Airbnb, Predictive Analytics to Have Large Impact on Real Estate in 2022

Airbnb will leverage the biggest impact on the residential real estate market in 2022, according to Chris Linsell, senior real estate writer for TheClose.com. Linsell shared several technology predictions during a presentation at the 2021 REALTORS Conference & Expo.

"Airbnb are not just selling their product to consumers, they are selling to the providers of the product," Linsell said. "They are selling twice without holding their own inventory. This unique model opens up an incredible level of scalability.

"Industry analysts predict that Airbnb will increase their inventory by 25% in 2022," he added. "Many of those housing units are going to come from the residential real estate market."

Linsell explained that converting more inventory to short-term rentals will likely have a net-negative impact on housing availability and affordability, unless developers work to bring new options to the market specifically to meet these needs.

He told the audience that there are several things that Realtors® can do to prepare.

"You should become a zoning law expert in your local market, advocate for sensible zoning law changes at the local level, start adjusting your comparative market analyses to account for potential market value via short-term vacation rental income, seek out investor relationships with buyers and explore getting into property management."

Linsell also predicted that predictive analytics will be the dominant marketing strategy and the most important lead generation approach of 2022. Predictive analytics takes large data sets and uses them to make predictions about future behavior.

"As real estate professionals, we are all trying to figure out exactly who is going to buy and sell," he said. "These data sets are growing very quickly and predictive analytics algorithms are getting smarter."

Between 2016 and 2021 in the United States, there was a six-fold increase in the number of real estate leads, but the number of closings only increased marginally, indicating that Realtors® are capturing more leads, but they are less effective.

"Predictive analytics cuts through this noise," he said. "It allows us to focus only on the consumers who are most likely to conduct transactions. This becomes a very powerful marketing sword to wield."

Linsell warned that leads from predictive analytics marketing are often long-term nurture plays, making it difficult for Realtors® who need more immediate results to find success.

"Sometimes predictive analytics will look at someone's behavior and demographics and identify them as a person who is ready to buy or sell before that person even knows they are ready. They are going to get to that place eventually, but we have to be ready to nurture these leads for a little bit longer to get them across the finish line."

Linsell provides reviews of predictive analytics companies on TheClose.com. He recommends perfecting your strategies with predictive analytics while the stakes are still low.

"Don't go all in on this just yet. Make a nominal investment in it so you can understand its full value proposition. Perfect your marketing strategies and then you can ramp things up in the back half of 2022.