Stay ahead of the market curve
Knowing future market trends is a big plus for real estate agents
Big data and business intelligence have made it possible to take the heaps of scattered computerized information gathered from industries, businesses, social networking and more and use it in a meaningful way to predict future trends.
It’s called predictive analytics. And the concept is being used in real estate to predict trends, which, when applied, should lead to better real estate investment decisions.
Predictive analytics is a fancy term for leveraging available data so that individuals or groups (real estate agents, brokerages and the industry as a whole, for example) can use the information to gain insight into what is likely to happen based on past events. “Likely” is an important word in this instance, as predictive analytics is not about absolutes, but rather about probabilities, according to an article by Rob Marvin on
PCMag.com
. In essence, predictive analytics is computers learning from past behavior and enabling data users to do certain business processes better, according to PCMag.com.
Big data’s big picture
What it all means
Essentially, predictive analytics turns big data into real and usable information that can give real estate agents a competitive edge. Armed with predictive analytics and knowledge of how best to use the information, agents can filter information to fit clients’ needs and provide a value-added service by helping clients get the most bang for their real estate bucks.
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One of the ways predictive analytics can be used is for data mining, which involves studying big sets of data to uncover behavioral and other patterns and discover new information. Predictive analytics also allows for what’s called machine learning, which drills down into the data to reveal what’s most important—the “gold data nuggets,” Marvin wrote. Predictive analytics uncovers patterns that are not easily seen by humans and reveals reliable forecasts, which take into account the “what-if” possibilities, according to an article on the use of predictive analytics in real estate investing by Peter Abualzolof on
MashVisor.com
. It’s a step ahead of traditional analytics, in which big data is collected and studied to provide a picture of what happened in the past, according to Abualzolof. Today’s big data and predictive analytics provides a big-picture view, he wrote.
Possibilities in real estate
Making sense of local real estate markets can be a complicated task, because real estate is constantly changing. Predictive analytics takes what has been known to occur, as well as the potential for market volatility, to paint a picture of what’s ahead for not only the industry, but also for a particular neighborhood.
Predictive analytics uncovers patterns that are not easily seen by humans and reveals reliable forecasts, which take into account the “what-if” possibilities…
There are tools that help to pool and analyze the data. Agents, for example, might find available analytics tools like
MashVisor
can shed light on the decision-making process about whether to invest in properties or not. If they’re assisting buyers, sellers or interested in investing in real estate themselves, agents can use MashVisor’s analysis of big data to assess conditions in the housing market and forecast pricing, as well as predict risk, demographic shifts and other market changes in neighborhoods throughout America, Abualzolof wrote. The result is investors feel like they’re going into real estate investments with their eyes wide open — with a sense for what is likely to happen and what to expect with the properties they buy. This and other predictive analytics tools help investors to assess investments for timing, location and big-picture value, according to Abualzolof. Agents and investors can use predictive analytics to more effectively manage rental properties, so clients earn higher returns on their investments. Abualzolof cited the business intelligence capabilities on MashVisor’s Airbnb Pricing and Occupancy Insights, which forecasts important variables needed to enhance future occupancy rates. It also helps analyze where and how buyers can get the highest return on properties, including such things as whether a buyer in a specific market is better off investing in a one-, two- or three-bedroom home, based on likely renter profiles —whether they’re singles, couples or families.
The result is investors feel like they’re going into real estate investments with their eyes wide open— with a sense for what is likely to happen and what to expect with the properties they buy.
The information helps not only with the ignition decision to purchase a rental property, but with focusing on targeted marketing efforts to those future tenants, according to Abualzolof. Another option in the real estate predictive analytics’ space is CoreLogic, a property information, analytics and data-enabled solutions provider.
CoreLogic
offers home price index tools and an analytics suite that aggregates public record, mortgage performance, valuation, MLS and pricing data to forecast home prices up to three decades and more information for real estate agents, mortgage professionals and others. These are just a couple tools for using available data to the real estate agent’s advantage. There are many others that are industry-specific and more general. It’s best to do your research on whether a particular tool fits your needs and if using the data makes sense for your real estate business.
Predictive analytics is not about absolutes, but rather about probabilities.
Agents and investors can use predictive analytics to more effectively manage rental properties, so clients earn higher returns on their investments.
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Get a handle on analytics
Learn what analytics means to your business
Stay ahead of the market curve
Discover how predictive analytics can impact real estate
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Overcome your fear of analytics and get your business moving
Win big with big data
Learn how big data is changing the real estate landscape
A big data primer
OnCourse Learning’s education manager speaks to the importance of big data in real estate
Penetrate the market
Snapchat is becoming a real estate marketing sensation
Increase engagement
Use analytics to gauge your level, then get started refreshing your brand
Real-world analytics
Read how one real estate agent is leveraging big data and how you can, too
SEO tips you need
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OnCourse Learning author John Mayfield provides a unique take on big data
Using data to boost your business
Our analytics for real estate guide offers information and advice for maximizing big data’s potential
Choose the right CRM
Know what type of CRM best fits your business
Determine your CRM needs
Heed these warning signs that you need a CRM
A blend of customer service
Mix it up by using tried and true customer service and CRM services
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Author Dan Hamilton’s tips for keeping your database full of good data
Harness the power of Google analytics
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Top GA metrics to boost business
Get the best out of Google analytics using these top metrics
Scrub your database
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