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HouseCanary, Predictive Analytics and TEOTWAWKI

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&nbsBrian Boero’s Friday Flash today is particularly interesting. He talks about the growth of predictive analytics, and writes this:

It’s two years from now. Pretty much every agent in America has some sort of predictive analytics tool available to them, either through their broker, franchise, MLS or by buying it directly. They’re all looking at the same geographies with the same lens.

And you’re a homeowner that has been flagged as likely to move.

Hordes of agents have your address. Your phone number. Maybe your email address. The steady drip of agent postcards you got in the past will seem quaint compared to the, um, “focused” attention you’re getting now.

It sucks to be you.

He then mentions a company called HouseCanary:

HouseCanary, a startup backed by ex-Google CEO Eric Schmidt and former NBA star Kobe Bryant that claims to “see into the future of real estate”, closed a $33 million funding round back in January.

HouseCanary does pro-level real estate data analytics for investors, mortgage companies, appraisers and (at least in theory) real estate brokers and agents.

It’s heavy duty, big-brained stuff. Graduate level Zestimates. Predictive market forecasts.

It’s $1,000 per month for a “Pro” subscription, which, unfortunately, will probably be considered too expensive by most real estate brokerage companies. I wish this wasn’t the case. Brokers could benefit from tools like HouseCanary, which give them an opportunity to preserve their place as local market authorities.

In fact, a real estate brokerage could build an entire marketing campaign around the insights derived from an investment in high-end analytics.

I read that and thought, huh, TEOTWAWKI….

Why?

HouseCanary + Opendoor = ?

Maybe it wouldn’t suck that much to be the homeowner flagged as someone likely to sell. Because the hordes of real estate brokers and agents doing an entire marketing campaign “focused” on you based on high-end analytics can’t do the one thing the homeowner really wants: write a check. Opendoor and its competitors like OfferPad, Amne and zHome (and more soon to come!) can.

Who wins that fight for hearts and minds?

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

9 COMMENTS

  1. This sounds like advertising, but it actually is very relevant to the subject.

    We specialize in a certain kind of real estate. A couple of smart guys up in Canada created a tool that, like HouseCanary, identifies through math when a seller could become a client….I’m sure the tool is headed here shortly.
    Check it out: https://mountainmath.ca/teardowns

    Thanks ROB 🙂

      • Why buy the real estate that’s where all the risk is? I’d rather take a piece of the pie and move on. In certain sectors of the business i.e. the higher end, the less risky model (fee/commissions) can be quite close to the risker position of ownership/renovate/flip in terms of reward.

        Lots of way to skin this here cat 🙂

        Thanks,

      • ….and touching on the “we pay cash” model. The whole upper-end of the market consists of cash buyers that can close quickly etc. that leaves these firms without competitive advantage in that arena.

        So, it looks like the “we pay cash” model will be more utilized in the mid/lower end markets…..unfortunately, that’s where things get most dicey in a flat to down market…

        With all the others jumping in it looks like differentiation will be a sticking point as well….just say’in.

        My two cents.

        Thanks,

  2. Yes, the end as we know it is here,the RE biz is changing rapidly,all parts are declining Residential, Commercial etc.the political leadership of the last 40 years,with the accelerated process during the last 8 years destroyed the economy,and now RE Agents are scrambling to come up with solutions,.it’s a market, if the great jobs are not there? .Do you think the ex ceo of google and a former basketball player has the answer .????????, I dont.

    • VAREALESTATEBROKER – You are right again. So, some computer is going to analyze every real estate owner in America and tell their gullible brokers which ones are likely to sell. That’s a damned joke. “Send us your money and we will make you rich.” And, “I have a cousin in Nigeria who was head of the treasury and I will pay you 1/2 of the $20,000,000 if you help me get it out of the country.”
      And, then, I have some ocean front property in Arkansas… yada yada yada!

      • Let me digest this. Their computer is so smart, it can predict who will be getting a divorce, who will die, who will get a better job out of state, who will down size/upsize, who will lose their job?
        WOW! let me get in on this before…

      • Thanks Marvin,I would take you up on the oceanfront property in Arkansas, but ……… I live in
        the deepest,dirtiest swamp in the US its called Fairfax County VA.,which is about to be drained,these RE Establishment folks here haven’t figured out what they are facing ,the lousy mls that we are involved with, recently published an “analysis” from some PHD ,no less, about how wonderful our market it is, all lies, distortions etc.,fun and games ahead,Best!!!!

  3. Predictive analytics do one thing only. They distill down those who are “likely” to sell according to specific algorithms from the 129MM people that own homes they could one day decide to sell. I’m not sure how many others out there are suspicious of “black boxes” that are sold for their ability to predict the future. But I am. If your analytics are so accurate, then apply them and send me the names of people that have stated to you that they are ready to sell. Guaranteed leads. And then, and only then, I will pay you for the valued work you have done. But until that happens, simply get to know some people that own homes, let them know what you do and then be there when they want to sell or buy another. That is also a very advanced means in this industry to generate business. And better yet, it’s free.

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