Gina asks, “I’m in real estate and 2021 promises to be a very data active year for real estate, based on the market rise in 2020 and an expected fall in 2021. Would love to hear how and where you gain data for study – is it just via NAR? Other sources?”
This is an important question because it’s not just the data itself that’s important – it’s also what we do with it. This kind of exploratory data analysis has three major components: the goal/requirements, the data, and the processing of it.
Can’t see anything? Watch it on YouTube here.
Listen to the audio here:
- Got a question for You Ask, I’ll Answer? Submit it here!
- Subscribe to my weekly newsletter for more useful marketing tips.
- Find older episodes of You Ask, I Answer on my YouTube channel.
- Need help with your company’s data and analytics? Let me know!
- Join my free Slack group for marketers interested in analytics!
What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for watching the video.
In today’s episode, Gina asks, I’m in real estate and 2021 promises to be a very data active year real estate based on the market rise in 2020.
And unexpected fall in 2021.
Would love to hear how and where you gain data for studies that justify things like National Association of Realtors or other sources.
So this is an important question, because not just about the data itself.
data by itself doesn’t really help us with anything.
And one of the things that we say a lot around the shop is data without decisions distraction, we need to understand what decisions are we trying to make for the individual real estate agent? It could be things like forecasting and what’s likely to happen to your business.
Is it a buyer’s market as a seller’s market what’s what’s likely to happen? For a firm like, say a Coldwell Banker, it could be macro economics, looking at the Market overall, what are the profitability? Is the market for the buyer or the seller? The individual homeowner? it’s things like probabilities, how easy will it be for me to sell a home or buy a home? will it cost me more or less.
And one of the challenges with real estate, in general, but in in data specifically, is that there’s a lot of data that goes into real estate.
So this is where you’re going to have an exploratory data analysis methodology that’s going to look at three major things, right? Number one, what’s the goal? Like, what is it what are you trying to prove? Or what do you find the research? Number two, what data do you need to prove that and then number three, what is the processing methodology, the algorithms you choose the tools, the techniques, the process that you go through to analyze the data, and it’s it’s gonna be an iterative process because there’s good chance that As you start digging further and further into all the different data that’s available, you’re gonna find a whole bunch of dead ends, you’re gonna find some things that don’t have even associations or correlations.
And so causation is unlikely.
And you may learn as you talk to people that there’s there’s some things that simply are unpredictable, they cannot be predicted.
So, let’s talk about the data itself.
Where would you go to get information like this, if you’re an agent, obviously, you have MLS, the Multiple Listing system that is probably going to be your best source of local data that you can find.
Some of that information does get bubbled up to two sites that have API’s like Zillow, for example, realtor.com and realtor.com just started sharing its data with the St.
Louis Federal Reserve Bank, their Fred database system which is really powerful because There’s about 200,000 other data sets in there that you can use to bring into your analysis.
So think about all the things that go into real estate, there is the home, right the value, the vocal market, price of the of the listing, how many other listings are around it, those are all things that you would get out of systems like MLS, for example.
Then there’s also the the economic aspects, what he has, for example, the mortgage rates 30 year fixed, 15 year fixed variable rate, etc.
Those rates can have a causal impact on the market.
If rates are low, people are more likely to buy because they can afford it.
If rates are high, that tends to cool things down.
So you’d want to find that data as well.
And that’s something that again, is available in the St.
Louis Federal Reserve Bank feeds.
Their Fred database is fantastic.
It’s one of the best sources for quantitative data, particularly anything economic the You can find, you’re going to look at things like okay in your area, then can you locate household income or real personal wages and stuff, all the things that would allow a person to buy a house? What effect do those have on the market? You’ll look at things like search data from places like Google and the SEO tools of your choice.
Those will help you understand where people’s heads are in the marketplace.
And you used to be able to forecast that from that data really well.
Since the pandemic started, that date has been all over the place, it’s been really messy.
And so much so that it’s not reliable for long term forecasts right now and probably won’t be for some time.
For example, I’m recording this on August 23.
It’s been about three weeks since government assistance stopped for employment share and stuff.
And so that is starting to have real ripple effects in the economy.
Depending on how long this goes on, you could have, you know, large scale bankruptcies, homelessness, all sorts of things that will that make forecasting the economic conditions, you know, any further up in a couple of weeks impossible.
There’s just too many balls in the air.
So those are cases where now we’re starting to get into the processing discussion.
What do we do with the data? Do we try to forecast? I would say no, but I would say any real estate agent or agency worth its salt should be pulling this data frequently.
And having near real time dashboards of what’s happening in your local market so that you can understand Oh, this is these are the conditions that are happening now.
And how they might impact sales, how they might impact listings, how they might impact people’s even willingness to consider selling, or buying a home property value prices.
One of the big question marks that’s going to happen at the state local levels in the next really two to five years, if not sooner, is what will municipalities have to do with taxes in order to make up for the huge shortfalls that they’re seeing everywhere, right.
And it becomes something of a vicious circle as people lose their homes, you have a smaller tax base, so you have to raise taxes on those people who are still able to pay taxes to finance your local government.
Again, these are all things that are very, very difficult to forecast.
But the very straightforward I want to say easy but very straightforward to pull in, near real time data.
And you can pull it in from the federal level, you can pull it in from the state level, depending on on your state, and how into the 21st century they are.
And all of that can be boiled down into things like dashboards and indicators that give you a sense of here’s what’s happening and give you a chance.
Two to four week horizon to look out and say, okay, job, unemployment rates in my region have gone up x percentage in the last two weeks that’s going to be a problem that’s gonna be a drag on the economy is gonna be a drag on home buying, be prepared for that and we’re working with sellers to say the sellers.
Look, don’t be too picky right now on the offer because the local economy is softening, right? Or conversely you could say, hey, things have really picked up.
It’s okay to be a little more choosy about your buyer.
Because there’s gonna be more buyers coming out of the woodwork if you see that happens.
So all of these processing aspects of the data are going to be really important.
Where do you get started with something like this? Start with a business requirements, right? What do you need to be able to do and then start looking for the data.
You don’t have to try and ingest everything all at once.
You probably shouldn’t.
But start trying to identify what are the key indicators that have driven Whatever KPI you’re you care about whether it’s home sales or price or whatever.
What are the drivers, the top two or three indicators that drive that that’s, you’ll be doing a regression analysis for that.
And then, based on that, start putting together your dashboards like maybe it is mortgage rates and local unemployment and recent sale prices.
If that combination of variables is the is the magic number that says this really strongly predicts your KPI.
That’s what you put on a dashboard.
That’s what you start to monitor and you keep an eye on it.
And you forecast as far as you can afford reliably, which again is like two to four weeks these days.
That’s a good place to start.
If you got a follow up questions, leave in the comments box below.
Subscribe to the YouTube channel on the newsletter, I’ll talk to you soon.
Take care, one help solving your company’s data analytics and digital marketing problems.
This is Trust insights.ai today and let us know how we can help you
You might also enjoy:
- It's Okay to Not Be Okay Right Now
- How to Set Your Public Speaking Fee
- Retiring Old Email Marketing Strategies
- The Basic Truth of Mental Health
- B2B Email Marketers: Stop Blocking Personal Emails
Want to read more like this from Christopher Penn? Get updates here:
Get your copy of AI For Marketers