The Future Of Real Estate In A Digital World Part 2/2
Sitting in on a recent Zoom discussion on the Future Of Real Estate In A Digital World, Joe Hock Thor, GM PropertyGuru DataSense echoed some of the points made by the KW negotiators in a recent EdgeProp article, “Taking charge of the real estate industry with technology “ Joe said when he sold his own house in Australia, his canny real estate agent suggested putting cookie dough in the oven. Apparently house buyers are more likely to buy a property if they have an emotional connection IE cookie smells evoke warm feelings of home.
Joe thinks PropTech is not likely to displace the key role played by property agents in motivating buyers to sign SPAs. Property purchases tend to be Big Investments, involving complex legal and financing steps that might seem daunting to FTHBs (first time home buyers). So employing competent real estate agents that have the technical skills to navigate legal and financing steps in buying real estate plus the negotiation skills to close deals seems to be a good idea.
But Joe also pointed out in 2000, most people used travel agents to find out which airlines offered special deals. Now the advent of airlines like AirAsia with their web based booking and check in apps and travel apps like Agoda that can personalize search for cheap hotel rooms have largely supplanted human travel agents.
Another example from my own industry. Yours truly used to be a professional stock picker, IE an investment analyst. But nowadays, portfolio fund managers increasingly rely on computer algorithms powered by A.I. to identify profitable trading opportunities and to execute buy and sell transactions. There is a still a role for sales people in stockbroking. But the work of investment analysis IE identifying profitable trading opportunities is increasing being done by computer software programs that can work 24/7. Unlike humans, a software program doesn't ask for 12 months bonuses. 😜
Post Script - “If you can't beat them, join them ….”
In 2000 yours truly convinced his bosses that the future of the stockbroking industry in a digital world was online trading. I wrote a paper and got funding to set up an online brokerage with a multi million budget for hiring a team of content writers, IT programmers and a very smart MBA. My plan was to copy X ,a start up independent investment advisory firm headed by a former head Economist of a major stockbroking firm. X churned out their stock picks using a “black box” statistical model. No investment analyst required.
With what I remembered from my MBA Statistics 201 course, I figured out X probably employed a Box Jenkins ARIMA statistical forecasting model. So I bought an off the shelf Box Jenkins software model to customise it to run on my Bloomberg terminal. I was going one up on X because I was going to forecast all 33 stocks comprising the HS Index in “real time” with my Box Jenkins ARIMA statistical model using just historic price data.
Of course today's proprietary stock picking algorithms used by stockbroking houses like Goldman for program trading are streets ahead in complexity. They use machine learning techniques to recognise patterns in stock prices AND volume to identify profitable trading opportunities and super computers able to execute buy and sell orders within micro seconds.
