Home Real Estate Moore’s Law and Real Estate: Speculations

Moore’s Law and Real Estate: Speculations

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A 1982 Osborne Executive next to a 2007 iPhone

I’m giving a presentation tomorrow at the Nextgen Realtor Group of the Houston Association of REALTORS. I do believe the actual title of my presentation, as in the program itself, is called Welcome to Dystopia. Somehow, it seems, I’ve become the Cassandra of the real estate industry. But in researching for the presentation, I ran across something that I wanted to think about more. And since writing blogposts is one of my primary ways to think about things… here it goes.

Moore’s Law states that the number of transistors one can fit on an integrated circuit board doubles every two years. (Originally, it was doubling every year, then every 18 months, and these days, the accepted ratio seems to be double every two years.) This principle is taken more or less as gospel within the computer hardware industry, and of course, the computer software industry designs its programs with Moore’s Law in mind. You write code that can barely function on today’s machines, and by the time you finish all the QA testing and roll it out, computers have gotten faster and more powerful.

So a ‘shorthand’ expression of Moore’s Law is that computing power doubles every two years.

Okay, you’re thinking… so what? We knew that. Duh!

Advancing Technology

Since I am speaking to NRG (which is basically HAR’s Young Professionals Network chapter), quite a few of the people attending will be heavily focused on and invested in technology. And I know that generally speaking, readers of this blog tend to lean towards the technophile segment of the industry.

The spoken and unspoken assumption about technology is that it has been, it is today, and it will forever be a huge boon to those real estate brokers and agents who master it. The website freed brokers and agents from having to pay tribute to newspapers. The cellphone freed them to conduct business even when driving to a listing appointment. Email, digital cameras, laptops, handheld video cameras, not to mention things like MLS on the web, advanced real estate search technology, public records data, mapping, easily accessible school information, and myriad of other enabling technologies have given the tech-savvy real estate agent a major competitive advantage in the marketplace.

So if you go hang out with a group of twentysomething and thirtysomething real estate agents, you’ll hear more talk about SEO, social media, Google rankings, and content strategies than you do about farming, networking breakfasts, mailers and open houses.

And thanks to Moore’s Law, the computer that today’s agent uses is eight times more powerful than the one she was using just six years ago.

So far so good, right?

But… check out this essay by a college professor worrying about the impact of high technology in his profession: teaching.

Computing power is driven by the well-established trend known as Moore’s law, an implication of which is that the amount of computing power you can buy per dollar approximately doubles every year. Let’s say you’re 40 years old and are wondering what kind of artificial intelligence programs you’ll be competing with in 20 years. When deciding this, take into account that 20 years from now computers will likely be around a million times more powerful than they are today. Over the long run you don’t want to go up against Moore’s law, yet I fear that this is my profession’s fate. [Emphasis mine]

It’s a bit dramatic (kinda like how I can be), but… there’s something there, no?

A Quick Detour into Gaming

I’ve been a gamer for most of my conscious life, starting with the Atari and gradually moving into PC gaming. In light of that essay, I went looking for some examples of how technology changed in just ten years. Take a look at these.

One of the top games of 2001 was Tom Clancy’s Ghost Recon. I remember it fondly. It was a spectacular game.

The trailer contains actual game footage, and in 2001, the realism was breathtaking. I distinctly remember having my heart beat faster in parts of that game, because I was so absorbed into the realism of virtual combat.

Well, here’s a game that’s being released in November of this year: Call of Duty, Modern Warfare 3.

Oh. My. God.

That game is less like a “videogame” than it is a playable movie. With live actors.

All of that advancement was achieved in ten short years. All of it happened not just within my lifetime, but within recent memory of my lifetime.

But some of the real advancement that’s happened within gaming, particularly first-person shooter action games like these, is not the eyepopping graphics, but the behavior of the computer enemies. The “AI” (for Artifical Intelligence) of the non-player characters in a game is hugely important. And it’s very difficult to do. Here’s a paper written in 2006 by one of the developers of F.E.A.R., a game with universally praised AI, describing how they went about it.

Which… bring us to Jeopardy.

About that Jeopardy-playing Computer…

Jeopardy? That game show with Alex Trebek?

Yep. Last year, IBM did a cute little thing: it built a computer designed to compete in the quiz show Jeopardy. Watson, the Jeopardy playing computer, competed in an actual game of Jeopardy, and beat the living daylights out of the human competitors: $18,400 to $12,000. And then, Watson crushed two former Jeopardy champions, including Ken Jennings — the winningest Jeopardy champion ever.

You probably saw it, thought it was cute, and that the rich nerds at IBM had a bunch of fun.

Turns out, IBM was trying to achieve something very specific:

When you’re looking for an answer to a question, where do you turn? If you’re like most people these days, you go to a computer, phone or mobile device, and type your question into a search engine. You’re rewarded with a list of links to websites where you might find your answer. If that doesn’t work, you revise your search terms until able to find the answer. We’ve come a long way since the time of phone calls and visits to the library to find answers.

