In the 21st century, big data is the new hot property. If you are serious about investing in real estate, then you’ve probably heard about big data already. The use of big data has increased by about 1,400% since 2009 and continues to grow at a rate of 25% every year. Most people recognize the power of big data from their interaction with technology in their daily lives.
In the last decade, big data has revolutionized the way we do business. Big data helps us to achieve new and more efficient levels in our businesses by collecting, analysing and applying more knowledge at a faster rate than ever before. Realtors are no exception to this trend.
Big data is the next frontier in real estate, and it’s already changing the way we do business. From smart auctions to leveraging big data in home buying and selling, big data is powering the industry forward. Here are a few ways you can use big data to improve your real estate business:
Power of Data:
Data is the currency of Big Data. If you’re reading this and you’re involved with real estate market, you likely know that many industries are using big data to present to their users more relevant and effective information. In the real estate industry, that means everything from purchasing homes to listing properties on the MLS — local multiple listing service. So here’s a look at how big data is driving real estate markets.
Data is an essential part of every industry, no matter how large or small. Real estate, as with any other industry, uses data to help sell property (and better understand market trends) and make decisions which drive sales.
Have you ever wondered what big data is? More importantly, have you ever wondered how big data will affect real estate markets? Apps like Zillow and Trulia allow users to search for homes based on the location, number of bedrooms, price range and more. You can find out who owns property using the huge database on the website. These apps use huge amounts of data to help people make important decisions about purchasing their homes. But can this technology be used to “predict” real estate markets? In recent years, many economists have begun to wonder if we could harness this information in ways that could help us manage our economy. Could big data potentially help us react faster to potential negative events such as unemployment or rising interest rates? Will we see predictions about future trends just as accurate as those made about past events?
Real estate deals are all about data. Data is the gasoline that drives real estate and new technology is fueling the engine of this sector. Big data is being applied to most aspects of the real estate industry, from marketing and sales to operations, financing, legal and finance etc.
Conventional analytical methods and data sources make it challenging to draw clear hypotheses and build robust business cases. According to mckinsey stats, Thousands of nontraditional variables can be linked to diverging, location-specific outcomes.
Impact of a data-driven approach
One of the most promising applications for big data is that of real estate. As real estate has become increasingly digitized, the value of data is only increasing. Data analytics and the use of big data are widely accepted as powerful methods for maximizing profits and minimizing costs in the real estate industry.
Do you know what the future of real estate will look like? Real estate is a $60 trillion industry and there’s no sign of it slowing down. In fact, the future is going to be even bigger than we could have ever imagined.
A successful data-driven approach can yield powerful insights. In one example, an application combining a large database of traditional and nontraditional data was used to forecast the three-year rent per square foot for multifamily buildings in Seattle. In accounting for these nontraditional variables, buildings located in the same zip code can have widely disparate outcomes in terms of rental performance.
Many real estate firms are making decisions based on a combination of intuition and traditional, retrospective data. Companies are leveraging big data and artificial intelligence solutions for doing current underwriting, portfolio review, and research processes.