How Predictive Analytics can change Real Estate

Industry: Real Estate

Introduction

If the U.S. economy is to hit escape velocity in 2017, you can expect the #RealEstate sector to serve as its rocket fuel. At its most broadly defined, housing can be counted on to compose 15% of GDP.

Predictive analytics or evaluating and interpreting data to predict future outcomes and trends will help the real estate industry better understand transaction and market data and use it to benefit the industry, agents and consumers.

Understanding the customer is the key to define market segmentation and will have an immediate impact on direct marketing and customer relationship management.

To cut long story short, this means Big Revenue for #RealEstate Companies.

Project Journey

To address the problem, Abzooba with its extensive expertise in data science and machine learning, created a customized solution for the problem.

Objectives

  • To convert raw real estate data into a visual and interactive intelligence experience that enables informed decision making in an otherwise fragmented and opaque market.
  • To identify customer segments, patterns and repeat purchases so that it helps the Real Estate Company to take informed and right decisions.
  • To start with, we had access to the following data.
    • Customer Demographic data
    • Real Estate Transaction data

Approach Overview

The following are the steps Abzooba took to solve the problem.

  • Exploratory Data Analysis – Deep dive into various aspects of data using complex visualizations to identify hidden patterns.
  • Repeat Purchase Analysis and Customer Segmentation – Repeat Purchase Analysis and characterization of underlying segments. Deep dive in Repeat purchase patterns and customer segmentation based on various attributes such as demographics and past transactions.
  • Purchase model – A probabilistic model to predict if a customer, given his/her demographics and transaction details, will buy a property or not.

Business Benefits

Identification of various customer segments leads to better understanding of the business as well as customers. Eventually increasing revenue/decreasing costs.

  • Identification of ‘Growth segments’ to further drive revenues aggressively.
  • Repeat Purchase analysis helps in understanding the key patterns of a customer and drives cross-sell and up-sell opportunities. Thereby increasing revenue per customer.
  • Purchase model can accurately predict with 93-95% accuracy if a person will buy a property. This leads to more concentrated and directed marketing efforts.