You already know your life is afloat in algorithms.
Netflix recommends your next movie (because you have exhibited a pattern through your other “likes”), and Amazon recommends “a product we think you’ll like” based on their study of your past purchases. In Chapter 2 of Adapt, I outline how firms that scrutinize big data are using their talents to create never-before-seen insights into commercial real estate values and transactions.
Recently, I watched a demo of Reonomy’s latest features. When a subscriber starts to zero in on a particular location, they are offered data about the real estate and the owner and also a new “predictive” button: Click here to see the properties that are most likely to sell in this area.
How could they know that? It is simple but not easy. Once you examine dozens of data points about each past transaction, patterns will emerge. A prediction by Reonomy means that an algorithm has identified the properties that have attributes that have an above average correlation with past sales.
Why not try your hand at predictions?
If I asked you to list the next 50 sales to occur in your market, how would you go about that task?
You could use big data approach, or you could approximate the exercise. As an example, you might scroll through your database and pick out those buildings that have not sold in the last seven years, have recently had a major capital improvement, and were not refinanced in the last two years.
You could put this list in the jar on the shelf and pull it out in a year. What it you scored 23 out of 50? How would you improve your score next year?
For more, check out this AMA I did about marketing in the CRE industry.
Welcome to the world of algorithms.
The Future is Now!
