stuff that goes into it. You get a property condition report and the lender has to determine what it wants fixed and what it doesn't need fixed--you can't program a computer to make those kinds of subjective decisions.

Of course, if we ever get humanoid artificial intelligence, theoretically, 100% of jobs could be replaced. But I'm talking about automating away. I just don't see that any time soon with credit underwriting.

Array
 
Jun 26, 2017 - 12:57pm

Yeah, see that's the problem if none of these platforms capture some serious market share you still need a broker. Example, if there are 10 websites for listings a broker would still need to post it out to all of these websites and solicit old people who can't work a computer via phone, that creates value in a broker. As soon as owners/buyers who grew up before the electronic age start saying "Send me an electronic OM instead of meeting me in person" or "Let's do this whole deal on CREXi" instead of a phone call and these websites start = pulling from some large source that is universal just in different formats will the broker be gone. Idk enough about leasing brokerage to speak on its automation.

 
Jun 17, 2017 - 1:56am

Amazon buying Whole Foods. Things will continue to change. Fewer humans getting paychecks.

Have compassion as well as ambition and you’ll go far in life
 
Jun 28, 2017 - 3:46pm

DetRustCohle:

This is probably a few decades down the road, but I can see blockchain technology one day making things like title examinations and title insurance obsolete.

I know very little about blockchain. Explain how it could work with title and insurance. Grac.

Array
 
Jun 28, 2017 - 4:56pm

I don't know exactly either, but here's something i found that goes deep into it (which I intend to also read): http://dci.mit.edu/assets/papers/spielman_thesis.pdf

Also, I imagine there's a way to implement blockchain/cryptocurrencies to transact real estate and enable people to own fractional ownership of RE assets.

 
Best Response
Jun 30, 2017 - 12:43pm

Basically, the blockchain creates an un-alterable ledger of transactions. If you transfer title via blockchain and it's impossible to transfer title or mortgage to a property without it being validated through all the nodes in the blockchain network, then anything that creates a title dispute like mortgage fraud, multiple transfers, etc.. become a thing of the past. If blockchain creates a system where title disputes are nonexistent, then I don't see how title examinations and title insurance can survive as they no longer provide anything of value. I believe some municipalities in Sweden area already beginning to use blockchain to transfer title.

 
Jun 30, 2017 - 1:26pm

I think it would depend to a large extent on the property type. For instance, multifamily has a pretty big subjective component to it when it comes to valuation. Price per unit in the market, vintage of the asset, level of exterior and interior improvements, all play big factors in value besides the capitalization of the NOI. Selling this to the market requires a lot of the "human touch." Credit tenant NNN properties on the other hand I could see being much more susceptible to automation given the fact they basically trade like bonds and very little if any consideration is given to the quality of the brick and mortar.

 
Jul 5, 2017 - 5:33pm

I agree. Add in the growing globalization of real estate and you're talking automating the real estate investment process only after the singularity, where AI can think just like a human (but better). So 50-100 years out on that. I do think once we reach the singularity there will be literally no jobs that can't be automated, at which point I don't know if humanity's future is utopian or dystopian. It's a frightening prospect.

Array
 
Apr 9, 2018 - 3:35pm

Re.Monkey:

Modular building/3D printing could disrupt real estate development but it's still a long ways away

Agreed. It won't eliminate human labor entirely, but it could definitely reduce it. But if you could work this on a mass scale, this is the type of thing that could bend the cost curve of housing, which is sorely needed.

Array
 
Apr 9, 2018 - 7:42pm

I actually think there's going to be an inversion / further separation of living vs. working areas. For example, if you have driverless cars, the concept of 'last mile' gets changed significantly. Now you can just have trucks/delivery service T'ed up around the clock as opposed to having someone on standby near the end user to ensure expedited drop-off. You'll be able to put all of the industrial / big box retail/even some office facilities out of the Urban/Infill core and be able to concentrate multifamily/retail/recreational centers together more effectively.

"Who am I? I'm the guy that does his job. You must be the other guy."
Start Discussion

Total Avg Compensation

September 2020 Investment Banking

  • Director/MD (17) $704
  • Vice President (45) $323
  • Associates (257) $228
  • 3rd+ Year Analyst (37) $203
  • 2nd Year Analyst (142) $153
  • Intern/Summer Associate (134) $141
  • 1st Year Analyst (566) $129
  • Intern/Summer Analyst (547) $82

Leaderboard See all

1
Jamoldo's picture
Jamoldo
98.3
2
LonLonMilk's picture
LonLonMilk
98.3
3
Secyh62's picture
Secyh62
98.2
4
CompBanker's picture
CompBanker
97.8
5
Edifice's picture
Edifice
97.6
6
redever's picture
redever
97.6
7
Addinator's picture
Addinator
97.6
8
frgna's picture
frgna
97.5
9
NuckFuts's picture
NuckFuts
97.5
10
bolo up's picture
bolo up
97.4