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If you’ve had even a brief encounter with the real estate market, you know how much information is exchanged in the average interaction and how many considerations go into a purchasing decision. It’s not exactly a surprise, then, that big data is bringing significant change to how the real estate market conducts itself and even how residential and commercial properties are maintained. Here are four of the most interesting.
1. Big Data and AI Are Vastly Improving Decision-Making
The process of buying and selling real estate looks straightforward until you’ve purchased your first home or bid on a downtown storefront. After that, you have a new appreciation for things like “comps” — sale prices for comparable properties in the area of interest — as well as historical trends, future economic outlooks and changing demographic patterns.
All this information already exists in the world as data, but sometimes we lack the tools to gather this unstructured information from wherever it’s hiding. It can be found in expired MLS listings, government databases, census information or even trending topics on social media.
These days, being a real estate agent or a representative of a brokerage or investment firm requires time-sensitive attention to a number of variables. Big data can help businesses narrow down locations based on the neighborhoods and infrastructure there, the economic outlook and more. It can also help determine competitive bids and asking prices, as well as formulate better investment decisions.
2. Improving Marketing Strategies and Making More Personal Connections
Marketing has always been a benefactor of big data and analytics, but data-driven marketing for real estate is now coming into its own as well. Real estate agents are essentially responsible for helping people make personal connections with homes and the regions they’re located in. That means crafting the right message at the right time. Once more, we turn to data.
There are already tools the public can use to drill down into trending topics and mentions by geographical region, age and other demographic markers. This information can be found on social channels and across web traffic more broadly.
If you don’t relish the idea of performing hours of triangulation-by-web-search, you can also find companies boasting AI-powered solutions for helping real estate marketers leverage public records, unemployment and crime stats, web traffic, MLS information, lead scoring and social media mentions. It’s all in the name of reaching out to the right people via the right channels and emphasizing the right property and region attributes in that message.
Is an area experiencing an economic renaissance? An influx of recent graduates? Urban renewal projects? Are the schools there improving? More than ever, big data helps get people’s compasses oriented when they’re looking for something specific.
Not surprisingly, 60 to 70 percent of those who shop online have already made up their minds even before they reach out to a supplier, vendor or owner. That’s a confident customer. However, it doesn’t mean they’re working with a full set of information or have found the right partner or opportunity. Your messaging, if it’s serving a need or answering a relevant question, can be their guide.
3. Turning Property Maintenance From Reactive to Proactive
Residential and commercial properties have a number of similar requirements, one of which is a phone number to call for emergency repairs and ongoing maintenance. Maintenance is one of a homeowner’s largest ongoing expenses — and maintaining a warehouse or other commercial property is a big piece of company spending, too.
Connected technologies, collectively known as the internet of things, or IoT, is changing the game when it comes to property maintenance. Consider these applications for residential and commercial settings:
- Residential: Real estate experts predict that major smart home investments, such as whole-home automation, can bring a pleasing return on investment when selling a property. There are abundant automation tools for homeowners already that make a property more appealing to buyers who want a comfortable daily routine. Smart home IoT devices can also help homeowners put their household energy use into perspective and pinpoint where energy is being wasted in their homes.
- Commercial: Many of the tools that allow homeowners to find inefficient appliances, wiring and windowpanes have an industrial equivalent that can make commercial real estate locations much more capable and attractive to owners and developers. Automated lighting systems and climate control, for example, can make a building much more affordable to operate.
Commercial real estate locations, due to their complexity, are probably an even better fit than residential ones when it comes to IoT solutions. Whether it’s leaky pipes and compromised climate control getting automatically flagged for maintenance personnel, or granting greater visibility to remote property monitoring companies, technology is here to stay.
4. Sustainable Site Selection and Site Development Planning
As mapping and analytical software becomes more sophisticated and learns to draw from additional sources of unstructured information, it’s finding its way into more environmentally conscious building and engineering projects.
In commercial real estate today, there’s a big push to recycle and upscale existing buildings and structures rather than building new every time. In both cases, civic and structural engineers have to figure out how to meet several sustainability goals even while laying a very literal foundation for future business success. Those goals are:
- To optimize the useful potential of the site without overcrowding inhabitants, compromising nearby transportation, encroaching on nearby buildings or affecting the local ecosystem unnecessarily.
- To find the right structural design for the location, and the right equipment, to optimize the use of natural sunlight and renewable sources of energy. Buildings these days face optional as well as mandatory standards when it comes to sustainable construction materials and efficient energy usage.
- To build using reclaimed or sustainable materials as often as possible, while remaining mindful of the logistics of transporting materials to the site.
Developing or repurposing useful spaces of all kinds, which meet the current and future needs of growing companies and organizations, can be made so much easier with the right environmental or water-table study, by vetting sustainable builders, or by studying traffic and historical economic data.
No matter which branch or process within the real estate industry you represent, today’s and tomorrow’s technology won’t steal your thunder or do your job for you. If anything, you’ll have to stay sharper than ever to use the new data and analysis tools available to you to end up with the most compelling results.