Thanks to technology, businesses in every industry are inundated with countless amounts of data, so much so that many don't fully understand how to make sense of it all. Data provides us with a blueprint of the past, but in reality, it can be even more transformative; these heaps of information can be harnessed to help predict the future, like a mysterious crystal ball leading you directly to success. If predictive analytics aren’t a part of your business plan, you may want to replan.
As with every other facet of business, money is always on the line. Thanks to better storage solutions and cheaper hardware, more and more organizations are using predictive analytics to increase bottom lines while also using them as a competitive differentiator. But stepping back to see a bigger picture, predictive analytics can do so much more than determine where a market is heading: it can detect fraud and other financial abnormalities, help reduce risks via credit score generation, optimize a company’s marketing campaigns to help it foresee consumer responses, and improve internal operations (think, hotels, high-end restaurants and the like).
But predictive analytics are hardly a new fad; industries in the know have been taking advantage of this high-level data manipulation for years. The financial industry and health insurance industry use these analytics for their fraud detection and risk monitoring purposes, while utility companies and manufacturers use them to help pinpoint at-risk equipment before it fails, alleviating safety and liability concerns. Even governments understand the power that predictive analytics can have, analyzing data to help make sense of population trends so they can plan for the world’s future.
According to an Accenture survey, the use of forward-looking data analysis has tripled since 2009, with companies using analytics practices “that anticipate tomorrow rather than explain yesterday.” Sound complicated? Unsure whether you can sink more resources into data scrounging? Think again. As Forbes explained, “It’s not about finding new raw data, but about using data differently.”
Real estate, like any other industry, can also profit from predictive analytics. As per TDWI Research, the top five reasons why companies want to use predictive analytics are to predict trends, understand customers, improve business performance, drive strategic decision-making, and predict behavior. In addition, companies want to be able to answer their clients’ difficult questions and be able to tell what type of client would be likely to buy a specific product. All of these goals are directly applicable to the life of an agent or broker, so for real estate, the benefits are many.
One real estate analytics company, HouseCanary, is providing and analyzing real estate data for brokers and agents to use in many of the aforementioned ways. Comprised of a team of real estate strategists, statisticians, software engineers and designers, HouseCanary provides trends, insights and indices for nearly every MSA, zip code and block in the country today and three years into the future, helping businesses of all sizes understand different real estate markets and modernize how they make investment and lending decisions. With 18,000 accurately valued residential markets and 100 million properties, HouseCanary is arming agents and brokers with information at a time when homebuyers and sellers are increasingly starved for accurate and reliable data related to their real estate transactions.
In collaboration with HouseCanary, RISMedia recently launched a new weekly e-newsletter, "Real Estate Market Update & Neighborhood Report," which brings both HouseCanary's local market housing analytics data sets and RISMedia's industry news and insights to millions of agents in thousands of U.S. markets. The information is offered as a new way for agents to enhance their value proposition to clients, as well as augment and enhance their other data sources, like their MLS.
“The use and potential impact of predictive analytics in the real estate industry could be transformational,” said John Featherston, CEO and Publisher of RISMedia. “Consumers today are more sophisticated than ever before and have an unparalleled thirst for information, especially as it relates to their homeownership goals and objectives.”
The new e-pub is derived from HouseCanary’s data infrastructure, which aggregates thousands of data elements from a broad set of data sources tracking the most specific details about a given property, the broadest macroeconomic factors, and everything in between. The newsletter will also include timely and relevant local, regional and national real estate news and information from RISMedia. With these combined assets, real estate professionals will be more than just knowledgeable; they will, themselves, be predictive—which is exactly what consumers expect and demand.
“What HouseCanary is doing is something I’ve never seen before,” says Arrian Binnings, a REALTOR® with Pacific Union Real Estate in San Francisco, Calif. “They’re adding a lot of value to my daily work of being able to use data for market projections. On an individual property level, having a source where I can pull data and look at not just data about the property, but projections and forecasts for the market area, in addition to zip code- and census-level data, is truly unique."
For industries far and wide, real estate and otherwise, having record of the past is good and fine, but the savviest industries of today know that looking forward is truly the way to get ahead. Start gazing into that crystal ball because with predictive analytics, your business may undergo a metamorphosis.
Would you like to receive RISMedia's new weekly e-pub, Real Estate Market Update & Neighborhood report? Send us an email request to email@example.com and please include your zip code to receive your market's localized reports.
Additional reporting by Beth McGuire and Paige Tepping