JENNY MORANT HAS had a tough year. In Manhattan Beach, California, where she works as a real estate agent, it's been impossible to sell a house. What's driving the market right now? “We're down to divorces, maybe marriages, maybe babies, and job relocation,” Morant says.
Interest rates are largely to blame: After the Fed raised rates to 5.5% in July and then held them there, the mortgage rate soared. In October, the national average for a 30-year fixed mortgage was 7.86%. In California, it was more than 8.5%. Buyers who need a mortgage don't want to pay that kind of premium. Potential sellers are reluctant to put their houses on the market knowing that they might not be able to afford to buy a new place. Even all-cash buyers are constrained by the lack of inventory on the market.
Compass, Morant's brokerage and the most tech-forward real estate firm in the U.S. as well as the largest by sales volume, thinks it has the answer to these challenges: artificial intelligence. Its cofounder and CEO, Robert Reffkin, has long envisioned machine learning as a transformative tool for one of the most real-world businesses there is. “For years, we've had a focus on AI,”
