Resi Firms Bet On AI In First Quarter Earnings

Brokerages and residential platforms doubled down on artificial intelligence while reporting another tepid earnings season.

Advancements in generative AI, including the 2022 launch of OpenAI’s ChatGPT, set the real estate industry abuzz with speculation about the’s potential — including brokers tapping ChatGPT to write listing descriptions, startups designing products for developers and brokerages tapping AI for recruitment.

Now more companies are getting in on the action. Redfin, Christie’s International Real Estate Group and Homes.com are among the firms adding AI-powered products and partnerships to their tech portfolios, while high mortgage rates and few listings continue to hamper home sales.

Last quarter, Redfin announced the launch of its new AI-powered chatbot called Ask Redfin. The discount brokerage and listing platform — which lost $67 million — is leaning on the tech as it competes for traffic with companies like Homes.com, which outpaced Redfin’s numbers early last year.

“To engage that audience, we’re increasingly turning to artificial intelligence,” CEO Glenn Kelman said during the company’s first quarter earnings call. He added that the company’s use of artificial intelligence “has long been effective at bringing visitors back to Redfin.com.”

CoStar, the parent company of Homes.com, acquired another slice of the AI pie last quarter when it purchased 3D-imaging platform Matterport. Unlike its residential-only peers, CoStar finished the first quarter with a net income of $7 million, though its profits were down from the $87 million reported in the same period last year.

Ask Redfin — which the company piloted in March — answers users’ questions about listings, including local market conditions, nearby schools and touring availability, according to a press release. It connects users with a Redfin agent if the questions go beyond the scope of publicly available information about the listing.

The firm isn’t the first to integrate an AI chatbot into its platform. Douglas Elliman’s Eklund-Gomes team introduced their own virtual assistant named Maya last summer when the group rolled out their new website — the result of two years of development and a seven-figure investment.

Redfin initially tapped a few markets to roll out the tech, but the firm in April made the chatbot available on its iPhone application nationwide over claims that the tool sparked an uptick in users scheduling meetings with agents, Kelman said.

Kelman said the company plans to add the virtual assistant to its website and Android application later this year.

Ask Redfin’s launch followed that of another generative AI product, which the firm rolled out in the fourth quarter of 2023. The initiative — available in five markets — allows users to virtually redecorate rooms in for-sale homes.

Elsewhere among residential firms, Christie’s Real Estate is teaming up with Deepblocks, a real estate data analytics platform, to build lead generation and other products backed by artificial intelligence. The pair expects to debut their first products in the next couple of months, according to a press release.

“AI has definitely entered our lives,” Christie’s International Real Estate Group CEO Ilija Pavlovic said.

The firm’s foray into AI joins others such as Compass, which has for years positioned itself as a tech-first brokerage. Nearly half of the $2 billion the brokerage raised from investors went to developing its technology, and the firm has been using AI internally for two years, President of growth Rory Golod told The Real Deal in May 2023.

“While AI is generating a lot of attention now, it is not new to Compass,” another spokesperson for the firm said. “We are the only brokerage that has AI capabilities that are not outsourced.”