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Using analytics to take the stress out of buying and selling a home

If you recently bought or sold a home, you probably did some form of rudimentary analytics to understand the best price and timing to buy or sell in a particular neighborhood.  For most, the typical process is to jump on different real estate sites and manually sift and sort through hundreds of individual listings.  Not only is the process time consuming and cumbersome, the analysis is typically very limited to a few specific neighborhoods and a very specific snapshot in time. This prevents us from seeing the whole market and making our own discoveries.

Zillow’s web site is loaded with statistics for home buyers and sellers across all markets in the US. Even better, Zillow let’s you download many different data sets at different levels of detail for you to do your own analysis. Using Analytics with SAP Analytics Cloud, you can easily bring insights into this data to ask-and-answer your toughest questions.

Let’s see what types of fun facts we can answer using this data…

1.  What’s the Overall Health of the Market?

If we look at the top 25 markets in the US, we can get a pretty good snapshot of the overall real estate market.

While this may be a bit of an eye chart, there are a few key outliers:

* San Francisco has the highest average home price, the least amount of inventory, and the least amount of people with negative equity in their homes.

* Chicago, on the other hand, has a lower than average home price, an above average inventory, and the highest percentage of negative equity.

Markets with a high sale price typically have lower inventory and since they’ve increased in value, owners have less negative equity in their homes.

 

2.  How Does the Real Estate Market Compare to Prior Years?

If we look at the entire US market, we can see that the average monthly sales have decreased by 5% in 2018.  The number of new listings has increased by 6%.

While sales are down, the average home price has increased by 7% ($225k) and the average days on the market has decreased by 8.5% (75 days).

Furthermore, the number of home listed that sold improved to 97.5% and the average price reduction decreased to 2.9%.

In short, while there are most listings on the market, home price are increasing, homes are selling faster, and the discounts are lower.

 

3.  Can we make any predictions off of this data?

While it’s nearly impossible to predict the market, we can certainly forecast these home prices into the future.  At its current pace and trend, home prices should continue to increase at around 5% per year.

 

4.  How does this look for different markets in the US?

The map below shows the average monthly sales by both state and county.  So we can see that Texas was the state with the most home sales and Washington DC was the city with the most home sales.

If pivot this to compare the average selling price with the total number of sales for the top US markets, we can see that Washington was the biggest outlier in terms of home sales, but San Jose had the highest average sale price.

5.  How do I analyze just my market?

If we drill into the greater Boston area, we can see that the most homes are sold in the north-west area of Boston and on the South Shore.  The bubble chart shows some of the outliers.  For example,

And if we drill into a specific county, we can see all of the individual details and listings.

 

What Does All of This Mean?

Data is everywhere and all around us.  But without analytics, data is just data.  Turning it into analytics with tools like SAP Analytics Cloud helps arms you with actionable information to make better and more informed decisions.  When buying or selling your next home, it can help you to find the best prices and timing.

 

 

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