Only a short time ago, finding the right home was almost entirely dependent on the local real estate agent. After finding out what you were looking for, they’d even drive you from property to property, personally showing you through the various options.
In those days, there wasn’t any centralised collection of real estate data that was publicly accessible – buyers would have to rely on their agent’s advice as to what was a fair price. With agents holding so much power and the corresponding potential to mislead, it’s no wonder the industry developed a poor reputation.
Over the past two decades, the world has become a radically different place, particularly in the property market. In this age of information, the customer is empowered with a host of data. Buyers can find out about recent sales nearby and easily get average and median prices for property types in different areas. They can even get free estimates of what a particular property might be worth – all from a few clicks on a personal device.
Up until now, all of this data has been just that – straight numbers. But there’s something else just around the corner that’s about to have a profound effect on property markets around the world. There are new tools currently being developed that as well as data, evaluate the soft factors relating to property.
Things like affordability, commute times, traffic conditions, demographics, schools, proximity to facilities – all the elements that affect lifestyle. It’s called data analytics, describing the process of sorting through all the thousands of pieces of data to find the property that best suits a particular individual’s needs and wants.
While applications such as Inrix and Waze are already helping Americans assess likely commute times, there are separate permutations that will allow a buyer to review what sorts of risks might be attached to the property. Housefax.com allows buyers to see if a home has been effected by a flood, fire, earthquake, mould or other insurance claim, whether the property or a nearby one has ever been a meth lab – even what sort of natural hazards might exist in the area.
In a perfect world, a buyer would be able to use evolving technology to analyse the data and consider opportunity costs. For example, what is the trade-off between an older property or new? Inner city or outer suburbs? What suburbs are affordable within a certain commute time? This is not just a pipe dream.
A new application of homejunction.com is already providing much of this information for American brokers and agents and there’s no doubt similar apps are in the works here in Australia. Buyers are already more empowered than they’ve ever been and that trend is only going to continue.
What’s yet to be seen is what effect that will have on domestic the real estate industry as a whole. The question for every agent today is – in the face of this change, can you stay relevant?