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Real Estate Big Data

Why brokers and agents must understand real estate data standards

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real estate data standards

If you have never thought about how important data standards in the real estate industry are, here are some questions for you:

  • Have you ever been able to list and sell a home while typing the listing address (and other information) less than a dozen times?
  • Have you ever made the transition to a new MLS system only to have to set up all of your prospects all over again?
  • Why can’t you have someone build you a mobile app that leverages all the information in the MLS – listings, clients, saved searches, financial worksheets, etc.?
  • If you belong to more than one MLS, why do you have to enter the listing into each system separately?

Most brokers and agents just assume that the situations described above are just “how things are,” and that there’s no way to make things better. They are wrong. Believe it or not, brokers and agents can play a part in making things better. It all comes back to understanding how real estate data standards work.

Real Estate Data Standards

Data standards define a uniform technical method of moving information between computer systems. In the real estate industry, this standard is called RETS (the Real Estate Transaction Standard) and is managed by an organization called RESO (the Real Estate Standards Organization).

RETS has been under development since 1999. It isn’t even close to “done” because for most of those years no one was managing the process, and RETS development was driven almost entirely by the part-time effort of volunteers such as myself.

It is only in recent years that RESO was formed and professional project management was put in place to manage the volunteer effort. This has radically accelerated RETS standards development; if the industry puts more funding into RESO, it may be possible to hire more staff to make the process go even faster.

The Current State of Real Estate Data Standards

Most real estate systems “speak” a version of RETS that is only capable of moving listing information and MLS subscriber information. This makes it impossible to move some of the information types, such as your prospects’ information, described earlier.

Adding to the problem, there are over 850 MLSs in the U.S. and Canada today, and each has its own unique data fields. For example, Hawaiian MLSs have “lanais.” Moreover, each MLS has unique ways of describing fields that are common to all MLSs. For example, one MLS might have “ListingContractDate”, and others might have ListingDate, DateOfListing, ListDate, ListingContractDate, or AgreementDate. Some MLSs will even have entirely different ways to describe the same thing. Imagine one MLS describing tree coverage as light, medium or heavy wooded, and another describing it in terms of % coverage. There are hundreds of similar examples. All of this makes it challenging for someone who wants to write one program or create one website to use data from multiple MLSs.

While many people in the industry are frustrated that RETS isn’t further along, keep in mind that when it comes to web standards, it took the Web standards organization (the W3C) more than 10 years to release a new version of HTML (version 5). RETS has come a long way in that same timeframe. Still, it’s okay to want RETS to move faster and fulfill its promise, solving the kinds of issues described earlier in this article.

Standards Adoption is Key

Thankfully, RESO volunteers are working to solve the problems described above. The new “data dictionary” provides standardized ways to refer to data covering a wide variety of data types: property (including media and listing history), membership, office, contacts, saved searches and open houses. That’s not every type of data one might want to move from system to system, but it’s getting there.

BUT, while the improved standards have been created, they haven’t been adopted by MLSs and other tech companies.

What Can YOU Do About It?

You can make sure your MLSs and other software providers know that you understand about data standards and you want them to make standards adoption – and integrations based on them – a priority. By telling them so, you can get all the benefits of the rapidly evolving standards.

Some MLSs might say, “We’re dependent on our MLS software vendor to do that for us,” and they are telling the truth there. Nonetheless, the vendors won’t move faster until their MLS customers tell them it’s a priority, and your local MLS won’t do that until its subscribers tell it in turn that standards are a priority. So again, it comes back to you.

Also, if you have a bit of technical skill or even just knowledge of the data, you can get involved with RESO to add your efforts to that of other volunteers’. And, if you have some financial resources, you can join RESO as a member (as I have, putting my money where my mouth is).

For more information about real estate data standards, visit reso.org.

Matt Cohen has been with Clareity Consulting for over 17 years, consulting for many of the real estate industry’s top Associations, MLSs, franchises, large brokerages and technology companies. Many clients look to Matt for help with system selection and negotiation. Technology providers look to Matt for assistance with product planning, software design, quality assurance, usability, and information security assessments. Matt has spoken at many industry events, has been published as an author in Stefan Swanepoel’s “Trends” report and many other publications, and has been honored by Inman News, being listed as one of the 100 Most Influential Real Estate Leaders.

Real Estate Big Data

International interest in US real estate is waning

(REAL ESTATE BIG DATA) New NAR survey shows the continued decline of international interest in US properties.

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Evictions, boomerang kids, and bankruptcies, oh my! What other dramatic twists does 2020 have in store for the housing market? Apparently, now international interest in US homes is waning.

The National Association of Realtors recently released a study showing foreign investment in US homes is down 5%, marking a second consecutive year of decline.

From April 2019 to March 2020, home sales to both recent US immigrants and buyers residing overseas have decreased 8% and 1% respectively compared to the previous twelve month period.

The report highlights a few more key findings: Notably, Chinese buyers continue to be incredibly influential on global real estate markets, and the US is no exception. But Canada is also an important player here in the States. Since 2013, China and Canada have led US residential sales by dollar volume, buying $11.5 billion and $9.5 billion in houses respectively last year.

Those large numbers are partially thanks to the fact that houses sold to international buyers tend to be more expensive compared to the national median, as many choose to live in cities or expensive states like California and New York. Florida, though, remains the undisputed champion for attracting foreign house hunters, accounting for 22% of home sales to international clients.

