Despite the Sitzer | Burnett verdict earlier this year — and the avalanche of copycat suits that followed in its wake — the rapid maturation of artificial intelligence will be remembered as the most talked-about news event of 2023.

In real estate, technology roared to life, sending a current of excitement across brokerages, multiple listing services and the third-party vendors who provide their services to the entire industry. But it was the rapid evolution of artificial intelligence, thanks to ChatGPT and other Silicon Valley stalwarts, that drove the narrative beyond real estate to sectors as disparate as manufacturing, banking, education and fashion.

Zillow, perhaps to the chagrin of some, continued to deftly maneuver its model into new business positions, making smart acquisitions and rolling out products for listing agents, while the rental space emerged as a bonafide target for innovators. Venture capital, on the other hand, watched mostly from the sidelines while multiple listing services made some surprisingly sharp moves, especially with regards to artificial intelligence.

Below, take a dive into the biggest proptech news of 2023.

(Not so) artificial intelligence

OpenAI rolled out ChatGPT in November 2022.

While artificial intelligence and machine learning had made its way into proptech years before, its consumer-level appeal created a stir. Before, it was relegated to chatbots and lead ranking, and some companies even tried to disguise it with typos and emojis, hoping users wouldn’t realize they were talking to personified code. Thankfully, that’s no longer the case, and that might be OpenAI’s most valuable initial benefit: the widely accepted use of AI.

Without the burden of skepticism, companies were given social permission to take down the guardrails and begin to teach it all kinds of things, like what’s in listing photos. had been working in computer vision for years before last November, and a number of proptechs had adopted its ability to extract actionable data from listing photos, information that can then be used to benchmark buyer trends, hasten the home search process, improve how agents market homes, sharpen the appraisal process, reduce underwriting periods and even identify street-specific buyer demand trends and make pricing models more accurate.

And so far, AI hasn’t replaced anyone. In fact, it can be argued, it’s making us better.

“It may replace the bottom performers in a certain field, but I think for most people, it’s supercharged productivity tools,” Mosaik founder and CEO Sheila Reddy told Inman. “What’s happened in the last year has aligned even more with that.”

Reddy’s company deploys AI to enhance how people search for and decide on a home by replacing hard filters with preference-based “wish lists” that know what home characteristics will move a buyer’s price needle. Traditional “filter-list” searches only deliver exactly what a person selected.

“I think where we go from here is more integration into day-to-day life,” Reddy added. “That comes from driving adoption and understanding, but also from its usability.”

AI’s “usability” will come with more context, according to Reddy. What she means by “context” is that an AI entity gets better as it learns specifics for each use case or system to which it’s applied, such as using a person’s previous home search activity to surface better matches instead of responding to a query with the same homes every time, which can measurably reduce and improve the number of options a buyer and their agent are provided.

Context also comes from the use of computer vision algorithms, which provide much more than appliance type or kitchen color. It can determine a person’s affinity for pine trees, second-floor decks and windows near breakfast tables. If a home new to the market doesn’t show those, AI-backed search can ensure the buyer and agent don’t waste time considering it.

Pritesh Damani, CTO of the Real Brokerage, said much the same in a Dec. 15 phone call with Inman.

“Contextual interaction is what’s next,” said Damani. And for Real, 2023 was all about collecting that context, something he alluded to in a June Inman Intel interview when he said that AI is “extremely useless without proprietary data.”

Real spent the year building out its internal AI solution designed to assist agents in day-to-day productivity, shrinking the completion time of tasks that would require a days-long email thread to mere moments.

Additionally, the brokerage applied the context of its agents’ activity to predict company churn. Real wanted to know why a team or agent was interested in switching brands and attempt to keep them aboard before they split.

Damani said its AI model got good enough to alert management to begin retention efforts before the person even realized their own activity would lead to them to depart.

We can predict our churn in advance with 70 percent accuracy,” Damani told Inman. “It’s almost proven at this point because we’ve back-tested it.”

Courted is a software company that assists brokerages in the recruiting and retention vertical, and in mid-2023 released its fully realized, comprehensive AI-supported application, Talent Solutions, an impressive evolution from its start as a mobile app for agent networking in 2021.

“However, this tool isn’t reading and parsing web-accessible data to use in its pitches; it’s processing information from a structured model proprietary to Courted,” an Inman review stated.

“Talent Solutions is about identifying the right agent and hitting them with the right message at the best possible time. It uses a great deal of personalization, derived from a massive pull of market data about agents in every competing brokerage.”

