Thinking about unintended consequences of real estate data
5/4/2014 | Real Estate Blog
Not so long ago, if an individual wished to purchase either a home or a piece of commercial real estate, he or she was compelled to do research in local newspapers, through word-of-mouth and/or by simply roaming through interesting neighborhoods and peeking around to see which properties might be available. Now that so much real estate data is available online, many individuals now choose to conduct the vast majority of their research through resources available on the Internet.
Many websites devoted to real estate transactions and general real estate research are highly sophisticated and contain a wealth of data. Sometimes it seems that any potential x-factor you could ever imagine caring about is provided by these websites. This abundance of data is arguably beneficial for prospective buyers in a number of ways. However, it is important for anyone considering a real estate purchase to contemplate some of the unintended consequences of analyzing so much data prior to purchase.
Recently, a journalist employed at the real estate trade publication “Inman News” wrote a four-part series about the ways in which extensive real estate data online may actually be serving to segregate rather than integrate neighborhoods. Because many real estate sites make neighborhood demographic data including age, income levels and race-related statistics available, home owners and businesses may intentionally or unintentionally gravitate towards neighborhoods heavily linked to a certain segment of the population.
Ultimately, real estate transactions tend to be made only after numerous factors have been considered. However, if extensive online data may be causing you to make decisions based on unintentionally prejudiced reasons, you may wish to consider omitting certain data points from your searches in order to avoid being influenced in particular ways.
Source: Bloomberg Businessweek, “Does Better Real Estate Data Encourage Racial Segregation?” Karen Weise, May 1, 2014