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USA Real Estate Blog

Update on big data, legal issues, more

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HOLLYWOOD, Fla. – Aug. 28, 2018 – Looking to the future, real estate brokers should get ready for the ways – good and bad – that big data can impact their business, Dr. Jen Golbeck told about 175 Realtors attending Tuesday’s Broker’s Edge event created by the National Association of Realtors® (NAR) in partnership with Florida Realtors® and held at the Diplomat Resort & Spa in Hollywood, Fla.

“The important lesson I want you as Realtors to take from today is that artificial intelligence (AI) is never going to replace someone like you,” said Golbeck, director of the Social Intelligence Lab at the University of Maryland in College Park, Md. “AI should never replace humans in a field where trust and decision-making is so important, and that’s what you bring to your clients every day.”

She told the audience that she’s looking forward to becoming a half-time Floridian soon, as she is buying a house in Key West, adding that “I’m a computer scientist, a millennial and a nerd – and I would never use AI for my Realtor. My Realtor has become my friend and my go-to person for advice and help.”

Algorithms can collect data from all kinds of sources, such as retail purchases, Facebook likes, social media profiles, online surveys and more. That data can then be combined in different ways to reveal customer insights, predict patterns of behavior and more. For those in the real estate field, big data can look at who might be ready to buy a house soon, for example, or determine if someone is ready to downsize and put their house on the market.

“This only works if I have access to data about you – but you can’t hide from (information gathering) and you don’t know what a combination of things will tell about you,” Golbeck said. “We’re even getting better about predicting things that will be true about you in the future. It’s a little creepy.”

How does this impact brokers and Realtors?

“You work in a field where trust is crucial,” she said. “If people don’t feel they can trust you, they won’t work with you. People don’t want to feel manipulated. Two things to keep in mind when using big data are consent and transparency. Are you OK with people knowing that you have this data and that you’re using it?

“Most of this technology we build because it’s helpful to people – think of how Amazon and Netflix use data to offer you recommendations – but it’s not perfect. That’s why we need trusted advisors, like you, to help us interpret the data from all these algorithms.”

Some takeaways from Broker’s Edge sessions

Marketing teams: “I’m a big fan of building a brand as a team and marketing that brand through social media and other channels,” said Jorge Guerra, Jr., president and CEO, Real Estate Sales Force. “For the most part, people who are happy to be on a team are happy to be a part of that kind of promotion.”

Culture and office operations: Have you ever had a team get so big that they tried to take over? “Yes, it’s why I set my rule, that I want my teams to have no more than 25 percent of the revenue or business from any office they are in,” said Cynthia DeLuca, director of education, ERA Grizzard Real Estate. “I woke up one morning and realized that I was building out something in the office for a particular team, and it was 2009 – which was not the time to do that – so I realized I needed to take the reins back.”

Legal update: Katie Johnson, NAR general counsel and senior VP, law, policy and leadership development: “Reduce your risk of copyright infringement – own it. Obtain ownership or permission for photos. If you use a professional photographer to take your listing photos, what does your agreement say?

“Understand the warranties and representations that you make. Those warranties and representations can come back to financially harm you if you didn’t have ownership or the proper permissions for those photos. And finally, comply with DMCA (Digital Millennium Copyright Act) Safe Harbor.”

Margy Grant, Florida Realtors chief operations officer and general counsel: “This is low hanging fruit, guys; it’s way too easy to sue for copyright infringement. Word is not getting around to your agents about this. If you are using a photo without copyright or permission, you are liable. Simple as that.”

Housing market driving factors

Dr. Paul Bishop, NAR vice president, research: “The U.S. economy is doing well and that’s a big driver for the housing market. The economic expansion we’re experiencing is the second longest on record. Wage growth has been a puzzle: It’s been OK, but not great. Workers are finally earning a bit more, but it certainly hasn’t kept up with seven years of employment growth.

The third biggest factor in the housing market in terms of the economy is how many households are being formed. The number of households now being created is back to above the one million mark per year – and that’s finally consistent with what we’ve seen previously (prior to the Great Recession). Months’ supply (inventory) may be stabilizing after a long stretch of year-over-year declines. We’ll be watching that metric closely over the next few months to see if that stabilization continues.”

Dr. Brad O’Connor, Florida Realtors chief economist: “Much of our housing activity in Florida is not driven by owner-occupants; we also have investors, second homes and foreign buyers, which can put pressure on our markets, especially those areas with not a lot of owner-occupants. While our population is growing, the rate of growth isn’t quite back to what it was (before the Great Recession), but we are now the third most populous state – sorry New York.

“Florida employment growth is actually doing even better than the national level, and it’s not just retail or service sector jobs, but also professional services and jobs that pay more. But we’re not actually gaining or catching up with wage growth.

“The Florida home sales forecast for this year should be relatively flat again with about a one percent growth in sales. Home sales are definitely going to be up in September because of Hurricane Irma last year unless we see another hurricane.

“We’re not seeing enough starter homes in our inventory. Inventory (months’ supply) in Florida is hovering around three months for single-family homes and around five months for condo-townhouse properties.”

© 2018 Florida Realtors®  

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