Courted also applies its use of AI to craft contextual marketing emails to agents and teams who may be on the fence about their broker. It also applies marketwide to uncover the best agents to build a new office or replace those destined to leave.

While AI made its case early in 2023 for helping agents with listing descriptions and disturbingly curated headshots, its most powerful use cases were being fleshed out behind the scenes to make the operation better from the inside out.

Real industry change will originate by focusing on the assembly line — not on the showroom. In fact, AI is getting so good at making software better that it’s bypassing the user interface altogether, a trend now in its early stages within proptech, and one the industry will no doubt be discussing often come midyear.

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Zillow’s super app steps out of the phone booth

This was the year Zillow made good on its “super app” promise, acquiring a number of technologies and quickly rolling out tools designed specifically for all agents, not merely its top-level advertisers.

Those still fighting against Zillow’s role in the industry will always find some fault in what it provides for consumers without ever seeing the countless benefits, even if its new array of services is aimed directly at helping agents in their marketing.

The company shook free of its iBuying side-hustle in Q4 2022, a little more than a month before it acquired VRX Studios. That deal resulted in new ways for listing agents to make what few homes they landed in 2023 stand out to an antsy buyer market.

Brad Inman warned detractors that Zillow has gone through changes before and that Zillow’s ability to recognize it needed to shift tactics is a strength.

“The mark of gifted entrepreneurs is their ability to cut products — not just build them,” Inman wrote. “This time, the strategy is to secure its position as the leading real estate listing service company and finish off its work digitizing the whole mess, as the rest of the industry begins to sputter.”

Industry technology analyst Mike DelPrete told Inman much the same in a January 2023 piece looking ahead at the year.

“When you look across the field, you have companies cutting, slashing expenses left and right to try to reach free cash flow or stay alive,” DelPrete said. “That’s not the case for Zillow. Zillow’s in a pretty good position where they can continue to invest in the core product [and] new products, and come out of this downturn eventually in a strong position.”

Well, here we are.

By March, Zillow led market share for real estate search portals between February 2022 and February 2023, gobbling up 44 percent of the market for real estate web traffic, according to the digital intelligence platform Similarweb. followed with 19 percent, while Redfin boasted the third highest at 15 percent.

The company spent the year fortifying its ShowingTime+ appendage, the highlight being Listing Showcase, a property marketing tool that deploys an array of technologies to highlight a listing and market its agent.

It also continued rolling out Listing Media Services, a market-specific service for scheduling and managing photographers and ancillary creative services. It then bolstered that growth by acquiring Aryeo, a creative content management system launched by a team of real estate photographers.

Oh yeah, it also acquired Follow Up Boss for $400 million this year, one of the most widely used CRM systems in real estate. This might be its most ambitious move yet in terms of proving what it wants to become. About the deal, CEO and FUB co-founder Dan Corkill said no company acquiring another would do so only to make it worse.

“Zillow is investing in the product and our team so that we can make it more valuable and even better for our clients,” he said.

All those years ago, Zillow proved that consumers didn’t want to rely on an agent to know what homes were available. And it’s never stopped taking flack for it.

Some cynicism about how Zillow uses the data its new applications collect is likely warranted, but it doesn’t take away from the fact that a lot of people ended 2022 hoping to find a Zillow bankruptcy notice in their stocking. Santa wasn’t listening.

Still, not all Grinches go away quietly.

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Homes(.com) still not selling

CoStar Group founder and CEO Andy Florance used the first half of his company’s third-quarter earnings call to assert’s ability to end Zillow’s decade-plus reign over the residential portal space, as the portal claimed a staggering 1,290 percent year-over-year rise in monthly unique visitors and continued to gain traction with its “your listing, your lead” promise.

Florance spent 2023 doing little to alter his reputation as a newsmaker, this time labeling his chief competitor as a “first generation portal,” suggesting their new approach to selling listing marketing services will backfire in the midst of the commission lawsuits.

“We could be seeing the biggest change to the residential real estate industry in recent or even intermediate history or long-term history,” he said in an Oct. 24 call with analysts. “The first-generation real estate portals leverage this threatened buyer-broker commission rule to divert listing leads from all the agents in the market to a small handful of agents who are then required to split their commissions with a portal. Many agents and brokers strongly resent that model.”

