At the beginning of July, more than 45.7 million Americans had filed for the unemployment benefits since the coronavirus outbreak triggered the execution of the countrywide stay-at-home orders.
The U.S. Bureau of Labor Statistics currently records a soaring 11.1% unemployment rate throughout the nation with Denver’s rate ranging around 10%. These increasing trends result in both national and local real estate markets realizing serious shock leading to huge declines in home prices, increased foreclosure risks, and millions of homeowners requestingforbearance
Experts note that unlike other metropolitan areas in the Northeastern parts of the country such as New Jersey, Denver could not be facing a triple whammy of an increased percentage of homes facing foreclosure, an above-average case of underwater properties, and a relative increase in unaffordable housing.
One Zumper national rent report states that we should continue expecting substantial declines in rent prices in the coming warmer months this year. Other than recording a slight rise of 0.4% in the national year-over-year rent prices for one and two-bedroom homes at the start of July, the case for Denver continues to dwindle.
Denver came in at number nineteen with another year-over-year decline of about 10% for one-bedroom homes averaging its median rent price to $1,440 and the two-bedroom ones taking a 5.1% dip with a median of $1,880.
As we are yet to realize the full impact of this pandemic on the housing market, interests on solutions are nowhighly prioritized than prepping homeowners and operators for the changing market ahead.
The big data solution
One solution making rounds in the real estate markets during the pandemic is the Broadway-based financial technology app called Beekin. This fintech app uses artificial intelligence and data science to help institutional property investors make more profits and minimize risks.
Beekin works by taking billions of data points on tenant behavior by computing things like their income, shopping patterns, and demographic information. Based on this data, the app then builds a working model and neural network that can be used to tailor specific amenities, decrease turnover, and optimize incentives.
In simpler terms, Beekin strives to determine the probability of your renter moving out and then computes an appropriate discount to keep them. Vidur Gupta -Beekin founder and CEO went on record claiming to have raised retention for one of their largest operators in the country by 600 basis points.
Preparing for the worst
A working real estate model predicts a massive shift in property demand patterns for at least the next 18 months. It further cautions that there could be a recession in the U.S. because of the economic shutdown after the pandemic.
In preparation to survive this storm, many homeowners are now working towards extending their lease terms.
The Zumper report state that short-term property owners who used to rent out homes to travelers are affected by the drastic decline in demand for their clientele and arenow marketing their rentals to long-term Flexi-stays.
In response to the changing market behavior, big data technologies are expanding their platforms to help home investors stay afloat.Beekin’s CEO also confirmed that their initial model is now 75% accurate after receiving important updates and is capable of predicting tenant behavior for at least 40 million renters throughout the U.S.
Other benefits of using such big data platforms are that they have shown to increase occupancy by 5%, lower time on the market, and cuts down on marketing costs. These platforms are expected to play a big role in helping homeowners, property developers, and rental managers acquire, manage, and deploy their properties to the right audiences.
The bottom line
Big data usage has permeated various sectors and markets with experts from various fields relying on it to enhance the accuracy and effectiveness of their services. Since the coronavirus pandemic is likely to cause a recession, big data application in real estate is now expected to increase soon. As AI-based property technology continues to expand, home investors ca look forward to efficient data handling and more accurate outcomes. If you are yet to consider using a set of software tools to get in-depth insights on specific housing markets, big data applications will help reduce uncertainties and risks associated with property investments. Data on the local market trends, properties, and tenant behavior will most likely improve your odds of getting top rental properties as well as limit the chances of being hurt by the expected market swings.