It feels like we’re regaining our equilibrium, and we’re looking forward to the possibilities 2025 can bring. We expect technology to play a significant and positive role in driving the industry. Technology will also help create smarter business processes and more informed people in supporting one of the biggest drivers of the U.S. GDP: housing.
So, what tech trends driving real estate should you watch in 2025? Here are a few.
2025 Data Will Fuel Innovation
You’re probably thinking I’m going to lead with AI, which still dominates most tech conversations. But I think the most significant impact on real estate in 2025 will be driven by the Internet of Things (IoT) and digital twins. Remember, AI is just algorithms—albeit very powerful algorithms—that are trained to do incredible things. The key is that they need lots of quality data to do those incredible things. And IoT devices are generating extraordinary amounts of data.
Think about the number of IoT devices in our homes—doorbells, security cameras, connected appliances, smartphones, voice assistants and more. What is happening with all the data these devices gather? And what can we do with this data? The opportunities lie in making sense of it by transforming this data into actionable insights and incorporating it into visual models to better understand how people use their homes and what people want in them.
Consider this example: Recent research indicates that the number of guest bedrooms in U.S. homes is at an all-time high, largely due to an increase in the number of bedrooms per home and fewer persons per household (think empty-nester baby boomers and millennials with fewer children). Imagine using AI to process IoT data to determine which home features are most desirable across different demographics. IoT data analysis can also tell us how rooms are used, how often, by whom and at what times of day. And it can predict future trends in housing design based on how homeowners interact with their spaces. This predictive power means designers and builders can create homes that not only reflect today’s needs but anticipate tomorrow’s demands. These insights can be invaluable to agents and brokers and could reshape the architecture and functionality of homes.
Digital Twins Will Tell Us More
For years, the industry has focused on showing properties via floor plans, photography, 3D dollhouse models and “virtual” walkthroughs. These tools have provided the best possible information for home buyers today. But with all the technology available to us, we should be thinking about tomorrow and beyond.
By combining IoT data with imagery, we can create dynamic digital twins (a virtual replica) of homes that visualize how people interact with their living spaces, making it possible to predict consumer needs and design homes for the future. For instance, IoT-enabled devices can provide real-time data on energy usage, which homeowners can use to adjust their consumption and reduce their costs. Digital twins can then simulate these interactions and give insights into making homes greener and more cost effective. AI can take these insights a step further, recommending specific changes or upgrades to enhance sustainability.
AI is the lynchpin to make sense of all of this data. With the transformative combination of data, advanced computational power and cutting-edge algorithms, AI can analyze data and uncover patterns and insights that were previously impossible to discern.
Homes trends evolve over decades. Separate rooms, for example, gave way to open floor plans. Victorians are out and modern farmhouses moved in. These evolutions were largely based on consumer preferences of the time. But today, we can use AI-enabled predictive analytics to understand what people will want and use it to guide the next generation of houses. Because these previous shifts lacked data-driven rationale, they sometimes exacerbated housing challenges. Digital twins developed with IoT data can offer ways to design homes that meet future demands more intelligently.
Modular construction and accessory dwelling units (ADUs) are examples of innovative housing solutions that could benefit from AI and IoT data integration. While these solutions address short-term housing demands, they can also be part of long-term housing development strategies to meet the needs of future generations, particularly when combined with AI data analytics.
Today’s Data Will Shape Tomorrow’s Homes
Given the growth and opportunity we’ve seen in just a few short years with AI transforming real estate, 2025 is the time to think bigger and imagine future homes that can use the vast amounts of data we are generating every day. The homes of tomorrow will be shaped by the data we collect, analyze and leverage today.
The intersection of IoT, digital twins and AI offers a vision for the future that is both innovative and practical. We can use these technologies to create homes that are not only more efficient and sustainable, but also more attuned to the evolving needs of their inhabitants. By understanding future needs and expectations in real estate, we can be better prepared to design, build, buy and sell homes for the future.
Author
Dan Weisman
Dan Weisman is a Director of Innovation Strategy within the Strategic Business, Innovation & Technology group at the National Association of REALTORS®.
References
Griffith, D.; “America’s Households Are Shrinking, Ushering in the ‘Golden Age’ of Guest Bedrooms,” Realtor.com, 18 December 2024
