It is no news that big data is radically changing almost all business processes. With the advent of new technology, bigger amounts of data are gathered more effectively than ever before ―and companies must take advantage of it. This dynamic is changing established ways of working within real estate. For instance, transaction data used in analysis is actually only days or weeks old, and investors first review property shortlists based on particular requirements. More insight facilitates informed real estate decisions, which were always relevant to our industry, but now the possibilities are endless.
Instead of relying on manually collected information, mathematical models can be applied to big data, allowing the commercial real estate industry to assess and perform on information in ways that were unthinkable in the past in terms of volume, timing and accuracy. Market transparency is also a clear advantage of this process.
Not so fast, my friend
As promising as the new paradigm may seem, there are several challenges to overcome. Mobile devices and emerging communication technologies have resulted in major amounts of data which are not so easy to process. In addition, all business sectors are interested in leveraging these possibilities, thus it is crucial to separate the wheat from the chaff. Getting good quality data is the first step; then the right algorithms and visualisations are required to pinpoint patterns and draw out the insights. This could translate into real estate websites that provide clear information on current prices, buying and selling trends, and neighbourhood characteristics, such as traffic level and demographics.
Generating the right insights also requires specialist skills. Data Science and Analytics job listings are exponentially growing all over the world and this demand has certainly come to stay. These sensitive positions are essential, since they are in charge of technical challenges in terms of processing and storing all the new data coming in from potentially billions of sensors, social and ethical implications to avoid bias, and privacy concerns to use data responsibly as it becomes an increasingly embedded part of real estate business processes.
Virtual information, tangible benefits
In commercial real estate, new models are considering a wider range of factors than before, such as local air quality or popular commuting routes. Retailers, particularly, want to know the location of their competitors, the economic and social profile of people visiting a certain area and relevant community behaviour related to economic transactions in those spaces. Today’s models allow for greater precision and customization pursuant to different requirements. It is even possible to thoroughly understand an area without even setting foot on it.
Just as it has happened with many new technologies in the past, big data is becoming the norm in all companies, and those which are not able to embrace it will simply cease to exist sooner or later.
What does the future present hold? Attracting high-quality data scientists and developing fresh algorithms that can provide top quality insights remains a priority for real estate. Asking the right questions through the right tools and support, could lead to new answers, allowing us to advise clients with more accuracy or make decisions with more background information than ever before. The possibilities are endless.
