Ditch traditional tactics to power site selection with location intelligence, AI, and data analytics
As we examine the real estate and the urban expansion and development landscape, it’s clear that how we identify and predict emerging neighborhoods is undergoing a significant transformation. The convergence of big data, artificial intelligence, and advanced analytics is reshaping how investors, developers, and policymakers approach neighborhood development.
Let’s explore the key trends and technologies driving this change.
Location Data: The Shift from Reactive to Proactive Identification
Historically, the real estate industry relied on lagging indicators such as population shifts, demographic changes, and market trends to identify growth areas. However, this approach often meant missing out on early investment opportunities. Today, we’re seeing a paradigm shift towards proactive identification methods that leverage predictive analytics and AI.
“Traditionally, what people have done is to use methods like understanding population shifts to see where people are moving, because that’s a good indication of where the new neighborhoods are going to be,” Anand Singh, VP of Product Management at CoreLogic notes.
“It could be demographic shifts. It could be understanding the market changes, economic changes, a lot of good traditional methods. But as we have been talking to a number of our clients, what has been one striking part is, while all of these methods are all great in identifying new growth and new neighborhoods, they’re all a bit late to the game.”
Industry leaders are now focusing on leading indicators that can signal neighborhood potential long before traditional metrics show any change. This shift is not just about being first to market; it’s about understanding the complex interplay of factors contributing to neighborhood growth and success.
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The Construction Life Cycle: A New Lens for Analysis
One of the most significant developments in neighborhood prediction is the emphasis on analyzing the entire construction life cycle. This approach considers everything from initial land acquisitions to the final sale of new properties. By observing key growth indicators, analysts can identify patterns and trends that might go unnoticed.
“We’ve looked at a lot of housing and real estate level data to figure out how best to proactively identify these growth areas,” Singh says to explain the importance of this approach. “One is what we call a construction life cycle because new neighborhoods are going to go through some level of construction activity.”
Key growth indicators in this life cycle include:
- Land purchase tracking
- Land designation transitions
- Land subdivisions
- New postal address assignments
- Building permit acquisitions
- New property and sale information
Each stage provides valuable data points that, when analyzed collectively using CoreAI technology, can offer a comprehensive view of neighborhood development trajectories.
The Role of Advanced Technologies
The property industry is increasingly embracing advanced technologies to gain deeper insights, crafting solutions to serve those looking for available land for development:
- Artificial Intelligence and Machine Learning: These technologies are used to analyze vast amounts of data, identify patterns, and predict future development trends.
- Satellite and Aerial Imagery Analysis: AI-powered image recognition allows analysts to track construction progress, assess land use changes, and predict development patterns based on visual data.
- Big Data Integration: The ability to synthesize data from multiple sources — public records, proprietary databases, and real-time sensors — provides a more holistic view of neighborhood dynamics.
- Predictive Modeling: Sophisticated models are being developed to forecast not just where development will occur, but also the type and scale of that development.
Singh emphasizes the importance of diverse data sources explaining, “It’s not dependent on a singular data source. It’s not all public. It’s a marriage of different kinds of data sources structured, unstructured but ultimately it comes together into how you start to construct them into a lifecycle and then extract those signals that you care about from the noise.”
Who Should Care About Finding the Next Neighborhoods?
The democratization of data and analytics is expanding the range of stakeholders involved in identifying emerging neighborhoods:
- Investors and Developers: Use data-driven tools to identify opportunities earlier and with greater confidence.
- Utility and Telecom Companies: Leverage predictive analytics for more strategic infrastructure planning.
- Local Governments: Rely on data to guide policy decisions and plan for sustainable future growth.
- Retailers: Utilize analytics to determine optimal locations for new stores.
- Transportation Providers: Improve route planning and infrastructure development to align with future demand.
Singh highlights the diverse interest in this data saying, “We’re also getting a huge amount of interest from utility companies, for example, telecommunication companies, because any new neighborhood is also going to require amenities to be there, utilities to be there.”
AI: Buzzword or Future-Proof Tech?
The field of neighborhood development prediction is at an exciting crossroads. The integration of advanced technologies, including CoreAI, offers unprecedented insights and allows for more informed decision-making and strategic planning. However, as the industry embraces these new tools, it must also grapple with important ethical and societal considerations.
As Singh aptly puts it, “AI is a buzzword, but it all comes down to the quality of the data, the volume of the data, the velocity of the data, the veracity of the data.”
The future of neighborhood development will likely be shaped by those who can effectively balance technological innovation with community needs and ethical considerations. As we move forward, the focus should be on using these powerful tools to create more equitable, sustainable, and vibrant communities for all.
Ready to leverage advanced analytics and AI to identify growth opportunities in your market? Discover how CoreLogic’s Location Intelligence Growth solutions can help you stay ahead of the curve.
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