NAR Chief Economist Lawrence Yun states that some international buyers, like American residents, find it challenging to purchase homes in the US due to a lack of housing inventory. Other contributing factors include “less cross-border travel, falling international trade and fewer foreign students attending American universities,” says Yun.

The NAR press release asserts that international interest in US real estate is still strong. As Americans migrate to more affordable, less populated areas at this time, according to Yun, “better opportunities may become available for foreign buyers in large US cities like New York and San Francisco.”

But the late spring and summer months responsible for the majority of the impact of COVID-19 in the United States are not part of the scope of this study. And while I know nobody wants to admit it, the full extent of COVID-19 remains to be seen in this country. This decline could indicate the start of a larger trend, but only time will tell.

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Real Estate Big Data

Real estate myths created during the pandemic

(REAL ESTATE BIG DATA) Real estate is a finicky field, but the most popular myths surrounding the effects of COVID-19 on the market are purely unfounded.

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In the past six months, there has undoubtedly been a large amount of misinformation regarding the Coronavirus, its treatment, and the long-term ramifications of a pandemic–a phenomenon that has affected, among other industries, real estate. Courtesy of SFGate, here are a few myths you’re likely to experience in the current market.

The first myth–and, arguably, the most prevalent one–asserts that selling your home amidst COVID-19 restrictions is a poor choice. In fact, the opposite is true: Danielle Hale, a real estate expert, explains that people have been able to sell at relatively high rates despite the pandemic. “As long as buyer demand remains strong, I expect the market to remain tipped in favor of sellers,” she adds.

Of course, both taking the proper precautions during showings and maintaining social distancing–along with affording buyers an appropriate amount of grace when settling on a closing date–are important attributes of making a successful sale during this time.

Another myth you’ll probably hear about is tangentially connected to the first–that home prices are declining, thus making it, again, a bad time to sell. This is simply untrue; Lawrence Yun of the NAR points to low mortgage rates, as well as a general lack of people selling during this time, as the culprit. It makes sense that people would want to protect their investments for the time being, after all.

Thirdly, and lastly in the buying-and-selling myth pantheon, you’ll find that people are actually buying houses more now than they were before the pandemic–a direct answer to the myth that buyers are hesitant to close on properties for now. Just like the last item, you can look to low interest rates and high demand as the justification here.

Then, there is the myth that you can no longer tour homes in person seems real enough, and it may be standard practice for some sellers; however, the majority of homes being sold in the United States, as of now, are viewable in person–and, more importantly, with the viewer’s safety at the forefront of the seller’s endeavors. However, SFGate does point out that, due to rising cases in much of the United States, some of these restrictions may eventually return.

Finally, the myth that buyers are actively attempting to leave cities in favor of suburb living seems to be circulating as of late. SFGate acknowledges that this myth is “partly true”, but that doesn’t mean city listings aren’t available–nor does it mean city dwellings will begin to lose their value. After all, urban living has consisted of largely prime real estate for as long as any of us can remember, and the Coronavirus probably won’t outlast that allure.

The bottom line is this: Real estate, like everything else, has been affected by COVID-19–but it hasn’t been completely turned on its head and wiped out like some may think.

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Real Estate Big Data

Home sales dive 10% in May – when is a sales rebound expected?

(REAL ESTATE) Home sales plummet in May, which we all expected, but when will sales begin to recover in light of this pandemic?

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As you would expect, May marks the third consecutive month of home sales declines amidst a global pandemic. According to the National Association of Realtors (NAR), existing home sales fell 9.7% in May compared to April, down a whopping 26.6% compared to this time last year.

The silver lining is that values continue to improve, with a median existing home price of $284,600 nationally, up 2.3% from May 2019, marking the 99th month of year-over-year gains.

Inventory levels rose 6.2% from April, and are down 18.8% from May 2019. Average days on market didn’t move much, at 26 days being equal to May 2019, and down from 27 days in April.

“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Dr. Lawrence Yun, NAR’s chief economist.

He added, “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”

Sales also reflected an uptick in suburban sales over urban home sales. Dr. Yun cited work from home demands, however, anecdotally we would add some people moving away from densely populated areas in response to recent unrest.

What will ease housing conditions?

As he has observed repeatedly in recent years, Dr. Yun points to home builders. “New home construction needs to robustly ramp up in order to meet rising housing demand. Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”

Mortgage Banker’s Association’s (MBA’s) SVP and Chief Economist, Dr. Mike Fratantoni’s insight pointed to inventory challenges as well: “As buyers are returning to the market, as evidenced by the strong, nine-week rebound in MBA’s purchase application data, the lack of homes for sale will be a real constraint. Although demand certainly dropped in March and April due to the crisis, supply dropped even more, and has thus far kept home prices from declining. We expect that home-price growth will pick up over the summer due to insufficient supply levels.”

Dr. Fratantoni noted, “The market is supported by strong demand from first-time homebuyers, who represented 34% of home purchases in May. Millennial-driven demand will be a tailwind for the market for the next several years.”

“Although the real estate industry faced some very challenging circumstances over the last several months, we’re seeing signs of improvement and growth, and I’m hopeful the worst is behind us,” said NAR President Vince Malta, broker at Malta & Co., Inc.

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