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June 2017   Volume 43, Number 6      
 

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Virtual Reality Shakes Up Real Estate

Virtual reality (VR) is expected to shake up the real estate industry in the same way that internet real estate listings did. In fact, it might not be long before buyers can view their next house or apartment using a VR headset.

Now is the time, many analysts are saying. The technology has become significantly cheaper and easier to use. In addition, buyers and agents alike aren’t as afraid of technology as they used to be and real estate markets have become more global than ever.

“It is a foregone conclusion that we’ll be evaluating real estate this way in the future,” said Gene Munster, a Twin Cities tech analyst and investor. He anticipates that VR will become the most significant development in real estate since the advent of the internet.

Already many real estate agents are giving “virtual tours” without goggles and using aerial drone tours to sell new development. These technologies allow homebuyers to shop more easily and narrow down their options without ever having to set up physical showings. Agents are also hiring companies that use sophisticated software to create 360-degree room views by piecing together still photos.

Triggering an Emotional Response

Although these “virtual tours” are not actually three-dimensional, they allow buyers to look at every interior surface.

Moreover, it’s a tool that has the power to create an emotional response that a single, static view of a room simply won’t, putting buyers into spaces that could be hundreds of miles away.

Cathy Lawton, a Milwaukee homeowner, says that viewing a virtual tour of a 13-acre property near where her grandmother used to live in Minnesota was enough to convince her to make the seven hour drive to view it. When she arrived at the home, she says that it lived up to the impression provided by the virtual 360-degree tour, allowing her to quickly make an offer.

In addition to appealing to the emotions of sentimental shoppers and stimulating interest, 360-degree tours also make it difficult for sellers to hide features of the home that they’d rather buyers not see.

The new VR technology makes use of the kind of technology that gamers have been using for years by pairing headsets and goggles with a smartphone or computer. Clients can view computer-generated imagery and environments, giving them a feeling of being in the room, not just observing from a distance or from a single perspective or angle.

VR Options Expand

The major difference today is accessibility, which reached a turning point in March 2014 when Facebook bought Oculus, a leading VR headset company. This $2.3 billion investment has helped the entire VR industry to mature.

VR viewing devices are now available in a variety of models and price points, ranging from cardboard goggles that cost only a few dollars to sophisticated headsets with hand controllers costing hundreds. At the same time, the software that helps to transform images into three-dimensional environments has also become more sophisticated and accessible.

Several years ago, Silicon Valley company Matterport introduced special cameras that were designed to create virtual tours for real estate. Realvision, a company based in Minneapolis and Toronto, developed software that works with standard digital single-lens reflex cameras, including Oculus Rift, Google Cardboard, and Samsung Gear VR.

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In this issue:

Virtual Reality Shakes Up Real Estate

All-cash Chinese Buyers Disappearing From U.S. Real Estate Markets

Consumer Confidence Falls after Record High

Immigrant Households Impact Success of Real Estate Market

Multifamily Construction Loans Are Getting Harder for Developers to Find

Survey NAR Survey Finds Increase in Consumer Confidence in the Midwest and Rural Areas

Purchases of Vacation Homes Declined for Second Straight Year in 2016

Rising Home Prices Drive Up Homeowner Debt

The 10 States Investing the Most in Commercial Real Estate

How Sellers Can Avoid the Downsides of Hot Real Estate Markets

 


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