Two things that are continually on the rise in Arizona, both literally and figuratively, are real estate and technology. As more and more commercial real estate deals and multi-family buildings are developed, and more tech companies come into Arizona to expand their operations, the state is viewed as a crossroads for innovation and business.
One way real estate and technology are coming together is through PropTech, a buzzy new piece of innovation in the real estate space. PropTech is a small part of a wider digital overhaul in the property industry, much like how Uber, Lyft and Bird Scooters changed the transportation sector; or how GrubHub and Uber Eats changed the way we order food.
PropTech is the innovative tech side of real estate, considering the technological and mentality change in the real estate industry and looking at the attitudes, movements and transactions of its consumers. It is an amalgam for all the companies that are taking on the real estate industry to make it a better user experience. It’s still a new trend, but one that fits in with the changing world of real estate that we’re experiencing here in Arizona. For instance, last fall, Arizona saw one of the country’s first homebuying transactions executed using blockchain technology. This significantly cut down on the overall transaction time in the homebuying process, helping to shave weeks off closing a sale to just a number of hours.
State Rep. Jeff Weninger is working on a PropTech sandbox bill that would allow PropTech platforms to come in and test their products, much like the well-received fintech sandbox that kicked off here in Arizona last year.
“If the legislature can pass that and it’s signed into law, I think you’ll see heightened activity in this space in 2019. It would accelerate that growth significantly,” said John Ragan, COO of the Arizona Chamber of Commerce & Industry.
It’s a concept that is not only changing how people buy houses or contractors develop new commercial spaces, but how cities are being planned for the future.
When you’re in the market for a new house or apartment, where do you go? Think of sites like Zillow and apartments.com that are dominating the market, bringing an algorithmic approach to house hunting. This is, in a nutshell, PropTech. And startups are pouncing on the way we look up new homes and use machine learning technology to better understand what we’re looking for in a new place to target consumers with ads and offers and listings that may be more attractive. This can all be seen in our own backyard.
“There are a number of big, well-known apps that have been in the market and started here in the Phoenix area—think of OfferPad, for example. It’s a PropTech platform, and it’s having a significant impact here in Arizona and beyond,” Ragan said. “You have a very tech-friendly governor and you’ve got tech-friendly legislative leaders, so I think you’re seeing policies and leadership that are encouraging tech to be developed here.”