By Kevin Hawkins with Korey Hawkins | Vol. 1 Post 15
Real AI is a 100% human-created weekly roundup of all things AI in real estate and emerging AI innovations in other sectors likely to impact real estate, posting a new edition every Friday.
Fannie Mae embraces computer vision
Craig Rowe at Inman News did a solid job with his recent piece on Fannie Mae embracing AI and computer vision or CV. It’s important because when Fannie Mae makes a move, the mortgage industry follows.
In June, Fannie Mae announced the use of “image recognition” to detect incorrect quality and condition ratings. Fannie Mae and Freddie Mac require appraisal reports to include interior and exterior photos for funded properties. However, the GSEs only require one exterior front photo for each comparable.
Fannie’s turned to computer vision for condition validation. It’s a big swing but one Fannie backs up with research and data to justify. Having worked at Fannie Mae as the Director of its Seattle Affordable Housing Partnership Office in the 1990s, I know first-hand that Fannie doesn’t make any major move without dissecting it from every angle.
In fact, Fannie analyzed more than a million appraisals using image recognition technology to compare appraisal reports to interior photos of comparables to determine condition ratings. What Fannie discovered was that computer vision technology was able to identify appraisal defects with 98% accuracy.
More importantly, the discovered CV found “many defects that were previously impossible” for it to detect. That translates into incorrect condition ratings leading to missing or faulty adjustments to comparable sales, resulting in unsupported, inaccurate appraisals.
With the GSE moves, mortgage lenders and appraisal firms are looking to CV for GSE compliance. Real estate’s computer vision leader, Restb.ai, is already offering mortgage originators and appraisal management companies (AMCs) a GSE-compliant image validation solution with its computer vision technology. Talk about being in the right place at the right time!
Finally, what most people don’t realize is Fannie Mae is a technology company. It has been for the last couple of decades. The majority of its ~8,000 employees work in its technology group. As it moves to solidify AI in real estate, the industry will follow.
This is just the beginning.
Claude.ai is getting better – much better
When we first used Claude.ai, it quickly became our No. 2 choice. But it was a distant second to ChatGPT-4. It has closed that gap.
We’ll dive deeper into Claude vs. ChatGPT in a future issue, but there are some things that Claude does better than ChatGPT and vice-versa. One example, for now at least: Claude can consume a much larger word count of content and is wickedly good at summarizing that content.
The betterment of Claude is so striking we signed up for the Pro version – the same price as ChatGPT at $20 a month plus tax.
We can see why Google recently invested $2 billion more in this AI tech!
AI Five Fast Facts
- The market size of Artificial Intelligence is projected to increase at a compound annual growth rate (CAGR) of 37.3% between 2023 to 2030.
- About 97 million individuals will be working in the AI space by 2025.
- AI is considered a top priority in business plans by 85% of companies.
- Globally, 38% of consumers prefer to utilize chatbots.
- 47% of Enterprises have established AI strategies for smartphones.
Source: What’s the big data
AI Headlines Take 5
1. Has Great Potential! Meet Your A.I. Realtor | The New Yorker 11/27/23
The Maya Chatbot uses real estate data to answer home buying questions.
2. Generative AI can change real estate, but the industry must change to reap the benefits | McKinsey & Company 11/14/23
A fantastic deep dive into how multiple real estate sectors can benefit from AI.
3. PropTech Today – Balancing AI innovation with the human touch | EstateAgentToday 11/29/23
Remember “high-tech, high touch?” Rinse and repeat.
4. AI brings transparency to farmland values | Successful Farming 11/27/23
An ag real estate agent in Iowa uses AI to improve farmland valuations.
5. How AI can address the skills gap in CRE | Altus Group 11/29/23
Commercial real estate is looking for new ways to leverage AI.
Quote of the week