Top 7 Proptech Trends for 2021 and Beyond
Property technology is quickly disrupting the traditional real estate journey, including searching, buying, selling, renting and more.
The rapid growth of proptech startups has gained a lot of attention recently. But where are we headed next?
Here are the biggest proptech rends to monitor this year and beyond.
1. eSigning Technology Gains Traction
Fueled by the pandemic, eSigning for real estate agreements became a mainstream solution.
In fact, the global digital signature market is projected to grow on average at 26.3% annually from 2021 through 2027.
U.S. Google searches for "Digital Signatures" over time.
Two of the main reasons for this growth projection are flexibility and security that digital signatures provide.
But how will eSigning actually go mainstream?
One strategy is to build integrations with cloud-based applications such as Google Drive and Dropbox in order to streamline document exchanges into one place. In fact, this is already happening.
Searches for “HelloSign” over a 5-year span.
This provides Dropbox with entry into the market. And a cloud platform to provide security and simplicity to users.
The e-signature surge has also disrupted virtual notarization — a process that traditionally required in-person signatures.
Search interest in "Virtual Notarization" over time
Executive orders were put in place due to the pandemic that allowed virtual notarizations to occur.
DocuSign was able to enter the digital notary space after acquiring Austin, Texas startup LiveOak Technologies. Nearly 1.3 billion documents per year are notarized in the US, which shows the space has potential for significant growth in 2021 and beyond.
The average daily searches in "DocuSign" over time.
2. Increase In Virtual Home Tours
Rising interest in virtual tours is set to be one of the biggest proptech trends this year.
Searches for the term "Virtual Tour" over time.
Real estate agents all over the country have relied on virtual tours to show properties during the pandemic amid social distancing restrictions.
Just ask Zillow.
The real estate giant recently upgraded Zillow 3D, adding features that integrate machine learning into interactive floor plans.
Searches for the 3D home tour platform “Zillow 3D”.
This ML feature is designed to give prospective buyers a glimpse of the home’s layout. And allows prospective buyers to accurately design floor plans.
The Zillow 3D home dashboard.
Agents are benefiting too. Listings with 3D home tours were marked as “saved” listings 32% more often than those without this feature.
This is not a fad: 72% of agents say they will continue to offer virtual tours after the pandemic ends. Virtual home buying looks to be here to stay.
Matterport is another interesting proptech startup in the virtual tours space.
Matterport is building out spatial libraries with 3D imagery to give users an inside look at any property in the world. Matterport uses both mobile application software and 360 cameras to capture a property dimensionally.
Search interest in "Matterport" has risen nearly 7x since 2016.
Matterport saw a 500% increase in its user base in 2020 with over 10 billion square feet of spatial data in its library.
Earlier in 2020, they introduced 3D capture features on the iPhone. And they continue to roll out new offerings, like increasingly accurate data pulled from their larger spatial library.
The company empowers these features with an AI platform known as Cortex. This deep learning neural network is rebuilding 3D digital twins based on elements in the real world.
3. The Industry Taps Into Proprietary Advertising Solutions
New digital advertising platforms are emerging to disrupt the real estate space.
And provide custom solutions for this unique industry.
For example, Audience Town.
Audience Town secured $2.1 million in new funding to expand into new markets and continue to grow its platform. Real estate advertising is a $30 billion industry. And this funding accelerates Audience Town’s data and software capabilities for expansion.
Audience Town wants to make real estate advertising easier and more efficient.
Another solution real estate agents can utilize is Nextdoor, the neighborhood social networking app.
Google search growth for “Nextdoor”.
The app builds local communities where users can create meaningful interactions.
Local agents are using the platform for local listings to sell homes and themselves.
The platform provides an entry point for local agents to connect with local homeowners and buyers to build a presence in the area. These are dedicated communities and highly valuable marketing interactions.
The growth doesn’t appear to be slowing down with a future IPO on the horizon. Nextdoor reaches over 270,000 neighborhoods in 11 countries and continues to build a niche advertising market for hyper-localized campaigns.
4. Rental Property Management & Automation Takes Off
Automation is becoming a disruptor in real estate management.
Thanks to expanding platforms, multi-family property management can adapt to property owners’ needs in real-time.
The platforms provide the tools and support needed to fill the technology gaps and reinforce efficiency and profits.
Knock CRM is looking to take charge of the space after raising $20 million.
Search growth for “Knock CRM” since 2017.
Their platform automates a lot of the grunt work in property management. Specifically, Knock CRM provides property managers with flexibility to manage larger partner portfolios.
