It’s a complicated, competitive world out there, made even more complex by the powerful pandemic that turned life upside-down for so many people. For real estate brokers, agents and investors, the initial freeze on the residential real estate market quickly turned to frenzy. The fast-paced market of summer 2020 required some grounding to make sense of trends locally, regionally and nationally. That’s where data analysis comes in—to provide the ballast for residential and commercial real estate patterns and performance.
The most successful brokerages in recent years have invested deeply in technology to provide the detailed level of support their agents demand. The underpinning of the technology agents and consumers rely on is big data. Data sources such as ATTOM Data Solutions can provide some of the essential ingredients for a robust property listing site by adding information about property history and demographics, as well as valuable local insight into crime reports, school ratings, and more. ATTOM’s data on mortgage payments, home equity and sales profits for homeowners can be used to predict behavior. The availability of millions of bits of information is important, but more important is the ability of companies to harness that data into usable—and user-friendly—information.
In our vast new world of post-pandemic virtual operations, the existence of artificial intelligence, data analysis and machine learning, more than ever, drives innovation in the real estate industry in several ways:
1. Developing More Accurate Property Valuations
Every agent knows that pricing a property correctly as soon as it goes on the market means everything. In markets where low inventory is sparking bidding wars, picking the price that could trigger multiple offers requires a delicate balance. Big data provides appraisers and agents with thousands of comparable properties instead of just a few, along with insight into market trends. Investors can rely on this analysis based on multiple data points to analyze value.
2. Providing Deep Insights Into Specific Properties
In years past, investors, agents and consumers could only wonder about the history of the property they were considering and the surrounding neighborhood. Now, data that buyers need, such as how the land was used in the past, insurance claims and permits that reveal previous issues with the house, is instantly available. Neighborhood details including the trajectory of home values, crime rates, school boundary information, school performance and demographics provide valuable insights for a purchaser.
3. Predicting Consumer Behavior
Data analysis is more than reactive; it can also be predictive. Tracking mortgage payments and home equity, and matching that information with the age of a home and how long the owner has lived there, can help agents recognize when someone might be getting ready to sell. Data can be used to analyze potential leads and increase the probability of higher quality leads.
4. Forecasting Market Trends
Tracking demographics, including income levels and employment trends, can be used to predict where a wave of foreclosures may be imminent, where prices may rise more quickly or where new development to appeal to specific groups, such as young families or empty nesters, could be needed. Data can be used to identify areas that could be potential opportunity zones or locations for other types of development.
5. Modeling Building Performance for CRE Investors
Investors can rely on detailed information such as rental rates, vacancy rates, energy and other maintenance costs, as well as the bigger trend information about employment and consumer behavior, to drive their decisions about commercial buildings. Data can be used to design 3D models that help developers and investors maximize the efficient use of space.
Not so long ago, agents needed to spend time researching properties and market trends themselves to provide answers to buyer’s questions. Today, big data and new methods of analysis simplify that process, allowing agents to spend more time where they should: connecting with their clients instead of buried under endless streams of research.
Rob Barber is CEO of ATTOM Data Solutions. He directs enterprise, data and product strategy, customer acquisition and service, and corporate operations at the organization, and has more than 20 years of experience in the real estate information services industry. For more information, please visit www.attomdata.com.
Fantastic article!