AI-enhanced listings add confusion to an already difficult housing market

AI-edited listing photos are sending American homebuyers properties that do not match what they saw online, adding confusion to an already hard housing market, brought on by Donald Trump’s economic decisions.

According to reporting from CNN, homebuyers say photos now show over-smoothed exteriors, fake green lawns, warped door frames, and even lights and windows that are not real, forcing people to spend time and money touring homes that look different in person.

A user on X said, “So I’m noticing, as I look at houses to rent, that landlords are using AI to stage the pictures, but the AI is also cleaning up the walls, paint, windows, and stuff in the process so when you go look in person it looks way more worn and torn than the pics would show.”

Real estate agents struggle with altered photos during showings

Megan Kolstad, a real estate agent with The Hive in St. Paul, Minnesota, experienced the issue during a client tour in the city when listing photos showed a bedroom window that did not exist.

Megan said, “When we got to the property, it was just a lot of comparing the photos we were seeing online to what we were experiencing in real life, and I don’t feel like that’s the best use of our time.”

Some brokerages now set their own limits. Megan and Sonia said their offices advise agents to clearly label virtually staged images, so buyers know what they are seeing before scheduling a tour.

The National Association of Realtors, the industry trade group, says it supports responsible AI use in real estate, telling home buyers that there are ethical ways to use AI-generated photos, while reminding them to follow the Realtor Code of Ethics, which instructs agents to avoid exaggerating, misrepresenting, or concealing important facts tied to a property or transaction.

States are stepping in.

The New York Department of State recently warned buyers and agents about a significant rise in artificially generated pictures on listings that could violate deceptive advertising rules. The agency encouraged buyers who feel misled to file complaints.

In California, a new law starting January 1 will require agents to disclose digitally altered images and also post unaltered photos online.

Nathan Cool, a full-time real estate photographer in the state for 15 years, said he generally supports the law. Nathan uses AI features in recent Photoshop versions to speed up routine edits, while warning about newer tools that go too far.

“The red flags came along where it’s like, ‘wait a minute,’” Nathan said. “This is starting to change the structure. Walls are longer. Windows could be bigger. You might have an added corner — it could hallucinate and add things. That became very risky.”

Get $50 free to trade crypto when you sign up to Bybit now