Big data fuels significant change in the real estate market. Sites like Zillow and Fizber offer detailed real estate data that buyers, sellers, agents, brokers and investors use to make informed decisions. Gone are the days when real estate brokers and agents had proprietary access to real estate market information that the average buyer or seller could not easily find. Depending on your role within the real estate industry, there are definitely pros and cons associated with the growth of big data.
Building Management Improvements
According to Keith Outlaw who was quoted in the article published on CNBC, How Big Data Is Transforming Real Estate, waste can be reduced by adding sensors to buildings to track things like temperatures and electrical usage for improved usage efficiencies and decreased repair costs. While the initial investment can be steep, the upside can pay off in the future. Algorithms are used to track relevant correlations that can improve data analysis efforts for the purpose of cutting expenses.
Evolving Roles of Real Estate Brokers and Agents
Now that prospective buyers and sellers can easily access real estate market information without going through an agent who can unlock the wonders of the MLS for their buyers and sellers, real estate professionals must find new ways to remain relevant. The good news for these professionals is that the expertise they offer clients is more needed in contemporary times than ever before. With so much information available, savvy real estate agents and brokers seize the opportunity to organize and analyze all the relevant data so they can advise their clients about viable options.
Comparing different data sources and deciding how best to assimilate competing information is the type of consultative service that real estate professionals can offer their clients. It is noteworthy that the tax assessor’s office, Fizber, Zillow, and the MLS can vary significantly when they assess the value of a property. Real estate agents with experience in a specific marketplace are in a unique position to analyze conflicting information.
Another tool that big data has provided works via a smartphone app that provides buyer feedback to owners. Real estate experts use the timely feedback for negotiation purposes. This type of tool facilitates the decision-making process so that sellers can adjust as necessary to increase sales.
Other Investor Tools
Increasing amounts of data can be used by the real estate investment community to minimize risks and assess the ROI of any project. According to an article published in Forbes entitled, Data Centers: Where Big Data Meets Real Estate, “Big Data” improves transparency which dramatically enhances an investor’s ability to accurately analyze investor data.
The Challenges of Big Data for Real Estate
According to Inman’s article, What Big Data Means for the Real Estate Industry, the big question for this century is how to use all this data. The evolution of the real estate industry will favor those business professionals that embrace the reality of the new marketplace and learn how to manage the mountains of data available. With every step forward, there are always roadblocks that must be navigated. Real estate professionals who ignore the writing on the wall about how big data will impact the market risk losing out to well-prepared competitors that learn how to analyze the ever-increasing amount of data sure to overwhelm unsuspecting professionals who do not make a firm commitment to the new world order.
Conclusion
The future of the real estate industry is here and Big Data reigns supreme as an enormous factor shaping the landscape. Investors, agents, brokers and real estate management companies share in the upside of Big Data’s positive impact. By analyzing available data to better understand potential clients’ needs and project ROI factors, all parties stand to gain. While the sheer volume of data available may prove to be a stumbling block for unprepared professionals, managing the data is imperative for success.
