The real estate industry is massive and is predicted to grow to $4,263.7 billion by 2025.
The reason for this is simply that people have always needed a place to live and always will. Since the world’s population is in constant growth, this demand shows no signs of slowing down. As technology has become more integral to society, the real estate industry, among others has changed significantly.
Many blockchain projects are entering the crypto space with the aim to resolve pain points found in a wide range of industries today and real estate is one of the areas where blockchain could have a real impact.
Big data is one of the big concepts of our time, and real estate is one area where it’s especially significant. Everyone from ordinary homeowners to large-scale insurance companies and lenders can all benefit greatly from access to reliable, accurate data. It can help them make smart, fact based decisions, avoid nasty surprises, making them informed about what they’re getting involved in.
Currently there are a few roadblocks to the big data marketplace. Reliable and accurate data isn’t easy to come by as it’s often scattered, inaccurate or not up to date. Buying and selling property is, for the average person, an expensive process with significant financial ramifications and uncertainty over the reliability of information can cause serious issues and inconveniences.
Something needs to change, and as data becomes more relevant every day the real estate industry needs a fresh way of organizing and sharing it so that it can benefit everyone. One of the ways to achieve this could include blockchain.
Let’s look at the current problems with data in the real estate industry.
An Unfair Landscape
Right now, data in real estate is often unreliable, conflicting, and inaccurate. It’s hoarded by sellers who don’t provide transparency of reassurance that their data is valid, which forces consumers to simply trust their word.
This creates a situation where reputation is everything for data providers. The big players are able to use their influence, protecting their reputation and maintaining a position of power, despite not always being reliable.
The result of that is that consumers of the data, from all areas, need to rely on data companies without a means to independently verify that their data is accurate. In order to make the real estate industry more transparent, this urgently needs to change.
A More Democratic Approach to Data
There are many possible ways to improve real estate industry practices.
One solution could be to build a data marketplace compiled on one platform with a single data verification process so that all data is processed the same way. This would eliminate contradicting data sources, and supply a more structured, reliable database, promoting consistent standards and leading to better quality data.
An example of the implementation of this idea is the database platform Agorafy which allows users to search for real estate and access a wealth of relevant data. This makes searching for a home easier, and makes finding the relevant information much easier as it is all in one accessible database.
Although implementing a centralized database can provide a solution to some issues, it introduces others. For one, the database is still a centralized model which can’t enforce on overall standard requirement from data owners uploading information as it would be complicated to enforce and nearly impossible to introduce to such an already over regulated industry. Moreover, consumers still have to trust the centralized database and its data providers on their word without a means of verifying the data for themselves.
Blockchain might offer a possible solution which is both democratic and decentralized, where data isn’t concentrated in the hands of just a few powerful bodies and can instead be shared freely between parties.
ReBloc, for example, is aiming to change the way data is used in real estate using blockchain technology. In their system, if a consumer wants to access data, the information is automatically pulled into a secure smart contract and compared with similar data from a range of other participants in the network using an indexing protocol.
This helps validate the data, ensuring it’s valid and worth buying. If it’s accurate, the smart contract system sends the data to the buyer and sends payment to the data provider. If it’s inaccurate, the contract is terminated and the unreliable provider suffers a penalty.
This discourages unscrupulous data providers from trying to sell data that’s unreliable or simply wrong. Blockchain allows data to be stored in an easily accessible way without the need for a central point of storage, only sharing transactional information.
It’s completely secure, and data shared between parties is kept between them so there’s no way for any third parties to access data without paying a data provider for it.
This is a solution which has the potential to change the entire industry, allowing consumers to purchase data from whomever they choose and making it more easily accessible. This and projects like it will open up opportunities for small business bringing both ease and accessibility to data providers and consumers in the market. Blockchain has the ability to merge the real estate industry with the fast changing digital landscape where there is an increased need for accessible and authentic data.