Big Data is the Biggest Gift to Real Estate Brokers in the Past Century
Big data is having a massive impact on the future of the real estate industry. Both real estate agents and clients need to prepare for the overwhelming changes that machine learning, predictive analytics and other big data technology will bring.
How Will Big Data Change the Future of Real Estate Sales?
Do you remember what it was like trying to buy a house before the days of online listings? If you were born after about 1980, you probably never experienced that. Big data has catapulted the real estate industry into a world where people can buy houses site-unseen and sign the paperwork without ever meeting in person.
And it’s only just beginning. 2019 is the beginning of an incredible era of mobile-centric technology, automation, smart tools, and other electronic marvels that make real estate transactions simple for everyone involved. Today’s tech has transformed the real estate industry, and it will continue to do so at an alarming speed.
The New Role of Real Estate Agents in a Big Data World
One of the most notable consequences of technology seeping into the real estate market is the transforming role of real estate agents. At one point, you couldn’t find a home and complete the transaction without a real estate agent. Big data is changing this for the better.
“Before the recession, agents were still marketing to other agents,” Brian Balduf, marketing pro for a real estate firm in Chicago told Yahoo! Finance. When your agent got in contact with another agent, they could swap house information, and you might find your dream home.
But now, real estate agents are required to have much stronger customer service skills than they needed before the start of the big data revolution.
“Now you have to market directly to consumers…With the market coming back, you’re seeking all kinds of new apps and technologies,” Balduff says, pointing out that real estate agents must now use a variety of tech tools to move their properties, including professional photos, video walkthroughs, compelling descriptions, and more.
Additionally, it’s becoming increasingly simpler to sell a home without a real estate agent, provided you choose the right big data tools. For sale by owner sales were once highly discouraged because it was nearly impossible to market a property without the network of realtors.
But social media, online listing services, and other digital marketing resources are available to all consumers. They all use machine learning to deliver the best possible service. Real estate agents are by no means obsolete, but they do have to work a little harder now to gather clientele.
It’s a different world out there for real estate agents, and those who want to stay competitive will have to adjust to meet modern trends.
Rent-estate is one of the biggest property investment opportunities of today. Millions of Americans are choosing to rent rather than buy because it’s a lower-risk commitment with potentially higher rewards.
As a result, real estate investors often turn to the rental market when investing in income properties. They can fill them easily using social media, online listing services, and word of mouth marketing.
According to Bungalow co-founder and CEO Andrew Collins, the rental sector is seeing changes due to big data and digital technology, but it’s at a slower pace.
“The way we buy and rent homes is still fundamentally the same as it always has been,” Collins said, as reported by Forbes. “This has a lot to do with the fact that real estate is such a capital-intensive industry. It’s much harder to remove friction from a process that’s much more complicated (and has bigger stakes) than, say, ride-sharing.”
He believes things will begin to evolve in the next decade or so, however, as big data becomes more impregnated into the industry.
“[Some] companies…are streamlining and digitizing the home-buying process in a way that we haven’t seen before, and [others are] …leveraging technology to eliminate nearly all of the headaches of the rental experience for both homeowners and renters,” Collins continues. “Residential real estate is going to catch up to other consumer experiences that we’ve become accustomed to in the 21st century, which is a good thing for all of us.”
Pretty soon, renting properties will be easier than ever, making income properties even more enticing to the real estate investor and encouraging a stronger market for those coming in.
According to Pam O’Connor, SCRP, Leading Real Estate Companies of the World, big data and other forms of technology may be one of the greatest assets of our day, but it can come at the cost of customer service.
“Technology is a tool; people are the priority,” she said to Kapre.com.
O’Connor, as well as other long-time realtors, have observed many real estate transactions in which the customer does not get first priority because big data tools make it so easy to minimize person-to-person interactions, but that makes it hard on those buying or selling.
These experienced realtors say that it’s important to use social media and other tech tools to their greatest advantage, but they should not be used to replace networking and face-to-face conversations. A focus on customer service will encourage success as a realtor better than anything else.
Ride-sharing, co-working spaces, and other shared services have finally leaked into the real estate sector, and TechCrunch argues that apartment sharing will be among the next frontier for real estate’s rapidly growing technology sector.
“Consumers aren’t just craving affordability, they’re also seeking company,” a TechCrunch article says, pointing out that more than half of Americans have experienced loneliness, and many of those who feel lonely are in their mid-twenties, the most likely bunch to rent an apartment.
Whether it’s a remote work environment or longer work hours, it’s difficult for some renters to build true connections. They’re seeking a community in apartment sharing, bringing about a new trend.
We’ve already seen a rise in community-building lodging through services like Airbnb, but TechCrunch believes that we will soon see more people seeking roommates when renting an apartment in order to build a community in their own homes.