Artificial intelligence is no longer a fringe experiment in real estate. The industry broadly believes in AI’s potential—but belief alone hasn’t translated into enterprise-scale impact.
The 2025 State of AI Adoption in Real Estate Survey, conducted by Keyway in partnership with The Appraisal, reveals an industry at a critical inflection point. AI experimentation is widespread, budgets are growing, and use cases are expanding. Yet most firms remain stuck in early-stage deployment, constrained by data readiness gaps, trust concerns, and integration challenges.
What’s emerging is a clear picture of where AI is working, where it’s stalling, and what must change next.
1. The Pilot Paradox: High Experimentation, Low Deployment
Nearly half of surveyed firms (45%) are currently running AI pilots. However, only 9% have successfully deployed AI at the enterprise level, and just 8% report being fully data-ready for AI adoption. This gap between testing and production creates real risk. Firms invest time and capital into pilots that never scale, accumulating sunk costs while competitors that execute gain speed and efficiency.
The takeaway: AI adoption is no longer a question of if, but how. The primary bottleneck isn’t organizational willingness—it’s data infrastructure.
2. Trust Is the Biggest Barrier to High-Value Use Cases
While AI is increasingly accepted for operational tasks, trust breaks down when financial decisions are involved. The survey shows that:
-44% of investment committees distrust AI-generated analysis
-Only 27% trust AI for financial underwriting
The main concerns center on hallucinations, unreliable outputs, system integration challenges, and data privacy and quality.
The takeaway: For AI to move upstream into underwriting, valuation, and investment decisions, it must be explainable, auditable, and grounded in traceable data. Trust—not technology—is the true gating factor.
3. The Co-Pilot Model Has Clearly Won
Despite fears of workforce disruption, the data tells a different story. AI is being used to augment teams, not replace them:
-91% of firms use AI primarily to improve efficiency
-Only 18% anticipate any form of headcount reduction
Firms see AI as a way to automate manual tasks, accelerate decision-making, and increase operational leverage.
The takeaway: The industry is firmly pursuing augmentation over automation. AI is becoming the invisible engine behind faster, more effective teams.
4. AI Spending Is Accelerating Rapidly
AI is no longer experimental from a budgeting standpoint. More than half of firms plan to increase AI spending by over 20% in the next 24 months, and 58% expect to purchase new AI software within the next year.
Importantly, these investments are being funded through reduced outsourcing and lower administrative costs—not workforce cuts.
The takeaway: AI is now a permanent line item in technology budgets. The next 12 months represent a major commercialization moment for AI platforms in real estate.
5. Adoption Varies Widely by Asset Class—With Multifamily Lagging
AI adoption is uneven across asset types:
-Student housing leads enterprise deployment at 16
-Office shows the highest experimentation but low enterprise conversion
-Multifamily—despite being the largest asset class—has the lowest enterprise AI adoption
The takeaway: Multifamily represents the largest untapped opportunity for vertical AI platforms, particularly in underwriting, comps, and asset management.
6. Data Readiness Is the Structural Constraint
Across the board, data remains the industry’s biggest challenge:
-76% of firms report significant data infrastructure gaps
-Only 8% are fully prepared for AI at scale
Fragmented systems and inconsistent data standards continue to limit AI’s effectiveness.
The takeaway: The winners in AI-enabled real estate will be those who standardize data first—not those who simply adopt more tools.
Conclusion
Several themes emerge clearly from the data:
AI adoption is inevitable—but scalable impact is not automatic.
Without clean data and strong verification layers, most firms will remain stuck in pilot mode.
Trust determines whether AI reaches investment committees.
Explainability and auditability will separate enterprise-ready platforms from experimental tools.
The next competitive advantage will come from AI-native workflows.
Firms that embed AI directly into underwriting, comps, asset management, and risk analysis will outperform those using AI only at the edges
Multifamily is the highest-upside vertical for AI adoption.
Its scale, complexity, and operational intensity make it uniquely positioned for AI-driven transformation
The co-pilot era is here to stay.
AI will not replace real estate professionals—but professionals using AI will outperform those who do not.
The real estate industry is standing at the edge of its true AI transformation phase. The experimentation era is ending and the deployment and monetization era is beginning. Over the next 24 months, firms that invest in data readiness, adopt explainable AI, and embed intelligence directly into core workflows will define the next competitive hierarchy of the industry.
Execution—not experimentation—will determine the winners.
