In proptech (property technology) circles, Nate Smoyer is a well-known name. <\/p>\n\n\n\n
Since 2018, he\u2019s hosted the proptech podcast \u201cTech Nest<\/a>,\u201d where he interviews industry leaders about the latest real estate innovations. He\u2019s also been the head of marketing at Avail (a landlord software company), Obie (a real estate investor insurance company), and most recently Roofer.com (an AI and drone-powered roofing company).<\/p>\n\n\n\n With a background in digital marketing, he created an advertising business to help proptech startups grow. <\/p><\/blockquote>\n\n\n\n I met with Smoyer to discuss how he got into proptech, his predictions for U.S. real estate in 2024, his advice for first-time investors, and more.<\/p>\n\n\n\n Smoyer\u2019s Winding Path to Proptech<\/strong><\/p>\n\n\n\n Smoyer\u2019s interest in real estate began when he bought his first home. At the time, \u201cNo one explained to me how the [homebuying] process was supposed to work,\u201d he said. \u201cI didn\u2019t even know you weren\u2019t supposed to call multiple agents. No one told me that.\u201d <\/p>\n\n\n\n He ended up buying a for-sale-by-owner (FSBO) property without an agent<\/a> in 2015. \u201cThat was the first time I was like, \u2018Man, this experience sucked. There’s got to be a better way to do real estate.\u2019\u201d From there, he also experimented with house hacking, where he recognized the need for better rental management<\/a> software. <\/p>\n\n\n\n By 2017, Smoyer became a real estate agent in Bellingham, Washington. \u201cI learned a lot about the need for tech, the experiences, and how everything was working,\u201d he said. <\/p>\n\n\n\n However, it wasn\u2019t until Smoyer and his wife moved to Nashville for her job, that he started getting serious about entering the proptech business. With a background in digital marketing, he created an advertising business to help proptech startups grow. <\/p>\n\n\n\n \u201cI recognized that early-stage [proptech companies] would need help in getting growth to justify their Series A and Series B [funding] rounds and that this would be one way to do that at an accelerated pace,\u201d Smoyer said. \u201cSo that\u2019s really how I got into proptech.\u201d<\/p>\n\n\n\n \u201cOne of the areas that has fully yet to be understood is weather patterns and storm damage and how you can underwrite storms and storm patterns<\/a> into property values as well as property risks,\u201d Smoyer said.<\/p><\/blockquote>\n\n\n\n Harnessing Artificial Intelligence for Property Valuations<\/strong><\/p>\n\n\n\n Smoyer believes the biggest way artificial intelligence (AI) can help real estate investors is in property valuations<\/a>. <\/p>\n\n\n\n For example, his current company, Roofer.com<\/a>, flies drones over roofs in predetermined flight patterns to capture aerial footage. It then runs the images through a proprietary AI model to detect and rate signs of curling, deterioration, cracks, and weather damage. <\/p>\n\n\n\n Other potential uses of AI in property valuations include predicting and measuring interior maintenance needs, neighborhood walkability, and weather patterns. <\/p>\n\n\n\n \u201cOne of the areas that has fully yet to be understood is weather patterns and storm damage and how you can underwrite storms and storm patterns<\/a> into property values as well as property risks,\u201d Smoyer said. \u201cThis is something that I think lenders and insurance companies have started doing already and will likely increase how much they do this, and the amount it’s going to affect investors will increase as well.\u201d <\/p>\n\n\n\n \u201cWe’re seeing this in markets like Texas, California, Louisiana, and Florida<\/a>\u2014areas that are prone to a lot of insurance claims.\u201d<\/p>\n\n\n\n Ultimately, the biggest challenge is still a lack of inventory. \u201cWe’re just behind on supply, and supply is not magically going to come online,\u201d Smoyer said. <\/p><\/blockquote>\n\n\n\n The U.S. Real Estate Market in 2024<\/strong><\/p>\n\n\n\n When asked about his outlook for the U.S. real estate market, Smoyer said he doesn\u2019t expect much change in the near future. <\/p>\n\n\n\n \u201cIn markets that had an aggressive appreciation in pricing, you may still see some corrections in those markets this year,\u201d Smoyer said. \u201c… I think markets that are a little bit more stable will remain stable. There’s just no reason to have sharp corrections.\u201d<\/p>\n\n\n\n Smoyer acknowledged that interest rates are likely to fall this year<\/a>. \u201cThat should be reflected in lower mortgage rates for residential homeowners,\u201d he said.<\/p>\n\n\n\n In terms of home sales, however, Smoyer said, \u201cI don’t think we break 5 million transactions in residential real estate. I think they’ll be up year-over-year, but it’ll be down from historical averages.\u201d<\/p>\n\n\n\n Ultimately, the biggest challenge is still a lack of inventory. \u201cWe’re just behind on supply, and supply is not magically going to come online,\u201d Smoyer said. \u201cI do not foresee any sort of major breakdown of real estate and homes. There would have to be an utterly catastrophic event that would force people to see liquidating their home as their only option.\u201d <\/p>\n\n\n\n Given that most homeowners are in stable financial positions<\/a> with fixed low-rate mortgages and plenty of equity in their homes, this seems unlikely to Smoyer.<\/p>\n\n\n\n \u201cI’ve got yesterday’s interest rate on yesterday’s price on a property that continues to increase in value and increase in rent and cash flow every year.\u201d<\/p><\/blockquote>\n\n\n\n How will the 2024 presidential election<\/a> impact the housing market? Smoyer\u2019s not sure. But he pointed out, \u201cThe fourth year of a president’s first term has historically 100% been an up year for the economy<\/a>,\u201d which means the economy (and the real estate market by extension) may benefit. Already last quarter, gross domestic product (GDP) surpassed expectations by reaching an annualized rate of 3.3%<\/a>. <\/p>\n\n\n\n At the same time, \u201cThe markets seemed to respond pretty favorably when Trump was last elected,\u201d Smoyer said. \u201cI have a hard time believing that it wouldn’t do the same thing again.\u201d<\/p>\n\n\n\n