The Role of AI in NYC Real Estate: Where It Helps and Where It Falls Short

What a $50 Million Penthouse Deal Revealed About AI

Artificial intelligence has quickly become part of the real estate process. Buyers use it to research neighborhoods, compare properties, estimate values, and better understand financing options. Sellers use it to gather pricing insights, analyze market trends, and prepare their homes for sale. Used properly, AI can be an incredibly valuable tool. But like any tool, it also has limitations.

For example, a $50 million Manhattan penthouse transaction nearly unraveled after both sides consulted ChatGPT and received conflicting guidance about the property’s value. The issue wasn’t the technology itself. It was that AI was working from publicly available information, while the transaction depended on nuances that weren’t readily available online—a distinction that ultimately mattered.

Where AI Can Be Extremely Helpful

There is no question that AI is changing how consumers research real estate. Many buyers are now using tools like ChatGPT to:

• learn real estate terminology;

• compare neighborhoods;

• understand financing options;

• generate questions to ask agents; and

• research schools, transportation, and local amenities.

For sellers, AI can help organize information, analyze market data, and better understand the selling process.

Relying on artificial intelligence has become increasingly common among buyers and sellers gathering information about the real estate market. In many ways, these tools are creating more informed consumers and changing how people approach the buying and selling process—a positive development for the industry as a whole.

Where Context Still Matters

The challenge is that real estate decisions often depend on information that isn’t easily captured in a database. A property’s value isn’t determined solely by square footage, recent sales, or public records. In New York City especially, factors such as:

• building finances;

• co-op board culture;

• renovation policies;

• management quality;

• sponsor reputation;

• seller motivation; and

• deal structure

can all influence a transaction in ways that AI may not fully understand.

Two apartments in the same building can trade differently for reasons that aren’t immediately obvious from publicly available data. That is where local expertise and experience still matter.

Why NYC Is Different

New York City’s housing market has always operated differently from much of the country.

Co-op boards have varying approval requirements. Buildings have different financial structures. Certain neighborhoods command premiums that can be difficult to quantify through data alone. Off-market opportunities and relationship-driven transactions also remain a meaningful part of the landscape.

These are the kinds of variables that often shape outcomes but don’t always appear in a search result or AI-generated response.

The Best Approach Is Both

The takeaway isn’t that buyers and sellers should avoid AI. Quite the opposite. AI can be an excellent starting point for research, education, and preparation. It can help consumers ask better questions and make more informed decisions.

But when it comes to evaluating a specific property, understanding local market dynamics, or negotiating a transaction, context still matters. The most effective approach may not be choosing between technology and expertise—but using both together.

The Takeaway

AI is becoming an increasingly valuable part of the real estate process, and its role will likely continue to grow. But real estate remains a highly local, highly nuanced business. Data can provide insight. Experience can provide context.

The strongest decisions often come from combining the strengths of both.

---

Serj Markarian 

Licensed Associate Real Estate Broker | Manhattan Luxury Real Estate Advisor

Brown Harris Stevens, NYC

Not subscribed yet? Join 7,000+ readers who receive my weekly market analysis and monthly Inbox Concierge. Join here

For private inquiries or to schedule a buying or selling consultation: Inquire Here