What’s coming up next in 2023?
We’re starting to wind down here, but I want to make sure that I give you both the opportunity to talk about where you’re headed. 2023 is around the corner. What does that road map look like for you? What are you all thinking about in terms of what’s next? Lisa, I’ll start with you.
If I could just add a little bit to that last question that you had. Whenever we work with a partner, even if we do it in tandem with one of our MLS vendor partners, we still have open communication with that MLS customer. We open Slack channels. When those MLS do get a chance to experience how hands on we are, we’re very engineer and developer heavy.
We have a very talented team that loves what they do. We launched in Miami, for example, Bill Cole said, “I knew you said it was fast and accurate, but this is wicked. And your team responds immediately and that’s a modern tech company for you.”
We’re very responsive. We believe in creating win-wins. To Pierre’s point, if you do go to another platform or you add a new platform or a new product, we want to be a part of that solution. It’s very important that we have that ongoing repertoire and relationship with the MLS, in addition to the other partners involved with whatever platform we use.
As far as where we’re going… MLS is really getting out in front of their data. How are you going to leverage it? How are you going to generate revenue? We’ve always talked about this idea of like nonmember dues. This is really happening.
I encourage anybody on this call, reach out. Amy, I know that you’re doing some really great stuff with REdistribute and Pierre. We are more than happy to help you go down that path of distributing your data and what additional data we can put on it. Not only do we put the tags on it, we also have built our own proprietary property condition, property score model. That’s massive. Nobody has this. For us to deliver this to a MLS, to be able to go out there and add that to your dataset, is a huge win for you.
Please reach out to me or anybody on my team. We would be more than happy to set up a demo and show you what that looks like. And I think you’ll be pleasantly surprised on what the ROI and return is.
It’s exciting work that you guys are doing. Pierre, we did get a question from the audience and it looks like it’s targeted at you. Do you offer transportation cost, either financial or greenhouse gases, by transportation mode (car bike, transit, etc.) to further assist the different personal and societal impacts of the site?
In terms of what’s coming next, this question is right in that wheelhouse. We just launched our Wellness score, which is a new way to look at location where we’re understanding healthy food, activities, like gyms and fitness, parks, and the things that contribute to it too, especially post-COVID.
It became very apparent to everybody that your home was really much more than a home now. The area really mattered tremendously more than before, because if you were stuck in your house or you’re working from home, you now needed to get a quick access to things.
Taking a quick walk during a meeting became the thing that people did to stay in shape and to not be stuck in a house. So, if you lived in a neighborhood that wasn’t walkable and didn’t have a good stuff to walk through, you now really had a crappy walk.
On the CRE, high-level investor or even retail investor, this question points towards transportation costs or greenhouse gases. We are absolutely looking at the components that involve the environmental factors for an area. Everything from commute to transportation to the reduction of greenhouse gases. There are different technical things to talk about here, like scope one, scope two, scope three, emissions, and things like that. And there’s a lot of ways to slice that.
I think that as we go forward here, that’s we’re going to be focused on. So no, we don’t have the costs. We don’t have the costs today, but we may have something along the lines of of greenhouse gas emissions or things like that as we go towards the future. But what’s definitely in the near future is looking at quantifying location across the U.S. and Canada. We can now start to build predictive models as to where locations are going and how locations are changing. We can start to do things that bring more value to the space and are more indicative of if you want to find the deal.
If you’re trying to find a spot that maybe is on the upswing, that is changing, or that maybe more restaurants or transit are coming in. How do you spot those things as a consumer or as an investor, so that you can make those those decisions with that information too?
There’s a lot of opportunity here still for location. And we’re really looking at that. And I think understanding we’ve already done this work, but really pushing the envelope on quantifying the value of location. We know — everybody knows — that locations are everything in real estate. Location, location, location.
If you take an Upper East Side condo and put it into the countryside, the price is going to change. We all understand that intuitively. But what is it like? What is the number for the client, for the park, for the sidewalk, for the parking? What is the value, the financial model to that? We are really honing in on this and I think that will be a tremendous new thing that we’ll have to bring out to the space over the next few months.
Yeah, I think it’s super fascinating to watch kind of how that changes over time. I’m in an older neighborhood, but across the road from where all the growth is happening. And so something that was a farm yesterday is a new outdoor mall the next day. Som I think the kind of data you guys are bringing to help people understand exactly what you’re saying, sort of those emerging markets or new popularity and things like that. It’s super, super, super interesting.
Something else I can add to it is we’ve recently been asked to analyze a pretty substantial database where we can go in and identify how green is this property. This is really cool because when the current administration passed down a ruling that said if you reach a certain score, you’re going to get a half a point off your interest rate. That’s impactful, especially at this time that we’re seeing interest rates coming through.
This is how can our technology help us become better human beings and how we cab use this technology to measure the type of properties or neighborhoods that we want to move into. And then what are the benefits that we’re getting in addition to that. Whether you have a better neighborhood because it’s green, a better walk scorem or you got a discount on your interest rate because you bought a house that was more energy efficient.
These are all amazing ways that this data is helping to elevate proptech across the board. We were saying if Local Logic and Restb had a baby, it would be the perfect place to be in a neighborhood.
