Big data is a term that gets thrown around quite a lot in conversation, but for good reasons.
It is making a big splash in the business world, acting as a harbinger of the new high-tech age. The real estate industry was not as overly quick to embrace the winds of change, but at this point, the shift is visible on the face of the property landscape.
It is crucial to realize that big data represents bits of information, and in the raw form, it does not prove to be an asset. Namely, it is only after we organize, process, structure and interpret it that the real business value is added.
Digital (r)evolution
Big data is everywhere and it is evolving rapidly. It is becoming more and more accessible, and it helps that the analytics have never been easier.
Indeed, the software technology is advancing by leaps and bounds and enables us to develop a deeper understating of what drives competitiveness in the markets.
Real estate investor platforms have even come close to predicting the answer to the million dollar question of what the property will be worth in 10 years.
Consequently, big data is already an integral part of the competitive game, the key to productivity in the real estate sector. The quality of data directly impacts the quality of their decision making.
It reveals new angles and opens doors we were not even aware of. Thousands of economic and demographic variables encompass consumer spending, market potential, traffic volume, shopping center locations, crime statistics, etc.
Yet, the goal is not only to hoard data, but also to analyze and process it. One can utilize useful BI software to mix and match multifarious categories and carry out complex analysis, identifying correlations and trends.
As a result, real estate investing is no longer plagued by a high level of risk. In the olden days, you would need either a bit of luck or a ton of spadework to strike a great deal.
Nowadays, though, one may effectively identify areas where the growth is most likely to occur and those that are best avoided in the near future. Likewise, big data has made appraisals less of a tricky business. A value of the property can still fluctuate based on a wide array of factors, but now we are in a position to grasp them.
Search for the holy grail
One of the major big data highways is online search data from Google and other search engines. Agents are able to unravel patterns of user behavior and pinpoint where people are conducting a research from.
This helps a great deal when you want to adjust your targeting and identify areas where demand is increasing. Moreover, this kind of big data gathering gives agents a clear idea about what features customers look for and what they expect from real estate purchases.
Furthermore, there are numerous reputable private and public sources for aggregating data as well as cloud-based content libraries with millions of maps and data layers. Many of them are free, under a creative common or commercial use license.
It should be noted that consumers benefit from big data development as well. They can tap into free resources and see how much other houses in the neighborhood are selling for. So, agents should not be caught off guard by the people’s ability to sniff out overpriced homes.
This all points out to the proliferation of the shared economy model. Crowdsourcing and open data are gaining traction across the globe and are expected to bring forth seismic shifts in many business sectors including the real estate.
A whole new ecosystem is emerging and communities are sprouting like mushrooms after the rain. This is certainly going to change the way people perceive paid services and give rise to new business models and innovative players.
This phenomenon is only a natural continuation of the surge in modern technology, which allows us to collaborate across time and spatial borders.
It is clear that big data changes the prevailing way of thinking about the real estate industry, though its full potential waits to be fully unlocked. So, do not fail to ask new questions, discover lucrative opportunities and stay ahead of the curve in 2017 and beyond.
An ocean of opportunities
The vast big data ocean contains billions of pieces of information and the ultimate goal is to find meaning and patterns. It decreases the risk traditionally associated with real estate business, empowering us to make informed decisions based on facts and figures.
We have a chance to obtain greater insight into markets and trends that shape them.
Faster analysis and effective prediction work in your favor, but they also drive winds to the sails of your competition. So, it is high time to think bigger and dig deeper.
Oscar Waterworth is the editor of Bizzmarkblog. Find him on Twitter orFacebook.