Big data appears to be one of those current on trend topics that’s almost impossible not to engage. By definition, what is big data? The term ‘big data’ is relatively new, however we’ve been gathering and storing large amounts of information for a very long time. Ask any property valuer and they’ll tell you about manually searching through Valuer General and sales records looking for evidence to support their work. It’s the same with big data, as eventually the data must be analysed and then interpreted to be of value.
The greater the volume of data collected from a variety of sources, including business transactions, social media and information from machine-to-machine data, the more potential value it offers. In the past, storage of the information was a problem which new technologies, including cloud based software, has solved. Technology has also greatly speeded up the process, with some functions now happening in real time.
Perhaps one of the most exciting aspects of big data is the increasing ability to extract data from a wide range of sources. Not only traditional databases, but into areas including email, video, audio, social media and financial transactions.
Appreciating that data comes from many and varied sources for any industry, and that includes property, how to link, match, cleanse and transform and correlate data into something useful is key.
The main value from big data comes not from the raw data, but from the analysis and insights it helps to unlock. How data supports decisions and product/service and innovation in areas like urban planning and marketing, still requires experience and professional skill. It’s not a matter of ‘pressing a button’ and hey presto we have the answers.
Let’s consider what are some of the property related trends big data is already helping to drive?
Real estate has traditionally been associated with personal networking and lots of hard work that was deeply dependent on timing, detecting trends and admittedly a little bit of luck.
Today that’s no longer the case as big data is changing the way real-estate professionals, buyers, sellers and banks think about and work with the property market.
On one hand, we have services that link consumers into big data delivering better market insights. On the other hand, real estate professionals are questioning whether big data can replace the human-wisdom side of property transactions.
It is true that big data processes that are helping to access the patterns locked up in a myriad of real estate information are changing almost every aspect of the market.
Buyer’s Access to Data
Perhaps the most immediate example of big data with real estate, has been the unlocking of almost endless market information for consumers. Big data helps deliver information and context, that’s real and actionable giving anyone detailed insights.
The information includes listings of homes for sale and rent, geographic information, facilities and endless comparisons. The tools can deliver to consumer’s information about their property’s potential value and help them understand home-value trends within almost any neighbourhood or suburb.
That sort of information used only be the preserve of the local real estate agent, now thanks to big data it’s a simple search on anyone’s smartphone.
Big data isn’t just helping consumers, it’s creating new ways to plan developments and communities.
For example, sensors that would track air quality, traffic, energy use are now common place around new developments.
This information can be used to plan what kinds of spaces and homes work best in terms of health, energy efficiency and other points. It’s this sort of data that Google plans to apply to its cities vision.
Beyond the consumer and real estate industry, banks can use big data resources to determine the general financial stability of a region. This then helps to inform how much, or how little they might lend in particular areas.
Banks also use big data to give their clients greater insights into values across an area which further informs their home loan customers.
Real estate professionals are also using big data to understand the market in refined ways. Big data from websites and from information published by the major listing portals, can help identify what site visitors are doing when looking for real estate online.
This data changes almost daily, and can be used to refine marketing messages and for large projects helps the management of stock. The data helps to identify what product, locations and features are in demand.
The Role of Real Estate Agents
Empowering consumers is good for the consumer, however it’s important not to overlook or over simplify the basics underpinnings the real-estate industry, and that’s the role of the ‘human agent’. There will always be someone who knows a community, by using their experience and instincts about property sales.
Big data is very useful and makes a major contribution to the industry, however, when buyers seriously focus in on an area or a project, you really need a professional agent who is there to give reliable information and personal guidance.
An expert real estate agent knows the inside secrets of an area. They provide the important interpretation of the data.
The internet and how it uses big data is a good place for consumers to start, but an expert who is daily working in the market will help get the whole story for anyone buying or for developers planning new projects.
With big data, we are going to need people who can optimise systems on the back of data, this will be the challenge for the industry and the market is already evolving.