3D Tours for real estate
It was 2011 at an Inman conference in San Francisco when I first heard of Matterport. Bill Brown, Matterport’s founder and CEO, walked with me on the stage to highlight “the next best thing” in real estate: 3D Tours. I was there to launch reVinta, my real estate search aggregation app (aka, the Kayak.com for searching listings).
Nine years later, 3D Tours has evolved into a powerful niche among photographers and customers while demand for listing aggregation has gone the way of the Dodo bird (even agents and brokers, who used to hate Zillow, have acquiesced to its dominance). This is not my pity party (the greatest growth often comes through great failures!), it is a reference point to illustrate that I’ve had more than a casual interest in observing where 3D tech actually fits into this space.
Bright and Shiny? or Here to Stay?
The real estate industry has a track record of looking at “bright and shiny” tech that dies in a couple of years. If real estate was a horse race in technology, choosing a horse might look like choosing a mascot in the NCAA tournament – some would choose based on school colors or mascots! The reality is, real estate is an industry that is notoriously non-tech (which is why we LOVE OBEO’s position as a real tech leader in this space!) – it often looks for “differentiators” for the sake of just being different instead of actually adding true value to the customer. This dangerous practice has seen vendor after vendor innovate on gimmicky trends for agents and brokers instead of listening to the sellers.
That being said, the timing of 3D Tours release was well played – the Internet is faster and user engagement on 3D interfaces is more ubiquitous (think 2-year-olds operating touch screens better than adults!). Add the unforeseen pandemic in 2020, and voila, you’ve got a great recipe for even deeper penetration and longevity.
Does this mean every listing needs 3D Tours? Absolutely not. Photos are by far the easiest and most prolific medium to promote listings.
Matterport is the undisputed pioneer in designing the 3D platform for real estate. They may have a lot of market share as a result of their first-mover advantage, but there are other formidable competitors with some differentiators: ZillowHome, EyeSpy360, and Google Street View have many customers touting their relative benefits and claiming they are more relevant and stronger solutions. While it may depend on the use case, these 3D platforms are by-far the dominant players in the 3D Virtual Tour software space.
How do hardware and software play together? Years ago, Apple Inc. answered this question flawlessly when they released the iPhone. The art of the software/hardware symbiotic relationship is in its user-end simplicity. We should look at the 3D Tour market with the same lens.
While Matterport led its hardware solution with expensive, high-end equipment to capture their models, the other software players led with open-ended solutions that pair with hardware manufactures. Interestingly, Matterport has seen the benefits of allowing other hardware to pair with their software, hence their releases to allow even the consumer market to capture 3D models via the latest iPhone iOS 12.
Hardware manufacturers, like Ricoh, Insta360, GoPro, and Aleta love the attention from the software giants. In fact, many have difficulty producing units to keep up with demand. Ricoh’s Z1, in particular, has emerged as the industry leader in for cost-effective, high-quality 3D camera equipment, so much so that the waiting list is often several weeks before the backorder queue resets.
When to invest in a 3D Tour
Investing in listing media can be expensive. Often we need to make decisions based on ROI, return on investment. Photos have historically proved to deliver the highest ROI (lowest cost and highest return). Where does 3D Tours stand?
Perhaps the single largest influence in the cost of producing any media is the manual intensity in the capture process. 25 Premium quality photos of a 3,000 sqft building can be captured in 30 minutes. At $150 (OBEO’s pricing for high-end HDR images), we find efficiencies in automating the post-production photo editing process. The largest cost is paying the photographer. But photos are relatively much less manually demanding when compared to capturing 3D Tours.
3D Tours often result in 5X the number of photos for a listing. Instead of 25 photos for a 3,000 sqft building, a 3D Tour could have 125. You see, to create a 3D Tour, you need to stitch photos together, and if the connecting photos are beyond 8 feet apart, the 3D model could either fail or result in poor quality. Most 3D Technology companies require this 8 foot between photos method (a notable exception is EyeSpy 360!). Add to the spacing requirement an additional requirement for dimensional accuracy (which required a highly specialized 3D camera) and you have a recipe for an even larger investment into the media.
Given the required investment into 3D Tours as described above, here is the litmus test to decide whether you should consider a 3D Tour:
- Will the listing be online for more than 12 months (for marketing purposes)?
- Is the listing in an area that attracts out-of-area buyers?
- Is this a commitment to help you establish brand value?
OBEO loves our position in the real estate media space. To properly deliver 3D Tours to the Customer, we identified the one ingredient that had the largest influence: hardware. Ricoh 3D cameras are the one, high-quality hardware provider that plays nicely with all of the 3D software giants. Powering our network with this device allows us to meet customer demands no matter how who’s winning the software war.
While the current surge with 3D Tours is strong, we believe that real estate photos represent a massively larger market – by a factor of 80/20. We will continue building 3D Tours with enterprise customers and in metro areas that have high demand, but 3D Virtual Tours will always be the layer on top of the much stronger foundation of photos.