Real Estate Weekly
Image default
Deals & Dealmakers Featured

Auction.com promises real-time CRE sales data based on Google searches

Auction.com, the Google-backed online real estate auction platform, has taken what it claims to be real-time data to the commercial real estate space, promising accurate information on pricing and sales volume weeks before reports from established outlets like the National Association of Realtors come out.

“It’s predicting what’s happening now,” said Auction.com Executive Vice President Rick Sharga. “What you have in most real estate reports is lagging data. It’s information that is reporting on sales that took place several months earlier. Since we’re doing online transactions every week, we actually have real-time transactional sales data at our disposal.”

The company’s new index, which it calls the Commercial Real Estate Nowcast, combines information from Auction.com transactions, Google search trends and survey data from people who are buying and selling commercial spaces.

The whole platform is based on research conducted by Google Chief Economist Hal Varian, who described the service as “contemporaneous forecasting.” To gather data, Auction.com analyzed 1,000 Google search terms that signal pricing trends in commercial real estate. Then, it collected pricing information from its own commercial real estate auctions, taking into account the price of the winning bid, the number of bidders and the “intensity” of bidding. The final step in the process is surveying buyers and sellers, which the company conducts with the help of data and analytics firm Situs RERC.

A homes sales version of the report, called the Real Estate Nowcast, was launched in October of last year, and has so far been hitting its mark. “We’ve been on target every month with price estimates. There’s a little less variability in pricing than there is in sales volume so we’ve been more successful in predicting that,” Sharga said.

Since the service was launched, the Nowcast has accurately predicted the direction of home sales. In its October report, Auction.com set the range for home prices at $214,269 and $236,824. The NAR report set the median price for existing homes at $219,600.

The October Nowcast data also successfully estimated sales volume. Last month, the NAR data showed existing home sales at 5.36 million units. This fell within the Nowcast range of 5.26 million to 5.51 million.

The NAR declined to comment on the Nowcast numbers, saying that it is against their policy to comment on the activities of other organizations. However, they said that working with a realtor is still the best way to get information on fresh listings, price changes and recent closings.

In spite of hitting its numbers with home sales, Sharga said that Auction.com still needs to convince insiders in the commercial real estate industry. “Everybody’s skeptical about data if it’s not their data, right?” he said. “We think its credibility will prove itself over time. But if people want to be skeptical about it, that’s certainly their right.”

In attempting to make the index more accurate, the company created a basis point by tracing back data to January 2011. The firm also compared its data with other commercial indices, matching numbers from four years ago to the present. “It’s been very consistent across those lines for that whole period,” he said.

In spite of the considerable resources that Auction.com has directed towards its Nowcast service, Sharga said that his company’s focus remains the same. “We’re not looking at this as a profit center. We’re not trying to become a data company. It’s a tool that, if you’re an analyst working for a building owner or operator, or if you’re a broker looking for trend information to help guide your clients whether it’s a good time to buy or sell in a market sector and in a certain geography, we want to be able to give you this data to help you make that decision,” he said.

Auction.com will release the CRE Nowcast report every month. According to Sharga, they are now working on an interactive tool that would provide up-to-the-minute data rather than on a monthly basis.

(Visited 1 times, 1 visits today)

Related posts

Howard Hughes unveils twin tower plan for 250 Water Street

REW

Fashion co. emerges from bankruptcy with 200,000 s/f Empire State Building lease

REW

New Yorkers stand up to be counted

REW