Why-ai-isnt-taking-over-nyc-real-estate-anytime-soon | The Harris Residential Team

I’ll Tell You Why.

I got this email From REVR, a company that ostensibly understands how to create value from your properties:

“At Revr.com, we monitor for sale properties around the United States to try and find good investment properties. We saw your listing at 855 W End Ave APT 8A and think it has potential as a good rental investment property. If you would like to see what sort of revenue the property could do as an Airbnb & as a long-term investment, just click the button below.”

Oh really?

yes, DALL-E created this image. Of course it did!

If you are properly monitoring properties around the US, you would know that a cooperative apartment on the Upper West Side of Manhattan has exactly ZERO potential as a good rental investment property.

No knock on REVR specifically, but any companies that are basing their work on algorithms and AI may have to tailor things just a bit differently for New York City.

AirBnB in New York City?

Nope. AI thinks that you can do AirBnB in New York City. I don’t know of any condo or co-op where you could get away with doing it, just like you couldn’t do a long-term rental for more than a year or so. Never mind NYC’s laws that make it hard to even do it legally.

Zestimates in NYC?

Meh. AI algorithms have been so far off valuing apartments that it’s almost laughable. Off by 20-50% on a regular basis. They don’t know the buildings. They don’t know what makes them special. They just aren’t single family houses in Springfield (whichever Springfield that is).

What About Commercial Real Estate Valuations?

Yes, Indeed. I’ve heard that companies are able to bid higher when smarter programs can see use more inputs and data to decide which buildings have more upside, and why. It’s remarkable what the right tech can accomplish with the right use case.

But Apartment Sales?

Given the granularity of information about coops and condos, right now residential real estate has resisted the capabilities of computers- It’s still garbage in, garbage out at this point.

I am excited to see where things go with Artificial Intelligence. But so far, the human element is not only helping real estate go the last mile. It’s still running the whole marathon.