Housing reports are not generally known for their timeliness. Forecasts, indices and other indicators are typically based on data that is weeks, if not months, old. Online real estate marketplace Auction.com, with backing from Google, is looking to change that with the launch of its real estate “Nowcast.”
Nowcast combines industry data, proprietary company transactional data and Google Trends data to predict market trends accurately and in real time, Auction.com said. The report predicts real estate activity based on data modeling developed by Google Chief Economist Hal Varian.
“Google Trends data — which is anonymized, publicly available search information — offers valuable insights into current economic and consumer trends,” Varian said in a statement.
“By layering industry-specific transactional data and subject matter expertise over that search data, organizations such as Auction.com are able to create powerful predictive models for accurately forecasting buying behavior in the present and for the coming months.”
Auction.com CEO and co-founder Jeff Frieden said Nowcast was “a very tangible result of our strategic relationship with [Google’s equity fund,] Google Capital,” which invested $50 million in Auction.com earlier this year.
The first Nowcast predicts existing-home sales in October will come in at a seasonally adjusted annualized rate of 5.178 million, falling into a range between 4.967 and 5.38 million. That would be a slight increase from a year ago and flat from September.
Auction.com will issue its monthly Nowcast near the middle of each month and plans to add predictions for new-home sales and home pricing trends in addition to existing-home sales.
“Auction.com’s ability to deliver timely analysis of current market conditions can provide critical insight and enhanced predictability to industry professionals, economists and government entities alike,” said Rick Sharga, executive vice president for Auction.com, in a statement.
“Since real estate trends play such a vital role in our overall economy, there’s a compelling need for accurate, more timely housing market forecasts, rather than data that comes out two to four weeks later.”
Internal tests have shown “considerable accuracy” in terms of Auction.com’s ability to predict market performance, the company said.
|Month||Reported Existing Home Sales* (SAR in millions)||Auction.com Point Estimate (SAR in millions)||Auction.com Predicted Range (SAR in millions)|
|April 2014||4.660||4.831||4.643 – 5.020|
|May 2014||4.910||4.877||4.686 – 5.067|
|June 2014||5.030||5.082||4.884 – 5.281|
|July 2014||5.140||5.173||4.971 – 5.374|
|August 2014||5.050||5.232||5.028 – 5.436|
|September 2014||5.170||5.098||4.899 – 5.296|
*Source: National Association of Realtors