“The use of industry data, as well as Google Trends, could help capture turning points in housing market trends,” says Sal Guatieri, senior economist at BMO Capital Markets.
“However, care would need to be taken to ensure the quality of the data, and that the information is representative of the housing market.”
Online real estate marketplace Auction.com, which received a $50 million investment from Google in March, has launched a service that uses Google’s big-data capabilities to predict home sales and other real estate trends in the U.S.
The new service, Auction.com Real Estate Nowcast, combines industry data, proprietary company transactional data and publicly available Google Trends data to predict real estate market trends as they are occurring.
Hal Varian, Google’s chief economist, who developed the data modeling, defines it as ‘nowcasting’ or ‘contemporaneous forecasting’.
“Google Trends data, which is anonymized, publicly available search information, offers valuable insights into current economic and consumer trends,” he says.
“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 behaviour in the present and for the coming months.”
Auction.com will issue its monthly Nowcast in the middle of each month, once analysis can be completed on early economic, industry and proprietary transactional data combined with related online search term activity that points towards home buying intent.
Rick Sharga, executive vice president at Auction.com, says: “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.
“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.”
Canadian agents would benefit from the kind of U.S. service now predicting property market trends in real-time, says one leading economist – but with one condition.