How Big Data Has Transformed the Real Estate Industry
The digital universe is expanding. In 2012 we entered the Zettabyte Era. Social networks, mobile devices, data from wearable devices, business information are just a few types of sources that can generate huge amounts of data. The forecast for the volume of data created worldwide shows that in 2025 we will reach 163 zettabytes. In comparison, the total amount of digital information created by mankind in 2009 was half of a zettabyte.
However, big data technologies are not as much about volume, as about approaches, tools, data processing methods that help to extract from tons of digital "ore" a gram of "gold". The possibilities of collecting, analyzing and extracting conclusions from big data sets have an impact on almost all industries in the digital age. For example, big data helped Costco Wholesale to protect their food product consumers from buying unwanted or contaminated products, Disney - to improve the experience of the Disney World guests, in healthcare using big data helps to detect cancer in its early stages. What big data solutions gave real estate?
Real estate industry is considered one of the main conservatives and has never been a pioneer of the introduction of new technologies. Innovations come to real estate almost last. However, over the past decade innovation technologies have reshaped almost all areas of real estate companies activities, be it building a business model, using human resources or optimizing costs. In this case, we will examine the influence of big data in real estate industry.
Any apartment, as tangible property, has its value in the real estate market. Its price is useful to know when making any transactions where you need to determine the full cash equivalent. As a rule, assessment is performed by specially trained experts - appraisers. Real estate big data has made adjustments to the current situation.
In the USA, there are already a lot of services that make an assessment of the property (apartment or house) in terms of a huge number of parameters. The benchmark for the market is one of our customers, Zillow, who brought home search to the next level. 13 years ago Zillow combined 180 local newspapers with ads for buying and selling on its platform, and today offers a program called Zestimate that itself estimates the cost of housing and its rent. In the UK, Zoopla offers the same services, with a database of 27 million properties in the country.
Personalized advertising and marketing
Thanks to big data, our advertising is closer and closer to the future shown in "Minority Report" where characters from interactive banners address to every person by name: "John Anderton, escape from it all! Forget about your problems" and offer to buy a car, brilliants, or a vacation to Hawaii.
One of the most recent real estate technology trends is using big data software in advertising and marketing. Almost 90% of home buyers search for a house online. A site visitor knows exactly what apartment or house he is searching for. When a potential customer goes to a site he chooses a search for quite specific parameters. After watching through several options he lefts the site without setting an appointment with a realtor. And big data analytics will show marketologists of the real estate site the data about interests of the site visitors, age, the language they speak, country and region they live, and many more.
Such data provides an opportunity to make an advertisement more personalized. For example, thanks to big data analysis algorithms Zillow's platform Streeteasy, a New York apartment rental service, perfectly knows their audience and creates witty advertising campaigns for all looking for a place to live in NYC so that New Yorkers will recognize themselves in the illustrations.
Improved decision making about buying real estate
What does a potential customer usually see when searching for a suitable apartment for rent or purchase? The user sees only the address and a few photos of the object, while other important data stays behind the scenes. Thanks to the exhaustive information on real estate websites the ad: "an extremely quiet apartment being located in the middle of the city is offered for rent" actually sounds like you will never get a good night's sleep because the map view shows a night club right in front of the apartment window.
Thanks to big data when viewing an apartment on the real estate site you can find out right away the information of how old the house is, when there will be a scheduled repair, whether the building will be demolished, how much to pay for utilities, parking and everything you would know only after living in a certain area for a couple of years. The collection of detailed information from open sources like websites of developers, reviews on social networks, management companies, educational institutions simplifies the choosing process for customers.
Advanced property search filters and discovering relevant home information require processing of a huge amount of data. American service Trulia provides an opportunity to evaluate an apartment or a house in terms of a huge number of parameters. You can calculate the time to go to work, depending on the type of transport you use, to see the average age of neighbors, to find out the number and types of crimes in the area.
Detecting ideal zones for real estate developers
Location can be considered the most important element of the future success of the commercial property. Design and construction of commercial real estate is a very difficult task. In order to make it profitable you need to take into account many factors. Commercial real estate big data helps to choose the optimal location of the object, taking into account its purpose - where to build a mall to attract more customers, and how to locate a business center making it easier for employees to get to work.
Deepblocks, which recently moved to Miami from Silicon Valley, analyzes big data of development projects applying artificial intelligence. The process of real estate predictive analytics takes 5 minutes, whereas previously it took from 3 to 6 months of careful work by a lot of real estate market experts.
It is only the beginning
The implementation of big data technologies in the field of real estate is likely to be slow. And real estate big data benefits are already obvious to most: big data can definitely improve the efficiency of realtors, simplify the home-search process for customers, and eliminate unnecessary costs in development. All you need to do is to make the right choice of a real estate software development company.
If you are already struck by the size of how much information is being processed, then here is another interesting fact. Today, only 0.5% of all available data is processed. Therefore, the most interesting is still ahead.