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Podcast Episode #266
Real Estate Investing News

Virtual Reality Getting “Real” for Real Estate

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Learn > Real Estate News > [REN #266] Virtual Reality Getting “Real” for Real Estate

Published: May 22nd, 2017

Builders are predicting that virtual reality will revolutionize the real estate industry. And for them, the impact could be huge. When the technology truly catches on, they will be able to sell homes before they are built, saving money on model homes, and getting their income stream flowing much sooner.

Consumers are dabbling in the technology now. You might hear about college students with a tight budget using this technology to virtually visit future housing options. Or home buyers who put on a pair of Goggles to virtually tour a home several states away.

It’s a great idea that has yet to blossom but real estate industry experts see it as a game changer. Builder Homesite CEO Tim Costello told the Washington Post: “Technology is changing rapidly. We think the use of virtual reality will reshape and transform how new homes are designed, marketed and sold.”


 

Virtual Reality Could Replace Model Homes

Some experts are predicting that virtual reality will replace the need for model homes — especially if there are several styles to choose from. Costello says there are a few early adopters so far. He says: “Maybe 1 percent of builders have actually deployed virtual reality, while many of the rest are still trying to decide how they should do it.”

Among those who “have” ventured into this new territory is the Pulte Group. The Post reports Pulte used VR to pre-sell about one third of the condos at a New York City development. And in Florida, it is using VR to pre-sell single-family homes before the models are built.

Betenbough Homes is the largest homebuilder in Texas and is reportedly a “pioneer” when it comes to virtual reality. VP of Betenbough Sales & Marketing Jeanna Roach says: “We have 42 house plans right now, and building a model for each one gets very expensive.” She says: “Each model home costs $350,000 or more to build, but we’ve found we can attract buyers with virtual reality and spend under $20,000.”


 

Virtual Reality is “Fun” for Home Buyers

She also says that virtual reality generates a lot of enthusiasm among home buyers. They can walk through a model home and with the addition of “augmented reality”, which is the overlay of other images, they can see what various options will look like. She says the technology appeals to their thirty-something market and that 50 people who took a virtual tour are now on a waiting list for homes.

She explains that a virtual reality tour is much more engaging than video. When a person takes a virtual reality tour, they control where they go and what they see. She says: “It’s much more fun.”


 

Consumer Warming up to Virtual Reality

The Post writes that consumers are warming up to the idea, but slowly. A recent survey by the New Home Source Insights Panel found that 75% of the people surveyed had heard of virtual reality, but it also found that just 14% had experienced it. So there’s a big gap between the informed and the experienced.

Despite the lack of experience, many of the people taking that survey said that using virtual reality would be helpful, especially if they were buying homes in other states, or from overseas. Some expressed concern that the virtual reality tour could be “doctored” while a few said the virtual reality experience was disorienting and made them dizzy or nauseous.

Costello pointed out in the Post article, that: “Shopping for a home is something that most people do with other people.” He says that: “Eventually it will be an immersive experience like it is now, but people will be able to experience it together instead of one at a time.”

The Post reports that virtual reality also helps developers fine tune their designs. For Pulte, every floor plan is analyzed by a consumer research focus group. In the past, that meant building 100 different floor plans in a giant warehouse for viewing by the focus groups. Now, the company is using virtual reality walk-throughs on iPads for feedback.

So it’s cost effective “and” easier to get feedback on a design. Costello says: “Testing models with virtual reality also allows you to walk through the floor plan at different times of the day.” He says: “Consumers can expect a better product, and builders can make tweaks to the design before they ever actually produce the product.”

He says the use of virtual reality will also go way beyond home sales. He expects that community planners will be using virtual reality, and that in another year or so, we will be able to see what a community will look like and how it will function as if it were a “video game”.

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Author

Kathy Fettke

Kathy Fettke

Kathy Fettke is the Co-Founder and Co-CEO of Real Wealth Network. She is passionate about researching and then sharing the most important information about real estate, market cycles and the economy. Author of the #1 best-seller, Retire Rich with Rentals, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR and CBS MarketWatch.

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