RISMedia's Real Estate Magazine

NOV 2014

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/402040

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Page 82 of 142

78 November 2014 RISMedia's REAL ESTATE Now, let's look at some more con- crete implications that Big Data hold for the real estate industry. First and foremost, expect a steady increase in the amount of available data, including that which will be available to the regular homebuyer. The recent announce- ment of the News Corp acquisition of Move, Inc. and the famed Zillow- Trulia merger serve as direct tes- timony to this. The algorithms for automatic value calculations are improving, and they will be further served by complementary data, mined in fresh and innovative ways. For example, while as of now, the median error of Zillow's price esti- mates (Zestimates) is around 6.9 percent, you can only expect that number to shrink as new data are introduced and their estimation al- gorithm becomes further refned. Imagine the implications for auto- matically determining market value if devices were able to provide data about the wear and tear, or the con- dition of the foors, or the exact di- mensions of the house. Predictive analysis is also be- coming a thing of the present. Tools such as SmartZip are likely to become much more important to the average REALTOR®, as Big Data companies like Zillow, Trulia and Redfn—seeing as they are better- equipped for producing heaps of content for search engines—are more easily found by users who are subsequently tempted to skip the REALTOR® altogether. By employing Big Data, predictive analysis software can alert REAL- TORS® as to which houses are like- ly to sell soon. It is of great value to the customer as well. Imagine hav- ing fnally decided to move out of your starter home and promptly re- ceiving a letter from a REALTOR® al- ready well-versed in your situation. It'd probably seem like an unbeliev- able stroke of serendipity, serving as a further incentive to move out and, of course, to use the REAL- TOR® in question as your agent. And it goes beyond that. As data processing and acquisition be- comes more refned, practitioners will be able to act with more fore- sight. SmartZip already seems like something quite "out there," but what would be the case if a real estate agent was able to establish patterns from seemingly unrelated data? For example, a rise of inqui- ries about purchasing abandoned warehouses in a well-populated region could serve as an indicator for a future apartment complex or I n the previous article of the series, we briefly discussed the key differences between "traditional" and Big Data. We established that the sheer magnitude and unstructuredness of Big Data allows for creative— even unorthodox—uses of the available information. It was also held that, in time, data processing would allow computers to outpace human decision making, and it therefore becomes imperative to, so to speak, jump on the bandwagon before it's too late. A Better Crystal Ball: Building Your Competitive Advantage with Big Data by Dave T. Garland Editor's Note: This is the third article in a series on Big Data analysis as relevant to the real estate industry.

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