Transforming the Future of Real Estate: Insights from Reuters Momentum AI
I recently participated in a panel at Reuters Momentum AI with executives across industries to discuss where companies should focus their AI investments to drive innovation — because at this point, embracing AI is table stakes. As leaders, we need to keep an open dialogue about optimizing its potential while also mitigating potential risks.
I’ve worked in AI/ML research for more than two decades, having lived through a few “AI Winters,” the cycle is always the same:
- There is some true, novel innovation in AI;
- The AI hype train goes into overdrive;
- Well-meaning people try to create novel applications without knowing the sharp edges, which are intriguing but don’t quite fully work; and,
- When the next economic downcycle happens, the baby gets thrown out with the bath water.
We’re currently at step three. What does that mean? It means that if you don’t play your cards right, in the next step, your AI program gets defunded. When companies follow the hype train, they miss the shape of what AI can truly do (and what it can’t yet do) or deploy it in ways that don’t matter. Candidly, that doesn’t matter very much during the third step (while the hype train is still in overdrive) but, when we get to the fourth step, people over-pivot and cut the whole program.
Here are a few things we’re doing at Opendoor to stay ahead of the hype cycle and pioneer the future of real estate.
Finding a seat before the music stops
Step four of the hype cycle is like a game of musical chairs: we know the music will stop, but we don’t know when it’ll stop. And if you haven’t found a seat by then, you’re out of the game.
Here, the seat is whether AI has become a real, durable part of the business. For better or worse, businesses think in terms of profit and loss. If you haven’t truly improved the customer experience or the business in measurable ways in the profit and loss (P&L) statement, by the time the music stops — or the hype train dies out — you probably don’t have a seat.
In practice, what this means is that it’s better to score concrete, durable wins with AI today (and then try to generalize it later) than try to pitch a big, inspiring vision (and then try to notch wins against it later). There’s a far higher risk that you get caught by the asymmetric downside of step four if you wait too long.
Prioritizing the interplay of humans and machines
There’s a false narrative that AI will replace humans — in our experience, it’s really about the collaboration between models and humans. Humans have incredible intuition but are notoriously inconsistent. On the other hand, machines lack creativity but are built to be consistent. What happens when you combine the two? Better outcomes for the consumer, shareholders, and employees that drive top-line growth — meaning more revenue and cost savings.
For the past decade, we’ve built and refined a scalable system that pairs the best of human and machine intelligence. Our team of pricing associates, customer experience partners, contractors, and real estate agents have a deep intuition about market dynamics, what sellers need, and what buyers want. Our algorithms operate in trillion-dollar spaces and can do pricing calculations instantaneously for hundreds of comparable homes. We’ve turned these models into something understandable by humans, giving them something to react to. This feedback loop empowers models and humans to learn from each other.
As a result, we can deliver a completely new home sale experience, giving us the confidence to underwrite billions of the U.S. residential real estate market, buy and sell thousands of homes every year, and generate millions of offers.
Recognizing that productivity is not a panacea
It’s no secret that generative AI can drastically improve productivity — so much so, data shows it can increase employee throughput by 66%, equating to 47 years of natural productivity gains. But Opendoor’s work with AI in real estate has taught us that it’s more than a theoretical tool to boost employee productivity. We see it as a catalyst to solve problems that neither humans nor machines can solve alone, unlocking new kinds of jobs, enabling better customer experiences, and increasing business performance.
By evaluating dozens of AI technologies, exploring dozens of areas of application, and spending hundreds of hours, we developed a unique, long-range AI strategy for Opendoor. When you work backward from the P&L, we found that applying AI to improve the quality of decision-making can have five times higher ROI than focusing on productivity. Beyond the numbers, it gives us the ability to deliver a home sale experience that is even more efficient, consistent, and customer-friendly. It’s not only about cost-savings, it’s also about becoming better.
Future of Re(AI)l Estate
To weather this AI winter, companies need to understand the underlying technical and human dynamics, be flexible, and adapt to the changes happening around us. This is what we’re doing at Opendoor.
One of our board members likes to say that Opendoor has been doing “AI” since it’s been spelled “ML.” And he’s right — it’s not our first rodeo. AI is ingrained in our culture and will continue to be. We are a team of innovators with a mission to transform the real estate industry. We are building novel experiences for the home move. We are setting the standard for the future.
Interested in joining our team? Check out open roles here.
