Magazine article Real Estate Issues

Real Estate Research & Valuation Using the Internet

Magazine article Real Estate Issues

Real Estate Research & Valuation Using the Internet

Article excerpt

INTRODUCTION

In recent months, we have been hearing and reading a lot about the potential for faster, more flexible, easily updateable, and less expensive real estate research and valuation using Internet and World Wide Web (WWW) resources. While the potential for revolutionary change and dramatically improved operations may exist, there remain many pitfalls and risks along the way. This manuscript explores both the possibilities and the pitfalls that exist in this area; identifies real estate research and valuation professionals in both large firms and small firms for possible winners and losers as firms adapt to the new technology; and finally, suggests appropriate strategies for research.

REVIEWING THE STATE OF THE ART

Most of the raw data items that are required for a real estate consulting, valuation, or research project can now be accessed from a combination of sites on the Internet's World Wide Web. These raw data items can be supplemented by proprietary data maintained by consultants in their confidential files. All this information can then be integrated into a comprehensive presentation format, complete with text, graphics, interactive maps (GIS), and even, if desired, audio and video, and an on-line discussion capability. Reports can be updated on a daily, or even more often than a daily basis, as new data is fed into report templates. Buyers of information can specify "alerts," to be triggered by specified events. In other words, if desired, the report can become almost a "real- time," living document, rather than a one time snapshot of conditions at a point in past time. The model for this Internet-based research/valuation presentation methodology is the so-called "portal" concept. In Internet parlance, a portal is a multipurpose Web page that serves as a "personal newspaper" and lets the challenge of "riding the technology tiger," as the trends toward "faster, smaller, more powerful, and cheaper" continue and intensify in the worlds of hardware and software. In the world of data, the challenge is one of sorting through an increasing information overload. More data becomes available, in different formats, and with different pricing structures, on an almost daily basis.

To cope with these changes, we are seeing the emergence of a new kind of intermediary. While it was originally thought that the Internet might eliminate intermediaries or middlemen, now we are seeing a new, specialized variety of intermediaries. First, people are filling the role of "trusted advisor" on technological change, data quality, etc. Some are on corporate or professional association payrolls; others operate in free-lance mode, often from their Web sites. But over time, and sometimes quickly, the human intermediaries are being supplemented or replaced by non-human intermediaries (forms of intelligent software that perform the same functions).

For example, some of the same "auction" software that now helps users buy plane tickets or cars based on detailed "specs" could be used to let purchasers of real estate or valuation information put their detailed requirements out for bid, and receive bids from providers over the Internet. This could spark a wave of new competition, as barriers to entry of new providers would be low.

Conversely, it could solidify the position of established real estate information brand names, if they are smart enough to adapt their offerings.

WHAT DOES THE FUTURE HOLD?

The one thing we can be sure of is volatility. There will be rapid evolution of data offerings and formats, and provider firms. Buyers of real estate research and valuation information - such as banks, investment bankers, and pension funds - will increasingly demand that their advisors and service providers serve them on-line. Big players in the real estate industry will make large investments as they attempt to maintain their established positions in the world of cyber-real estate. …

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