Auction.com LLC, which got a $50 million investment from Google Inc. in March, said it will use the Internet-search company’s big-data capabilities to try to predict U.S. home sales and other trends ahead of competitors.
The new product, known as Auction.com Real Estate Nowcast, based on Google Trends information and other data, predicts that existing homes will sell at an annual pace of 5.18 million in October, according to a statement today. That estimate is ready about four weeks before the National Association of Realtors reports its seasonally adjusted annual sales rate, which was 5.17 million last month and 5.13 million in October 2013.
“It’s based on search activity right before they close on a house,” Rick Sharga, executive vice president at Irvine, California-based Auction.com, said in a telephone interview. “As we back-tested this against about 10 years of data, the results are pretty accurate.”
Real estate information companies such as Auction.com, Zillow Inc., CoreLogic Inc. and RealtyTrac are jockeying to harness technology to give individual and professional consumers a market edge. Auction.com uses Google Trends data to look at searches such as those for real estate agents, property listings, mortgage rates and home inspectors, Sharga said. It also uses results from its online auctions of commercial and residential real estate as well as publicly released housing- market data, he said.
“By layering industry-specific transactional data and subject-matter expertise over that search data, organizations such as Auction.com are able to create powerful predictive models for accurately forecasting buying behavior in the present and for the coming months,” Hal Varian, chief economist at Mountain View, California-based Google, said in the statement.
The National Association of Realtors relies on surveys of members to compile its monthly sales figures, slowing the release of results, Sharga said. The Realtors also report pending home sales, a leading indicator of transactions. Other companies, such as CoreLogic, rely on property-record filings, which take even longer, he said.
Auction.com plans to begin issuing its national Real Estate Nowcast in the middle of each month, with future reports breaking out sales and pricing data on a regional and local basis, Sharga said.
Google Trends, with data that go back to 2004, catalogs information on numerous searches for such topics as shoes, laptops and celebrities. Yesterday’s “hot searches” leader was an article about 1976 Olympic decathlon gold medalist Bruce Jenner’s pink nail polish. The Google data are anonymous and publicly available, according to Tim Drinan, a spokesman for the company.
Closely held Auction.com, which is valued at $1.2 billion, based on Google’s stake, also is working with the Internet company to develop mobile and Web applications and improve its search-engine optimization for marketing, Sharga said. Auction.com, the largest U.S. online real estate auction company, is on track to exceed last year’s sale of $7.4 billion of 35,000 commercial and residential properties, he said.
The real estate information industry is consolidating. In July, Seattle-based Zillow agreed to buy San Francisco-based Trulia Inc. for $3.5 billion, and last month Rupert Murdoch’s News Corp. made a deal to purchase Move Inc., the owner of Realtor.com, for $950 million.
Register or login for access to this item and much more
All Information Management content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access