It’s easy to track prices of some things: Drive down any major street and you’ll only have to pass a few gas stations to know roughly how much gasoline costs in your area. Turn on the news during the workday, and you’ll quickly learn how the big stock market indexes are faring. Go shopping every week, and you’ll soon know how much bananas or eggs cost at your local supermarket.
Real estate is more complicated, partly because so many uncertain factors go into determining prices. Buying or selling a house always involves a bit of gambling on pricing and transaction time, and plenty of rental lease signings can end with both landlord and tenant wondering whether they got the best deal for their money. No two buildings are exactly alike, and you can’t fully predict what’s coming on the market tomorrow, nor can you predict how long a new roof will last or how neighborhoods will shift in desirability over time. And traditionally, shopping for real estate to live in or hold as an investment meant working with experienced brokers or relying on your own knowledge of properties in your area.
But recently, a number of startups and more established financial data firms are collecting troves of information to bring a more data-driven approach to real estate markets, including for apartment buildings and standalone homes. It’s a change that’s helping to reshape the markets, bringing new investors into the field and letting landlords expand into new territory.
“If you think about 20 years ago, it was a very opaque market,” says Marc Rutzen, CEO of Enodo, a Chicago-based company that uses AI to help investors find and evaluate real estate deals. “There were no data providers in real estate. You knew your local market by talking to people.”
Among the businesses in the residential data market are companies aimed at helping buyers price properties in new markets, telling owners how their properties’ values are shifting, and even telling landlords how best to set rents on vacant units on a day-to-day basis.
“Revenue optimization is huge in our industry right now,” says Stephanie Anderson, manager of industry operations at the National Apartment Association, a rental industry group. “They looked at areas like airlines and hotels, for instance, and how their prices change every single day based on supply and demand.”
The NAA’s most recent conference, which the group says saw more than 10,000 attendees in Denver this June, hosted numerous exhibits by data providers (along with an appearance by actor-comedian Mindy Kaling).
