DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1463705
68 Big Data has been a hot topic in marketing and business circles for the past 10 years, and real estate is no exception. e industry is seeing an escalating push to leverage market and sales data to automate the buying and selling of homes. Notable industry leaders have dipped their toes into the water and developed automated valuation models (AVMs) intended to inform pricing decisions. However, in the face of a global pandemic and an historic shortage of homes, even the most robust models are struggling, with Zillow going so far as to shutter its iBuying service late last year. At its core, real estate is a people business, not an algorithm. Just like people, houses are all individual, with unique value propositions. It takes human insight to understand each and assess a home's true value. While market data is incredibly important to support price decisioning, it's not the "be-all and end-all." e role of data and technology must supplement efficiency, not supplant or replace people. ere are many dangers in focusing solely on Big Data. BIG DATA REQUIRES BIG MONEY "Big data can help provide insights on thousands of comparable properties, instead of just a few, and can be harnessed to analyze market conditions and consumer profiles, among many other data sets, to establish property values more accurately," explains Jayesh Maganlal, Chief Information Officer, DAMAC Properties. However, true Big Data requires extraordinary volumes of information from a wide variety of data sources, which is very expensive from both a technology and a talent standpoint. Real estate just doesn't have the comprehensive arsenal of data available in other industries. Ours is limited in scope and transactional in nature. Artificial intelligence (AI) and machine learning (ML) routines require extraordinary input. If you don't feed the routines with massive information, the algorithms will bias to the data they do have, which can be quite dangerous. Without enough data to be statistically significant, models may provide false automated valuations that do not represent actual market values in a fast-paced and dynamic environment like the one we're currently experiencing. Feature By: Darren Bordeaux MAN VS. THE MACHINE: BIG DATA IN REAL ESTATE The role of data and technology must supplement efficiency, not supplant or replace people. There are many dangers in focusing solely on Big Data.