However, agents don’t drive traffic to portals, consumers do. And while all kinds of class action lawsuits are proving they care how much they pay to buy and sell, there’s little evidence to suggest the public cares how websites charge agents for leads.

Florance said CoStar will be pushing the pedal to the metal in the coming quarters, as leadership works on rolling out a membership by the end of Q2 2024. “CoStar Group has created dozens of successful monetization strategies and we believe that our planned monetization strategy for will become a dozen plus one of our successful monetization strategies.”

According to’s November 2023 report, traffic in the United States for home search remained Zillow’s to lose. was fourth behind Redfin and

Back in late October, Florance’s metrics drew skepticism from industry brethren after Google reports showed it reached the coveted No.2 position on the back of 100 million monthly unique visitors in September.’s competitors raised issues with CoStar’s reporting methods, traffic monitoring tools and other strategies to boost performance, such as an aggressive paid traffic strategy. “It’s difficult to understand the consistency of their calculations,” the spokesperson for one rival,, told Inman.

As Inman reported, uncovering the full truth on web traffic isn’t cut and dried, as type of visitor, referral sources, page destinations, user longevity and a host of other metrics all play a role.

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Turns out, renters do count

Given the level of home sales activity this year, it’s likely every portal saw an increase in the number of visitors poking around for rentals, a category of proptech that only continues to experience software innovators coming at it from multiple angles, as it did in 2022.

Many started the year believing that the single-family rental issue would blossom by summer, but it didn’t really materialize. That’s not to say SFR communities won’t continue to rob the market of inventory and eventually, homebuyers of equity, but for now, as explained by RoofStock CEO Gary Beasley at Inman Connect Las Vegas, “It’s better to take a long view when it comes to single-family rentals.”

A number of companies emerged this year to help renters build their credit history by providing their landlords with tools to report on-time payments to “the bureaus,” TransUnion, Equifax and Experian. It can be argued that credit scores aren’t really what’s preventing America’s lease-holding public from entering into ownership, but it’s absolutely a larger socio-economic concern that technology is now rightly addressing.

RentSpree continued its push into multiple listing services, joining Stellar MLS in Florida in November, to keep agents aware of the benefits of working with renters, a subset of real estate consumers that goes largely unnoticed when times are good. Well, hello 2023.

According to RentSpree, more than 60 percent of rental properties are absent from MLSs, which easily explains the lack of attention they’re given by active agents, despite how little work they’re finding in traditional home sales. The rent-tech’s efforts to change that stat should be commended by all stakeholders.

Revela, a property management software company, closed on $9 million in funding shortly after Thanksgiving, and a Zumper report that same week showed that rent is down in most of the country and that supply should expand during 2024, trends that should increase the opportunity for software to make leasing more efficient for renters and landlords.

RentRedi, although around for some time with a sizeable portfolio, made itself more known this year, earning four stars in an Inman review of its solution. It focuses on independent landlords — owner-operators — who make up the majority of rental property owners in America, according to

The company acquired a digital payment system to help landlords facilitate fast online payments from tenants, a crucial step toward meeting the modern renter where they’re comfortable conducting the most business: online.

Dropping rent checks through the slot isn’t anything anybody wants to do anymore, and implementing app-based payment flexibility demonstrates that more landlords are willing to invest in what their tenants want. It’s a small step, but it shows technology in the rental industry can help break down the us vs. them mentality that has plagued the tenant-landlord relationship.

Entrata emerged in 2023, too, offering institutional apartment landlords a fast, smart way to oversee portfolios and most notably, include a tenant services arm with its solution. Called “Homebody,” the services-based experience is designed to fortify renewal rates, increase on-time payments and, overall, advocate for tenants.

It sounds simple, but it has taken technological innovations to prove that a well-cared-for lessee is more apt to treat their landlord, and their property, like a home. And when the data backs it up, software companies only further prove their ROI.

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Nothing ventured

The Center for Real Estate Technology and Innovation reported what we all knew to be true, that venture capital was still holding out for something better in 2023. It hurts more when the numbers make it a reality.

The Center’s figures showed a total of $11.38 billion invested in proptech this year, a “42.38 percent dip from the $19.75 billion invested in 2022 and a significant 64.44 percent decrease from 2021’s investment high of $32.0 billion.”

If it makes the medicine go down any better, the retraction does make sense, as the real estate market’s post-pandemic boom was quite the anomaly, and now we can’t seem to let go of the prospect that those low mortgage rates will come back to rekindle it all.

