Analytics is a term that’s creating buzz in all industry types — from healthcare and retail to real estate. But what does it mean to the real estate agent in the field?
• Analytics provides real estate agents with the information they need to identify patterns and market trends, better understand changes in market demand, predict seasonal changes and ultimately identify areas that have the largest potential to become hot real estate markets.
• Real estate agents can improve their marketability by having quality data, manipulating that data in the right manner and by drawing the right conclusions.
Analytics expert Mark Thrasher said the first step is to understand what analytics is; then, to figure out how to use the information to your and your clients’ advantages.
Quality data is necessary
“For most businesses, analytics is the gathering and interpretation of data sets,” said Thrasher, senior manager of enterprise accounts at Metric Theory, a data-driven marketing company. “Businesses in the digital age have more data available to analyze than ever before, but what’s causing a growth in analytics is an awakening to the fact that this data can be used to solve real business questions in a scientific way.”
People in virtually every industry have access to digital information and should use it. The key is knowing how, Thrasher said. “I feel the key component to analysis is communicating the interpretation into meaningful takeaways,” Thrasher said.
“It’s great to have data that you can parse and play with, but the goal of any analysis should always be to inform solutions to questions you’re attempting to answer.”
Know how to manipulate it
Drilling down to real estate, specifically, analytics would arm real estate agents with the information they need to identify patterns and market trends, or to better understand changes in market demand, predict seasonal changes and ultimately identify areas that have the largest potential to become hot real estate markets.
Using data analysis to improve an agent’s service and marketability comes down to three components, according to Thrasher: having quality data, knowing how to manipulate it and drawing conclusions.
“The foundation to any data analysis is having quality data,” he said. “Utilizing a customer relationship management system is oftentimes a great place to build your data collection process, but keeping accurate data on a consistent basis is critical.”
Tools that many have at their fingertips can help. Google Analytics is an essential tool for collecting digital information and gathering web-based data. Developing the analytical skills comes once you have the data. Microsoft Excel is likely to offer the power and functionality needed to process the raw data and pull out meaningful patterns.
“There are tons of free services online that walk you through how to use Excel, but I always recommend learning pivot tables as one of the key analytical steps,” Thrasher said.
The last step is to draw conclusions to inform decision making.
“This is the hardest step to perfect and is what separates a good analysis from a great one,” Thrasher said. “Asking a question such as ‘What does this data actually say?’ is a great place to start.”
Other questions to ask: Does the analysis actually have statistical significance? Does the data show a trend that you could take advantage of in your decision making?
“Answering these questions will likely lead to more questions, but also to answers,” Thrasher said. “It’s easy to go down a rabbit hole, so you should have a goal of what question you are trying to answer during your analysis before you begin.”
Get more articles on how to use data analytics for your real estate business from OnCourse Learning Real Estate’s “Data Analytics in Real Estate Resource Guide.”