00:00When we talk about the real estate space, and more importantly, kind of like how you sort of look at
00:04what tools can be used to better assess what's going out there, whether you're buying or selling, obviously everyone's talking
00:09about AI.
00:10Is that a real function of what you're doing right now with your business?
00:14It has. There's been dabbles at it, like chat box connected to real estate portals, but we just released a
00:22completely native, deeply integrated AI solution called Homes AI.
00:27And it is what the wow factor you get the first time you get amazing answers from a Claude or
00:34a ChatGPT, you're now getting in a real estate environment.
00:36So it's a vertical application specific to real estate with high quality imagery and real estate content laid over a
00:46whole series of LLMs.
00:48And so you end up conversing about real estate neighborhoods, schools, houses, doing virtual tours through properties, and it's definitely
00:56a next-level experience.
00:58Where is most of your revenue coming from in terms of the source? Is that coming from the developers, the
01:04real estate agents, the customers?
01:07We did about $900 million a quarter, and it's coming from commercial real estate brokers, owners who want to get
01:14super high-end information.
01:16Some people call us the Bloomberg of real estate.
01:19That's a lofty title there.
01:20And that's a very lofty thing that we try to achieve.
01:23So we have a lot of people subscribing to our information platforms.
01:26We do a lot of risk analytics for banks as a service.
01:29We provide hotel benchmarking, so the hotels around the world use us to understand rates, profitability, that sort of thing.
01:37So we have a lot of information business, and then we have billions on the marketing side.
01:41So apartment owners, real estate agents, commercial owners pay us to market their properties on the Internet.
01:50And when you look at the ability to utilize AI, are you targeting younger generation, people who are typically going
01:57to, I don't know, Zillow or Homes.com to just see what could be for sale if they were able
02:01to make a purchase?
02:01Or how are you able to maximize that?
02:03I do believe there's faster adoption in the sub-30 set.
02:08And in particular, we're building these really nice virtual reality tools where you can fly around the exterior of the
02:14house, the neighborhood, you can move through the house, and you can real-time ask questions as you're flying around
02:21about the property.
02:22That is going to be adopted a little quicker by folks under 35.
02:28But it really works across the board.
02:31It's amazing.
02:31What we see is in the AI version of Homes, we get four times the usage if a person goes
02:39into the AI mode than if they're in that non-AI mode.
02:42And they actually submit seven times as many leads to real estate agents if they're using the AI mode.
02:50And it's just because you are going way beyond just setting a filter and browsing listings.
02:57You're actually having an interactive conversation with the site and refining your search and asking questions about what kind of
03:04marble is that in the kitchen counter?
03:06Can I fit a California king bed in here?
03:09You ask questions you can't believe you can ask of a real estate portal.
03:12Well, is the goal then to, in the long term, replace the buying agent?
03:16I'm just thinking if I can go to the website and get all the answers I want about the school
03:19district or what zoning is like, then I don't maybe need to go to my local retail.
03:24Well, the real goal, our client in this, is the listing agent.
03:31And listing agents sometimes are listing agents, sometimes they're buying agents.
03:35There's not a separate buying and listing agent.
03:37It's one person.
03:38So what we're focusing on is providing value to the selling agent and the homeowner to bring additional buyers into
03:44the property.
03:46If I have one person show up to buy the property, it's a buyer's market.
03:50If I get three people to show up, it's a seller's market.
03:53Well, I wanted to talk about what is the market right now.
03:55We've been talking about elevated mortgage rates.
03:57There was a headline today.
03:57We're back below the average mortgage rate, below 6% for like the first time since 2022.
04:02Are you anticipating that we're going to start to see more activity this spring selling season relative to the last
04:07two, three years?
04:08Well, we definitely have.
04:10And I'm talking in the residential space.
04:11Yes, we definitely have built up inventory that we haven't seen for quite some time.
04:14We have a lot of people locked into 3% mortgages, which slows the market.
04:20But you have another dynamic that people aren't really talking about, which I think is most people, when they set
04:27out to find a place to live,
04:28don't have a preconceived notion, I must buy, I must rent.
04:32About half, 60% will either enter by.
04:35Over on the multifamily side of the world, you have the highest vacancy rates you've seen in decades.
04:41So you're up at 12.5% vacancy.
04:44You have about 1.8, 1.9 million vacant apartment units.
04:47It's about a 400,000 unit surplus.
04:51So the housing market is going to have a little competition this spring from the rental market.
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