The dip “reflects a broader market correction and a return to pre-pandemic investment levels,” the Center said.

If 2022 was “the hangover” for venture capitalists’ 2021 lavishness, then 2023 is the sober period that follows, the “I’m never drinking again” phase.

At Inman Connect Las Vegas, a group of money people wondered if their efforts caused a few of the issues today’s proptechs are facing.

“The business models we invested in over the last 10 years were solutions when we were at a 10-year bull cycle in real estate,” Paul Hurst, of First American, pointed out to the audience. Now is the time instead for very different solutions to address a starkly changed market, he noted.

Higher rates, which have significantly impacted affordability in tandem with tight supply in the market, have all affected how businesses react to the current market, Dan Wenhold of Fifth Wall said.

The year in funding had some bright spots back at its start.

TechCrunch reported that the start of 2023 was more active than many anticipated, stating that $8 billion in new capital commitments were made in the last week of January alone, a contrarian bit of activity given Bloomberg’s December 2022 report that VC activity is at a 20-year low.

Funds making news include two from New Enterprise Associates (NEA), totaling more than $6 billion and two from Cowboy Ventures’ totaling $260 million. FJ Labs announced two funds as well, also stockpiling $260 million, according to TechCrunch. Sapphire Sport raised a second fund of $181 million, Volition Capital’s fifth round finished with $675 million, while Kearny Jackson surfaced $14 million and Dimension, $350 million.

David Eisenberg, co-founder and managing partner of Zigg Capital, was mostly upbeat about 2023’s VC activity when he chatted with Clelia Peters of ERA Ventures early in the year.

“Venture capital has been a subsidy for the overall innovation that’s happening in residential transactions, and that subsidy is being pulled back,” he said. “Because that capital is more expensive, that capital is saying, ‘I want to see the ROI.’ That’s generally a healthy thing.”

And without much of a market on which to produce ROI, it’s safe to say that subsidy was held back another year.

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News and notes

A few additional happenings should be noted about the year.

Fast turnaround

Inside Real Estate managed to somehow create something out of its BoomTown acquisition in relatively little time: BoomTown Pro, “powered by kvCORE.”

The acquisition happened in January and by August, the new product was close to ready, meaning a great deal of coding and collaboration had to take place in a very compact calendar. The product brings together “the best of kvCORE and BoomTown.”

2nd homes for sale … again

Second home solution Pacaso weathered a number of challenges, and even managed to get its model made legal in multiple markets, like Park City and Miami, and launched its secondary market, re-sales of its fractional home shares.

The company reported to Inman that “homes in the Pacaso marketplace resale for an average gain of [slightly over] 10 percent.“ Sellers report not using their share enough as the reason they sell, but, according to Pacaso, ”three of four sellers would co-own again in the future.“

“In August 2023, Pacaso recorded its strongest month of the year so far, recording a 142 percent increase in funded shares compared to July 2023,” an email to Inman stated.

The client experience takes shape

ListedKit, Trackxi and Mosaik all launched in 2023 with the idea that the transaction can be better managed when the needs of the consumer are put first. Each in their own way, the applications center on reducing workflow redundancies, improving collaboration and thinking ahead on behalf of the agent.

The best proptechs of the next year are going to be those that begin with the consumer’s problems, not the agent’s. Find a solution needed by the buyer and seller, then give it to the agent.

MLS advances

A number of multiple listing services have embraced AI, the most common instance of which is partnerships made with and ListAssist, in each case using the respective company’s computer vision software to speed listing input.

This type of AI reads still images and extracts actionable information, helping input forms populate faster, automating descriptions and ensuring image compliance. In many instances, agents need only upload pictures of their new listing to have a considerable amount of the process completed for them.

This is a notable step forward because so many MLS experiences suffer from dated interfaces, inconsistent data fields and lack of contextual automation. Another long-term benefit is the greater adoption of AI as a necessary tool for improving the way agents and brokerages input and receive market data.

Happy New Year

It’s easy to predict that AI’s impact will continue to augment the coming year’s proptech advancements, if the cost of running the models doesn’t hamper consumer-level innovation. It’s possible we’ll also see the commission lawsuits place pressure on how proptechs serve the industry, from back-end accounting standards to revenue forecasting, home valuations and eventually, actual agent count.

What tools will brokerages need if a quarter of their desks are no longer needed? It’s all speculation at this point, but a risk not to be ignored.

Email Craig Rowe

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