How the Power of Big Data Has Changed the Future of the Real Estate Industry

09 Jul 2019

Overview

It is not a secret that Big Data is stepping up the pace in a number of industries. Daily humans and enterprises create and process a huge amount of information that is necessary and helpful in different spheres of our life. Experts estimate that 463 exabytes of data will be generated every day globally by 2025. This figure proves that in the nearest future all market sectors will be affected by the data-driven technologies. Some industries have been already successfully implementing the latest advancements of Big Data. Real estate industry is no longer lagging behind in this respect.

The application of Big Data and AI in real estate has become a mainstay as it is transforming the sector considerably. The real estate data providers enable companies to better analyze consumer habits and make well-considered business decisions. For data optimization's sake, it would be great for property website owners to choose the right CRM integrated with their site.

This said, the priority of real estate data science initiatives is to process huge sets of data obtained from numerous sources. The insights surfaced from Big Data analytics help optimize consumer search and provide recommendations to potential customers when they address real estate websites. And finally, aligning your real estate website and CRM with RETS is definitely the right next step to make, since accurate and timely data contributes immensely to UX improvement and overall efficiency. 

So, residential real estate analytics empowers companies and their customers with detailed analysis of surroundings, sale tendencies and neighborhood of the considered area. Thus, it can help potential buyers find their dream home saving time and efforts. On the other hand, it informs the real estate agencies of their clients’ preferences. 

Main challenges in property management Big Data could solve

Modern property investors can no longer rely on traditional ways of studying the market. They have to adjust to the technology-driven real estate industry to succeed in it. Predictive analytics in real estate supply investors with a number of tools and resources to meet the following challenges.

  • Relevant and Accurate Assessment of Real Estate Market

Commercial real estate analytics is key to reasonable investment in a top location. Applying its data, both experienced and green property investors come up with the knowledge of home prices, rates of vacancy and rent, as well as market cycles.

A proper evaluation is important not only for investors but also for other actors of the market. Sellers need it to sell their home for a good price. Buyers in their turn want to know how much their property may cost depending on particular factors. Lenders need to be sure that they have low risks while providing a loan.

According to 2019 Commercial Real Estate Outlook, 39% of investors plan to use predictive analytics for commercial real estate investment decisions. 84 % of investors want companies to prioritize predictive analytics to make buildings future ready. 

  • Fast Search of the Best Investment Properties

Location is a crucial characteristic of commercial property. People have to consider many factors while designing and constructing commercial real estate. Big Data in commercial real estate enables businessmen to choose the best location of the object, regarding their investments goals, for instance, whether it is a future shopping mall or a business center. Due to predictive analytics, property investors can see the projected rental income and expenses. Moreover, it is possible to identify from which investment properties you will get the biggest cash flow.

  • Successful Targeted Marketing

If you happen to experience the situation when a particular property won’t sell, it is high time to resort to Big Data technologies. These tools keep you abreast of the latest property trends depending on different factors related to potential buyers (age, gender, marital status, financial conditions, ethnicity, etc) and geographical location of the object. Big Data facilitates development of the marketing strategy for both residential and commercial real estate companies.

Top 3 Benefits of Big Data for Real Estate Industry

It is practically impossible to neither underestimate nor overestimate advantages of Big Data in the real estate industry since they are obvious and undeniable. Let’s get acquainted with the greatest positive effects of today’s data technologies for property business.

Minimization of the risks

The application of big data solutions in commercial real estate benefited companies in terms of bringing down financial uncertainty. Through the instruments of predictive analytics, businesses analyze various factors like age and state of the building, its rebuilding records, information on the current owner, etc. Thanks to such details, agencies estimate the property object and give their clients current information with due respect to their demands.

Better Customer Engagement

Unpredictable customer behavior can create a serious problem for real estate agents.  It is difficult to comprehend why the clients dislike this house and prefer another. The question remains open why they suddenly change their mind to purchase the particular house when they seemed to be ready to do it. In such cases, a specialized software comes up in handy. Big Data algorithms help the agents understand potential clients better and supply them with adequate services. Eventually, the overall customer involvement rate and trust in real estate businesses increase.

New Level of Data-Driven Insurance

Insurance services in the real estate sector are in great demand nowadays. Despite the cost of home owner insurance that can vary from a low of $337 to $3,575 annually depending on a state people tend to ensure their property.

Big Data can be of great assistance to real estate companies, insurance companies, and buyers. With Big Data analytics insurance agents can calculate the possible risks and find out a certain type of insurance people need in the exact area. It allows them as well to develop custom plans for different regions. Customers enjoy the advantages of data technologies when choosing an insurance service to ensure their houses.

Use Cases of Big Data In Real Estate

As you know, many real estate companies have been already using big data to promote their business and receive bigger returns. Now I suggest we may consider some successful examples of implying data technologies for creating complex systems and developing property applications.

Transparent Data

Every real estate business strives to present reliable and precise information to customers on the website. Such giants like Trulia, Zillow, and Redfin place the latest real estate surveys that are rather informative for agents, buyers, and sellers.

Example: Tech giant Zillow has designed a Zestimate instrument based on Big Data technologies. This tool calculates the value of property regarding location. What is more, Zestimate can anticipate the future cost of the residential or commercial property taking into account the present market data.

Growing sales

Applying Big Data, real estate companies are able to analyze the interests of their clients and then tailor the information on the website to customers’ needs. All this begets trust and loyalty to the company. Consequently, real estate businesses are likely to experience bigger profits.

Example: Trulia has developed a special software Trulia Insight for studying customer’s interests, financial conditions, purchase history, etc. Another product of Trulia is What Locals Say. It helps prospective renters and buyers see if neighborhood fits their preferences and lifestyle.

Groundbreaking filters

With the help of these features, buyers can find a particular house in the location they are interested in. Due to Big Data, the search process is much easier.

Example: Both Trulia and Zillow have introduced filters like location peculiarities and crime rates. The first filter informs potential homebuyers about educational (kindergartens, schools, colleges, etc.) and entertainment (cafes, bars, restaurants, shopping centers, etc.) establishments in the neighborhood. The second filter presupposes that real estate companies use big data to check on the crime level in various areas and let their users decide which part of the city is best for them.

Future of Big Data in the Property Industry

Big Data has an immense potential to enhance further transformations in the real-estate sector. Since home ownership has always been related to the American dream, Big Data will allow potential buyers to get a deeper insight into property data on their way to sweet home. Big Data will provide many tools for eliminating the risks connected with real estate investments. Technologies may appear extremely efficient in marketing when it comes to personalized offers for the consumer as well as choices of the real estate object type that can be constructed in a certain location.

All in all, where there's a will, there's a way. So, if you need an experienced helping hand to get your real estate website integrated with actionable Big Data solutions – please feel free to reach out to us at any time.

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About the Author
Valeriy Ilchenko
CEO at ByteAnt
Valeriy is CEO of ByteAnt with over 15 years of experience in software development always focusing and embracing new technologies IoT and SaaS. Besides leading the ByteAnt, Valeriy is a public speaker on tech talks, events, and meetups; mentor and marathon runner.

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