Historically, real estate has lagged behind other industries in embracing innovation. However, a big shift is happening in this industry, with investments in real estate tech rising.
This from McKinsey & Company couldn’t be worded better!
“Let’s say you are a developer who wants to identify underused but high-value parcels zoned for development. Data sources on previous transactions, such as the Multiple Listing Service, exist and are widely established as the traditional cornerstone of information on both residential and commercial real estate assets. However, these databases have limited value for anticipating future potential, not having been designed for that purpose.
Advanced analytics can quickly identify areas of focus, then assess the potential of a given parcel with a predictive lens. A developer can thus quickly access hyperlocal community data, paired with land use data and market forecasts, and select the most relevant neighborhoods and type of buildings for development. Further, that developer can optimize development timing, mix of property uses, and price segmentation to maximize value.”
Within the coming years, we predict a shift away from developers making investment decisions by analyzing traditional data such as occupancy rates or property prices and combining it with their personal intuition. Going forward, the omnipresence of digital devices and improvements in big data analytics are making an ever-growing amount of previously non-existent data available to developers, enabling them to gain better insights.