In a connected world, gathering and collecting data has become an increasingly simpler task. Compiling that data and using it to create accurate or actionable analyses, however, continues to remain a bigger challenge. A challenge that advancements in AI and machine learning are slowly conquering. Big data is changing almost every industry and aspect of life, including real estate. Here are three ways that Big Data is impacting real estate.
At one time, it may have taken home buyers anywhere from 6 months to a year to find and close on a home. Today, between shopping for a home and a mortgage online to electronic filing and signing of documents, it takes homebuyers an average of just 50 days to find and close on a home. Commercial real estate is also moving at a much quicker pace, with big data giving potential buyers or lessors access to much more information in order to make faster decisions.
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The price of real estate has always depended highly on comps, where agents use the price of a comparable piece of real estate to determine the asking or offering price of another. Needless to say, however, there can be a vast difference between one three-bedroom, two-bath house and another even when the square footage is roughly the same. When it comes to commercial real estate, the differences between one property and another can be even more staggering. Big data, however, can compare dozens of different features that are harder to calculate such as lot size, area population growth, walking score or access to schools and transportation to come up with a more fair and reasonable price than just what another similar property recently sold for.
Real estate is a big investment. For some people, it is the biggest investment they will ever make. Once you buy or rent a home, building or office space, you are generally stuck for at least a year or more. Constantly changing markets may mean you can get stuck with a property for a decade or more before being able to get out of it what you put into it. Better data and predictive analytics are decreasing that risk.