REAL ESTATE DATA OVER TIME

By W H Inmon

Once you have real estate data neatly tucked into a data base, there are no ends to the possibilities that can be done with the data. And in today’s world with Forest Rim Technologies textual ETL you can indeed create your own real estate data base.

One of the most important things that can be done with a real estate data base is to look at information over time. In doing so, long term trends can be identified and measured. And once you understand the long term trends, making buying and selling decisions becomes a snap.

Trends are kind of funny things. Looking at one transaction tells you nothing about a trend. And even looking a handful of transactions tells you very little. To find and understand a trend you need lots of points of data spread out over a lengthy period of time. When you have lots of data points and those points are spread out over time, it is then possible to start to detect trends.

Detecting trends is one thing. Measuring the strength and velocity of the trend is something else. It is careful creation and measurement of a real estate data base that allows the organization to fully explore and understand those trends.

When looking for trends, it is wise to gather as much information about the transaction as possible. The more diversity of information that can be gathered, the better. Gathering a wide diversity of information about the real estate transaction allows the analyst to be very discriminating in the analysis of real estate transactions.

The more diverse the information there is about a transaction allows the analyst the opportunity to subdivide the different transactions. And this subdivision of data sets the stage for an incisive analysis of the data. Trends tend to run along the lines of subdivisions of data.

Seemingly small pieces of information can become very important in subdividing the different types of real estate transactions. Of course, the sale price, the address, and the purchaser of a property are important. But other information can be just as important – how long the property has been listed, was the property repriced, how many offers were made of the property, what were the different appraisals, has the property been rezoned, and so forth. There are MANY factors that can prove to be useful when looking at data in a data base and trying to discern a trend.

When the real estate data base is built, it is wise to collect all information that is available, even if there is no apparent reason for the collection.

When looking at trends, it is always important to be aware of the axiom – the past is no predictor of the future. In many cases the past indeed is a good predictor of the future. But in other cases trends turn on a dime and the past activities only confuse and befuddle the prediction of future activities. The strength of a trend becomes as important as the trend itself.

There can be MANY factors that shape the trend, and many of those factors seem to be remote from the trend itself. External factors such as the economy, interest rates, politics, even technology all can have an indirect effect on real estate trends.

The factors that are important when doing trend investing for real estate include –

   The identification of the trend

   The identification of the factors that demark the subdivision the trend is in

   The length of time the trend has been apparent

   The velocity of the trend

In every case, a carefully prepared real estate data base sets the stage for finding and analyzing trends in the real estate marketplace.

Forest Rim Technology is a Bill Inmon company located in Denver, Colorado. Forest Rim has the technology needed to build a residential real estate data base. Bill can be reached at www.whinmon@msn.com.