We are in the midst of an extraordinary sea change. Big data and the burgeoning field of data analytics are transforming how real estate is done.Big data assembles millions of data points, analyzes them and uses predictive analytics to translate that data into actionable steps for our clients and our businesses.The name of the game is user customization.My article last week, "The death of competitive market analyses as we know them," fired up the Inman readership. Comments questioned whether I had ever sold real estate (I've been a broker since 1982, and I've run the training for 4,000 agents), complained about the inaccuracy of algorithms, raised issues about whether appraisers would ever adjust and questioned the definition of "best" agents. Other commenters agreed with my assessment. Algorithms -- friend or foe? Granted, algorithms have their limitations, largely due to how statistics work; we can use statistics to illustrate what is happening at a macro level, but...
- User customization is the key to consumer-facing algorithms, but agents can use them to their advantage, too.
- According to Zillow, 47 percent of sellers reduce their price before selling, and they receive an average of 2 percent less.
- Overpriced property takes 113 days longer to sell on average, but customizable algorithms can help fight the overpricing plague.