Never before has so much data about commercial and residential real estate been available, presenting unprecedented opportunity for the development of models to make all that data pay off for investors.
The MIT Center for Real Estate (CRE) launched its Real Estate Price Dynamics Research Platform (REPD Platform) to “explore models and analytics that can lay the foundation for providing real-world solutions,” according to its website.
The digital revolution has produced a universe of relevant data for aggregators to provide to actionable information to investors in all types of real estate.
The study of real estate has progressed slowly, due in large part to variances in market locations. Property prices are closely tied to local markets, making the task of gathering all the necessary data nearly impossible until very recently. Prices even vary within markets, so any system has to be extremely agile. Price indexing is in any facet of real estate is complex, to say the least.
Although the primary focus of the REPD Platform is currently on commercial property asset prices, related subjects are being explored, such as rents and space market dynamics, with the platform already being used to study office markets in India, according to the website.
As an educational institution, MIT’s focus is not on economic profit, but rather serving as a “bridge between pioneering academic research and industry practice.”
The profitable application of this research, and other related research, is left to the entrepreneurs in the “proptech” space, like Gary Beasley of Roofstock. In October, Roofstock announced the industry’s first-ever single-family rental ratings index for U.S. neighborhoods, powered by a “proprietary algorithm that assesses neighborhood-specific risk.” The Roofstock Neighborhood Rating normalizes neighborhood data across markets, enabling buyers to easily compare rental properties on an even footing and make informed decisions, according to HousingWire, which named Roofstock as one of its Tech 100 winners for 2018.
The company looked at 72,000 U.S. census tracts, each composed of about 1,500 homes, to derive the Roofstock Neighborhood Rating algorithm, providing an even playing field for the comparison of one piece of real estate to another, based on dozens of factors. HousingWire called Roofstock is one of the fastest-growing fintech startups in the U.S. In addition to surpassing $1 billion in transactions, the company “more than doubled the number of new market launches in 2017 year over year and grew its workforce by more than 200%.”
At the top of the go-to list for many seeking data in the proptech field is AATTOM, which developed and brought to market “two key technologies that provide clients with more flexible and scalable options for data delivery and data management: a cloud-based property data API and property data-as-a-service (DaaS),” according to HousingWire. ATTOM’s cloud-based API delivery lets clients to create a custom data set from the more than 1,000 property data elements, and allows them to stream it on demand, rather than having to store it. We use ATTOM data as we monitor real estate and property assets for weather damage, specifically, hail weather damage.
The discovery and sorting of data is transforming the real estate industry, as it is many others. Less precise methods of decision-making are falling away, as ground truth improves the way we live.