Invest & Finance

Data & Valuation

The emergence of artificial intelligence technology is enabling traditional industries to enhance profitability and make exponentially smarter decisions based on data-generated insights. Real estate is no exception to this, taking advantage of these advancements using data to source and value properties, identify opportunities and make better informed decisions. Now, information such as transaction data, valuable intelligence on market pricing, capital flows and investment trends are available at the click of a button.

Residential Real Estate

In the residential market, the use of automatic valuation models (AVMs) have been around for some time, mathematical models combined with big data which provide an estimated value of a home. Zillow’s “Zestimate” is a well-known tool, using data largely based on public records combined with user submitted data and computer-based algorithms. These estimates however do not tend to be very accurate and are not an official appraisal, so startups are now taking AVMs one step further.

Using AI, Geo-Statistics & Big-Data, thousands of parameters can be considered, both internal and external (spatial) to the property, producing timely, accurate and non-biased valuations. ValueHut’s tech for example considers all these parameters coupled with detailed analyses of the main factors affecting the price to provide detailed valuations of residential properties.

Commercial Real Estate

Commercial real estate has been relatively slower to adopt the benefits of tech in valuation. Investors typically do a lot of manual due diligence including visiting a property in person and all data and analysis is done in excel. Recognizing the opportunities tech can provide, companies such as Skyline AI are trying to gather every piece of information possible that might affect commercial property values such as demographics and crime, restaurants in the area as well as more macro data from the Treasury Department. Properties are typically only appraised once or twice a year but with this level of data, every time something changes around an asset, the appraisal is updated immediately.