Big data is a growing, mainstream trend that is impacting businesses across different industries, and real estate is no exception. Big data has revolutionized the real estate industry in the last decade and opened up many opportunities. These changes have transformed almost every aspect of real estate operations, and the industry is now leveraging data as one of its largest commodities.
With the power of big data, businesses can conduct predictive analysis and build customer-centric algorithm models to remove the guesswork and gain accurate insights into expectations, consumer behavior, buying patterns, and other important aspects of real estate. Businesses can use this data to determine real estate pricing models, customer preferences and consumer trends, allowing them to make smart business decisions and generate higher revenues.
Here is a look at what big data is all about and how leveraging data has played an influential role in the modern real estate industry.
What is big data?
Big data is a massive and diverse set of data, both structured and unstructured, that is collected from social media, search engines and other non-conventional sources. Businesses and industries often apply computer analysis to this data to identify and evaluate patterns and trends. Since 2009, the use of big data has grown by around 1,400% and continues to increase at a rate of 25% every year.
Those interested in learning more about this field can earn an online MSC Business Analytics degree at Aston University. In this type of degree program, you’ll be able to learn more about how to use data for strategic decision-making and problem-solving through practical business applications, first-hand experience using cutting-edge technologies and studying relevant case studies.
When it comes to real estate management, market data is about the value of a property based on market conditions such as sale prices in a particular region, geographic conditions, amenities and population changes. This market data plays an integral role in sales closure and comparisons.
How is data being leveraged for real estate marketing?
The real estate industry has evolved into a highly competitive field thanks to the population explosion, so it is vital that businesses leverage insights from big data to come up with successful real estate marketing campaigns. Here are some ways in which the real estate management sector uses big data and data analytics to enhance its marketing endeavors.
Understanding market trends
Using big data, real estate businesses can keep track of additional data points such as demographics, employment trends, the area in development, income levels, rising price trends, and more to gain insights into the delicate intricacies of the real estate market and how they can navigate and prepare for potential future events such as spikes in sale prices, foreclosures or the demands of specific groups.
Revenue optimization
The primary objective of every real estate corporation is to meet their Return On Investment (ROI) in a brief period to optimize their long-term revenue. Analytical information leveraged from big data, integrated with advanced technologies, can boost all facets of real estate, resulting in better revenue for businesses.
Improved customer engagement
Unpredictable customer behavior is one of the most challenging issues in the real estate industry. It can be difficult to understand why a client dislikes a certain property and prefers another one. In such cases, real estate businesses can collect data from social media and online tools such as a Customer Relationship Management (CRM) system. This allows realtors to develop an enhanced customer experience, understand a buyer’s needs, use insights to target prospective clients through personalized emails, provide better recommendations based on the buyer’s preferences and improve customer service.
Predicting consumer behavior
Applying big data can help realtors predict customer behavior. By analyzing and evaluating data such as mortgage payments, payment schedules, home equity, property history, a potential client’s age and financial situation, and how long they have lived in a house, realtors can predict when someone might be ready to put their property up for sale. Such analytics can provide insights into trends that point to higher-quality leads and property potential.
Targeting potential clients
Finding the right audience is crucial for successful marketing. Using big data solutions, real estate businesses can analyze, track and predict consumer behavior, requirements, and local market demands. This helps determine what prospective clients are looking for, making it easier for agents to locate and appeal to their target audience. By leveraging data analysis, real estate businesses can target these customers directly by offering properties that meet their preferences, tastes and expectations.
Precise property evaluation
Realtors use property evaluations to estimate their properties’ prices, while buyers and investors use these evaluations to draft offers. Unlike manual property assessment, which compares just a small selection of factors, big data can help to achieve a more accurate valuation because it compares and analyzes thousands of listings with similar dynamics, features and customer preferences.
This allows realtors to determine the value of a property more precisely. Buyers and investors can then use these analyses and insights to make better offers. A report by McKinsey & Company indicates that big data models can predict rent figures with a 90% accuracy rate.
Competitor analysis
In any business or industry, you must know what your competitors’ strategies are and what they are doing. Evaluating the competition is paramount for any real estate business to improve its services, and big data analysis can be very helpful.
By leveraging big data, real estate businesses can analyze their major competitors to determine their strategies and the factors behind their success. With big data, they can gain insight into their competitors’ amenities, services, sales, rent prices, and marketing tactics to help them identify an appropriate value proposition and differentiate their products accordingly.
Risk mitigation
By leveraging big data, predictive analytics enables real estate businesses to assess and determine the age and condition of a property and obtain reliable data regarding the extent of renovations and redesigns that were previously carried out there.
These accurate metrics drawn from reliable real estate data enable realtors to identify issues, assess commercial viability, and reduce the unknowns regarding the property and its potential, effectively minimizing any risks for property buyers or investors. It also allows home buyers to determine whether a property is on a contested piece of land.