Knock CRM provides a 20% increase in lead-to-lease rates when new users switch over.
The property management market is expected to reach nearly $24 billion by 2026, with accelerating growth caused by the coronavirus pandemic.
ManageCasa is another leading automated property management software.
They recently partnered with Stripe to launch a new payments platform for property managers and landlords to automate rent payments, property expenses, and bookkeeping solutions.
The ManageCasa homepage.
The platform is an all-in-one solution to control multiple property management processes in one place.
There are over 2,000 property managers currently using ManageCasa.
5. Fractional Real Estate Investment
With the Reddit group WallStreetBets becoming a household name in the financial world, the world of retail investing has seen a dramatic increase.
This trend goes beyond just the stock and crypto markets. Investors are eager to get involved in real estate investing too.
Due to the significant amount of capital required to get started buying properties, proptech companies have started to focus on fractional and crowdfunding property investment opportunities.
Google searches for "Fractional Investing" are up over 8,900% in the last 5 years.
The global crowdfunding real estate market is expected to grow from $13 billion in 2018 to nearly $870 billion in 2027, a 58% compound annual growth rate.
Republic is an investment startup that began by allowing investors access to early stage startups.
Interest in "Republic.co" has risen by 2,500% over the past 5 years.
This past year, they made the jump into real estate after acquiring real estate investing platform Compound.
Other players in the real estate fractional investing space include:
All three of these competitors offer low barriers to entry with minimum investments between $500 to $5,000.
The benefits of a user-friendly UI, curated real estate deals, and easier access make these platforms an attractive solution to start building real estate portfolios.
6. Smart Homes Becomes the Norm
Transforming real estate properties into smart homes is a new way to increase property values and attract a new generation of home buyers.
In fact, a recent study showed that 62% of “Gen-Z” renters consider smart-home tech more important than amenities such as a gym and convenient parking.
Search interest in "Smart Homes" over 5 years.
Ecobee is a smart home automation company building thermostats, cameras, and sensors to install in homes to secure and automate properties.
Searches for "Ecobee" have tripled over the past 5 years.
They also offer business solutions known as SmartBuildings for property owners to manage thermostats for both commercial and multi-family buildings.
The household penetration of smart home devices is set to hit 40% in 2021. And is estimated to grow to over 57% by 2025. Competitors like SmartRent are finding ways to automate installation and management processes as well.
Searches for smart homes startup "SmartRent" have risen 1,300% since 2016.
Some key offerings from SmartRent include smart apartments, parking management, community wifi, and security control automation. In 2020, SmartRent raised $60 million to expand its reach.
This startup wants to provide an automated installation process and a fully managed service-based approach for multi-family property owners.
7. Growing Numbers of “iBuyers”
iBuyers are creating fast-paced real estate sales and automated valuation models to sell homes quickly.
Searches for the term "iBuyer" since 2016.
iBuyers rely heavily on data and will often buy homes unseen.
The growing popularity of iBuyers has caught the attention of homeowners. 71% of sellers have stated they would consider using iBuyers to sell their home.
During the pandemic, iBuyers saw a significant decline in purchasing. But as vaccines and reopenings have occurred so have the iBuyers.
The pandemic also helped demonstrate some of the benefits of iBuying (reducing in-person visits and interactions).
The CEO of Knock CRM believes half of all home sales will be bought by iBuyers within the next 10 years. The belief is that quick sales provide certainty and convenience that traditional real estate sales don’t typically offer.
Despite this projection, iBuying only currently holds about 1% of the total residential real estate market.
Opendoor is an iBuyer proptech startup quickly gaining market share and popularity.
Search growth in iBuying startup "Opendoor" over time.
In September, Chamath Palihapitiya took the company public through a SPAC IPO. But how does it work?
Opendoor charges a 5-6% service fee to buy your home (by comparison, add-on fees sellers face through a realtor can range somewhere between 6-10%).
Other players competing with Opendoor include:
- RedFin, a real estate brokerage company that generates instant offers.
- Knock allows users to buy their new home before selling their old home.
- Zillow, a leading online real estate marketplace with many tools at its disposal.
2021 expects to be a high growth year for many iBuying startups.
That will just about wrap it up: 7 important proptech trends to watch for in 2021 and beyond.
From eSigning to iBuyers and more, these trends are positioned to disrupt the real estate industry as we once knew it. And if 2020 taught us anything, it’s to believe that software and technology can disrupt just about any space.