How predictive analytics is reshaping the real-estate industry?
The invasion of predictive analytics can be seen in nearly every industry and the real estate segment is not an exception. While traditional analytics methods and data handling approaches made it difficult to make reliable insights for the future, real-estate analytics revolutionized the sector. Experts believe the industry is in the midst of a housing market boom, owing to factors such as rising mortgage rates and a scarcity of homes.
Predictive analytics has the potential to evolve the real estate market. “Predictive analytics is analyzing extracted data, using old data to predict the future. The big difference now is we have new data points that we can apply to our industry. We’re moving from the idea of hindsight to insight to foresight.” says Dave Garland Director of Strategic Investments for the National Association of REALTORS®. Unstructured, geographic, and demographic data is used by real estate experts for customized marketing, supply and demand, and investment trends. With higher internet penetration in rural areas, investors get more consumer data and predict consumer behavior while making an investment decision.
Real-estate analytics tools and solutions help realtors to find answers to questions, such as-
- Am I making the investment at the right time?
- Will this investment bring a positive ROI?
- What will be the worth of my property in the future?
- Should I buy or sell property at this time?
Benefits of predictive analytics in the real-estate market
Property value estimate
Earlier, property valuations were based on competitive analysis and the value of surrounding properties. Now it’s a more data-driven approach. Modern property value estimate approaches and technologies enable buyers and sellers to generate more accurate property assessments based on valid data. They apply predictive analytics in real-estate business to identify future prospects of the property to make the right assessments. Big data provides you with information on a large number of similar real estate assets and allows you to use that information to examine market trends, consumer behavior, and other data sets to more precisely estimate property value.
For example, Zillow, a US based real-estate firm, utilizes analytics to determine the correct property value. They use huge volumes of on-market property data in a given location, as well as past trends, to determine how much a home or property is worth. This approach is beneficial for all real-estate stakeholders to estimate their property in the most efficient manner.
With growing fraudulent activities and changing government regulations, the real-estate industry is a risk-prone industry. Real estate companies can utilize data more accurately to evaluate the future potential of a property and scope for development in the area for giving the right value for properties. This reduces the risk factors for buyers and investors by allowing them to purchase a profitable property.
For instance, predictive analytics in real estate industry helps realtors to evaluate and study the external factors such as interest rates, inflation and market trends in the coming period to identify the right time to make the purchase. This helps to make risk averse decisions with a positive ROI. It enables realtors to make informed judgments and determine when, how, and where to spend without making mistakes.
Statistical approaches predict the future trend and valuation your property holds. Accurate real-estate market predictions help the user to make better investment, spontaneous decision-making and positive ROI. Contrary to the past, when forecasts of real estate trends were based on guesswork, today’s real estate projections are based on high-end computer algorithms that can foresee market swings in real time.
Housecanary, a real-estate brokerage in the US utilizes predictive analytics to predict the market changes in the coming years. They analyze the data and identify future property performance to fix a deal that provides positive aspects to both the buyer and seller. Seasonal fluctuations may be assessed, and trends and patterns in the data can be identified to create real-estate market predictions about future performance.
Optimized marketing strategies
Consumer, property and location data from numerous public and social media sources, enable realtors to target the right audience for their plots. To improve and optimize marketing campaign interactions, commercial real-estate analytics can assist real estate agents target the correct audience demographics by gender, age, preferences, interests, and geography. Along with effective marketing communications, agents and brokerage can give suggestions adhering to the career, interest and demographics of a target audience.
For example, Redfin, an analytics driven real-estate brokerage, utilizes analytics to design their marketing communications. They visualize these insights to provide a better understanding to their clients. Using real-estate analytics, they simplify the whole real-estate experience for building loyal customers. Their communications are curated for its target audience which enable them to convey the message in a more comprehensible manner.
Predictive analytics can give a new hope to the commercial real-estate segment with its powerful prediction methodologies. It erases the need for traditional, non reliable approaches with data-driven solutions that promise enhanced profits.
Xtract.io offers predictive analytics solutions that can redefine your real-estate business. Our advanced analytics solutions are backed by accurate and real-time data for precise insights. Enhance the credibility of your business decisions with cutting-edge analytical services.
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Originally published at https://xtract.io/blog/how-predictive-analytics-is-reshaping-the-real-estate-industry/ on June 13, 2022. Check out our blog to read more articles and follow us on Twitter or Facebook.