But what if you could just ask your computer the question, and get an actual answer rather than a list of documents or websites? Question answering (QA) computing systems are being developed to understand simple questions posed in natural language, and provide the answers in textual form. You ask “What is the capital of Russia?” The computer answers “Moscow,” based on the information that has been loaded into it.

Or, in techno-speak, the purpose of Watson was “to create a new generation of technology that can find answers in unstructured data more effectively than standard search technology.”

Gee, I wonder what industry might be transformed by a computer that can deliver an actual answer rather than a list of documents or websites… or property listings?

I know, I know… you’re likely thinking (as I am) that there’s no way any computer can learn all of the intricacies and all of the quirky little details of a particular neighborhood, in a particular school district, with the particular features of the property in question, and so on. All of that is true. Today.

But then you add Moore’s Law into the equation, and realize that a mere ten years from now, Watson IV will be 3200% faster and more powerful. You look at video games from 2001 to the ones in 2011 and project that out ten years and find you can’t even imagine what you’d see then. Then you apply it to speech recognition, unstructured data analysis, and search technology.

What Might Real Estate Technology Look Like in Ten Years?

Thing about futurism is that any predictions past say two to three years are bound to be wrong. In 2001, not one of us could have predicted that our primary interface to the Internet (which even then we knew would be important) would be a little handheld computer with more power than our desktops of the day. We just happen to call it a “phone”. I don’t think anyone foresaw that we would return to the days of the mainframe computers with dumb terminals, except they would be called ‘The Cloud’ and ‘Apps’.

So with Moore’s Law in mind, maybe we could do sci-fi type of leaps of imagination about what real estate would look like in 2021. It’s really not that far off.

Could we have fully articulated Watson-like “Answer Machines” baked into every search-related App on our mobile computing platforms? Those little things could have 32 times the speed and power of today’s chips, have 2TB of high-speed RAM, and be connected 24/7/365 via 10 GB LTE 6G networks. Why not?

Perhaps “listing photos” would be replaced with full 2160p High-Def video-walkthrus that works exactly like one of these video games of today, allowing potential buyers (with appropriate security checks) to spend hours walking through the house at their own leisure, zooming into see every nook, cranny, and stain on the countertops.

Maybe each and every drywall has microsensors that, together with intelligent house software, would simply transmit a full and honest record of every repair job, every crack in the basement, the presence of mold, pollutants and whatever else… so as to make inspections a simple matter of downloading the Home Data Record.

It is impossible that computers that are 32 times more powerful might have correspondingly powerful software that generates not the guesswork AVM’s of today (the oft-maligned Zestimates) but automated pricing that is 99.9% accurate?

When we’re talking about exponential increases in computing power, it is nearly impossible to imagine what that future might look like.

So… What Does a Human Do?

The question then becomes, in a world where I could simply talk to my iPad 7 about looking for a new house and have it give me three actual houses that perfectly fit my needs, social life (which iPad 7 would know from having access to all of my social network data, my movement patterns, travel data, and spending habits), and financial ability… which houses I could tour at my leisure in full 3-D Ultra-High-Def as if I were playing a photorealistic video game… where the same Watson-like program can also take care of every single step of a real estate transaction (in concert with eClosing 3.1, a legal expert system specializing in handling every aspect of the transaction)…

Where does the real estate agent fit in?

If the home buying process can be entirely automated — which means that the home selling process can also be entirely automated by the seller directly — and the transaction itself is handled perfectly by expert systems with sophisticated AI and access to the global datasphere, requiring only the parties to sign off digitally… what is the need for a human agent?

Brokers and agents who make up the majority of today’s real estate professional are mostly in their 50’s. They won’t have to worry too much about technology. By then, they’ll be ready to retire.

But today’s YPN members, the twentysomethings and the thirtysomethings will confront a world like this, if not even more unimaginably delightful/terrifying. After all, today’s 28-year old newbie will be a 38-year old veteran in 2021… and still a member of YPN.

Whatever that role is, whatever it is that the human being will continue to do in the age of Watson and automation and AI… shouldn’t today’s young real estate people be thinking about those things and starting to practice those things?

I’m not trying to conjure up a dystopian future here; for all we know, such an advanced future could be a great time in which to be a ‘real estate agent’ (however that term is defined by then). But there are certainly elements of the possible future, considering Moore’s Law, that are not 100% positive to everyone. I think it is worth at least thinking about what about the industry, the profession, is uniquely human such that it could never be automated, never be mechanized, never be captured in algorithms no matter how sophisticated and complex.

Well, at least, that is, until we have to go back to work in the here and now… which I must do.

Great thinking through this with you all. I’d love to hear your thoughts/reactions, and what you envision the future of real estate technology to look like, given that our computing devices by then will be 32 times more powerful than they are today, and how that impacts your approach to the business today.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.