The power of data is being recognized and exploited by almost every sector, with more applications for this all-encompassing resource being discovered every day. One of the industries that is relying more heavily on data than ever is real estate.
In fact, a 2018 report from Deloitte hailed data as “the new gold†for the real estate industry. One study found that the global market for real estate analytics will be worth nearly $19 billion within the next six years.
In this article, we explore the importance of data in real estate and examine just a few of the ways in which it is applied.
Make Accurate Estimates of Property Values
One of the most important things any property buyer needs to know is the value of the property. Big data technology has provided some very useful insights for customers and brokers trying to conduct property valuations.
One of these tools was created by Zillow. The tool is called Zestimate and it is able to accurately assess a current property value based on other properties in the region and known details about the property size, history and other factors that are taken into consideration.
There is still some question as to the accuracy of these tools. Investopedia reports that the median error-rate for on-market listings with Zestimate is 1.9%. However, the tools are becoming more effective over time, especially as their machine learning algorithms are better trained with new data sets.
Professional Performance and Customer Service
In order to stay ahead, real estate firms can look into the figures of competing organizations; from the number of each type of property on their books to the average asking price, the time spent on the market, professional fees and commission rates and more besides.
This helps each company to better understand their position within the field and calculate what they must do in order to outperform the rest.
Collecting data about “peripheral†businesses within the world of property can also be extremely helpful. It allows real estate agents to make accurate estimates regarding typical conveyancing fees and the costs of EPC, removals, mortgage fees, taxes, surveys, searches and any other expenses inherent in the buying or selling of property.
Big data has proven to be highly effective at improving customer service in many fields. Fifty-eight percent of companies using customer analytics tools have reported a substantial improvement in customer retention. Due to the precarious nature of the real estate industry, they have to go the extra mile to address customer concerns. They can benefit even more from data-driven customer service solutions.
Developing a clear understanding of these factors enables industry professionals to better advise potential clients of the overall costs of selling a house.
Automation
Automation in real estate has been increasing for a long time – and the major changes necessitated by the outbreak of COVID-19 have pushed it even further forward.
Chatbots represent a key example in the field of customer service; they provide potential clients with the answers to basic questions and point them in the direction of any additional information they may require. Chatbots are highly cost-effective for real estate companies. One market analyst found that most popular real estate chatbots cost between $69 and $499 a month, which is a drop in the bucket for successful real estate companies.
This is all done without the need for agents to give up their valuable time unnecessarily – making processes quicker and easier for all involved.
Chatbots are automated and powered by AI, which, of course, needs a steady supply of high quality, relevant data in order to function effectively.
Marketing
As in other sectors, real estate organizations need to gather demographic and location related data. This helps them to better understand their target audiences and therefore determine the most effective ways to advertise and market their products and services.
VR and BIM
Accurate 3D imaging makes a huge difference in real estate development and sales.
VR (Virtual Reality) is being used more and more to allow potential buyers to remotely “view†a property, while BIM (Building Information Modelling) allows for greater accuracy in the planning and detailed layout of any construction project.
Both of these resources rely on vast amounts of extremely accurate data to function.
Smart Buildings
The effects of the rise of automation are also clear in the construction sector. Smart buildings – featuring automated lighting, security, heating, air conditioning and more – appear to be the way of the future.
The technologies applied within these structures are required to continually gather, analyze and implement huge amounts of data to facilitate the ease and convenience of all building users.
Appraisals and Valuations
For real estate specialists to effectively survey, appraise or value a property, they need access to large quantities of relevant local and national data. Doing this enables clear standards to be maintained across the industry.
For this reason, the data that informs work of this kind must be kept relevant and up to date at all times.
Industry Forecasts
Some of the most important data in the real estate industry are the figures that help to track local and national property prices and the other financial elements involved in home sales.
By researching and recording these figures, an agency or other real estate firm can measure and follow trends, which will, in turn, keep them informed about the local and national market.
By analyzing data in the large scale, it is possible for real estate specialists to calculate the various trajectories the industry is likely to take in the long term.
A better understanding of the demand for different types of property and developing trends regarding the use of buildings can allow real estate firms to become more responsive. This will enable changes in the world of property to take place smoothly and organically.
The above are just a few of the ways in which data is becoming absolutely invaluable to the real estate industry – and, as time goes by, it is almost inevitable that new ingenious applications will arise, further transforming this swiftly advancing professional sector.
Big Data is a Powerful Changing Force in the Real Estate Sector
The real estate sector is changing as big data technology becomes more important. New advances in AI, predictive analytics and machine learning technology will help companies address some of their most pressing concerns in a rapidly evolving market.