That’s true. Lisa, while I have you, we did get a question from the audience and it’s directed at you which is, “What is that property condition score?” Help us understand a little bit about that.
Our Chief Product Officer has really been heading this up where we’ve worked with Fannie Mae and Freddie Mac and we’ve used the traditional C1C6, Q1Q6 property condition score. I think I had a couple slides there, if you want to pull those up. We are able to go in and analyze a property and say based on these photos, “What is the condition that is coming in on the output? What is the quality of it? Is it despair? Is it poor? Is it average? Good, excellent?”
In addition to that, we’ve been able to combine both the quality and the condition score. We’ve built our own algorithm, which we call the R1R6. And we’re able to, for the first time, show an AVM valuation based on imagery. That’s never been done before.
It’s interesting because this speaks to whether it’s an appraisal. It prevents an inspector from having to go back again multiple times. It really also evaluates the condition of the property and what the true value should be.
You’re seeing a lot of the investors coming in with a sweet spot. So they’re able to say, “If the property is about a 2.8 to 3.2, that’s the lane where we want to get in and we want to be able to invest into this property. Whether we’re going to turn it into a short-term rental, a long-term rental, how are we going to put this in our portfolio?”
There are companies out here that are consuming this data from us and they are quietly mapping the entire country. They want to know what the condition and quality of every single property is in the U.S. This is so huge to be able to have to this.
In addition, it allows somebody to come in and look at a property — not only just on the image level, but on the property level. I think there might be another slide in there that will show that. We can even tell you if one or two of the rooms have been remodeled, but the other ones have it. So, we can look at it not only from an individual image level, but then we can also give you what the property score is on it too.
Pierre, I love what you guys are doing this, where you’re doing your ratings in the neighborhoods, and where does that fall on the rating spectrum. The same thing is happening with this on the property score. So, we really are in line with how we’re working together and understanding that this is the new norm. This is what the Reeds, the Blackstones of the world want. So anybody that works with AVM that’s on this call, please reach out to us. We would be more than happy to show how this would work with your personal AVM.
Anything too late to clarift? You all know that I could talk about data all day, but I know we’re coming close to our hour here. So, Pierre, I’ll give you one minute and Lisa, you one more minute to talk about what’s left to clarify that you want this audience to know more of.
We have a new UI coming out this year for the customer-facing side, which is really bringing this to the next level. We’re bringing heatmaps to the listing page, bringing a lot of information to the page, and most of all, bringing more context.
For example, let’s say that a home scores an 8 for walkability. The neighborhood is a 5 for walkability and the average for this whole city is a 7. So, therefore, this home sits in the most walkable spots in the city and in the neighborhood.
That’s the kind of thing that we’re bringing to the listing page in the next year and that’s part of our new UI. It’s going to continue to elevate the understanding of location and how people can interact with that.
We’re excited to talk to anybody, any ideas, anything, new stuff to do. We love working with our partners and are excited to enter 2023 with a whole new slew of folks on board.
That’s exciting. Good stuff. Lisa, how about you? Anything I forgot to ask?
You’ve done such a great job. This has been really cool. And like you, I can talk data forever. Obviously, everybody that’s on this call understands that we are entering into a reset. What data do you have now? How do you want to enhance it? How do you want to improve it? How can you better leverage it?
We’re here to work with you if you want to reach out to us just to come in and give you an overview of what we can do, look in your systems, and show you how we can elevate your systems or improve upon it and on the value. We would love to work with you and talk with you.
That’s awesome. I do hope people will reach out to you. I think you both have really fascinating and modern solutions here. And I want to thank you both again for inviting me. We do have one last question, “If there’s a poor home score, can this negatively impact sellers that have not updated their properties?”
The scores are not really good or bad. They’re the reality. If you put ten photos of a house that needs to be gutted, there’s ten photos of a house that needs to be gutted There’s nothing to hide here. And if a neighborhood is quiet, that’s not bad. If neighborhood is loud, that’s not bad either. It just is. And so either I want to live somewhere loud or I want to live somewhere quiet.
So, no, I don’t think there’s any negative impact by a poor score. Actually, for others, that might be the exact reason why the house is for sale and why they want to buy it. Agents always freak out when there is a score on a home. But I think there’s a difference between a score that’s making a decision for someone and a score that’s informing them of something that’s really there.
I think this era of consumer transparency sailed on. To your point, Pierre, you can look at a kitchen and see that the cabinets are 1980s. I happen to own some right now that are coming out. I love the idea of consumer transparency above all else too.
Just to add to that. The whole idea for us and entering into that specific product or vertical, it is to remove the bias. We want to remove the bias from any property. It doesn’t matter what zip code you’re in, what race, what religion.
We’ve been working with Fannie Mae and Freddie Mac. They’re actually going to even rename some of the the terms that they used. They’ve asked us to even come in. And it was actually a ruling that we have to remove religious objects from any photo in the sense that a property is a property. If it meets the needs, for whatever reason you’re buying that property, we want to be able to give that to you and remove any bias from it. We are creating better experiences and removing the bias from that. And that really is wholeheartedly our intention.
I cannot think of a better way to end it. I super appreciate both of you and wish you much success in 2023, if we don’t see each other before then. Thank you again for inviting me to to moderate this. I think it’s really good stuff.