With help from Internet giant Google, Auction.com announced the launch of "Nowcast," a new housing report designed to combine industry data, proprietary company transaction data, and Google Trends findings to predict market trends as they're happening. The result is a statistical report released monthly, weeks before other closely watched real estate data—such as the National Association of Realtors' existing-home sales survey—comes out.
The report is based on data modeling developed by Google's chief economist, Hal Varian, who described Nowcasting as "contemporaneous forecasting."
"Google Trends data—which is anonymized, publicly available search information—offers valuable insights into current economic and consumer trends," Varian said. "By layering industry-specific transactional data and subject matter expertise over that search data, organizations such as Auction.com are able to create powerful predictive models for accurately forecasting buying behavior in the present and for the coming months."
According to Auction.com, internal testing conducted for the months of April–September showed "considerable accuracy" in predicting market performance.
Based on data collected for this month, Auction.com predicts existing-home sales will fall between seasonally adjusted annual averages of 4.97 and 5.38 million units, with a targeted prediction of 5.19 million. October's sales rate comes just above September's rate of 5.10 million (as predicted by Auction.com).
Nowcast's development comes more than half a year after Google's growth equity fund, Google Capital, invested $50 million into Auction.com. Using that support and Google's access to data and analytics, the company says it hopes to expand its monthly forecast to also predict new home sales and home pricing trends.
"Auction.com's ability to deliver timely analysis of current market conditions can provide critical insight and enhanced predictability to industry professionals, economists and government entities alike," said Rick Sharga, EVP for Auction.com. "Since real estate trends play such a vital role in our overall economy, there's a compelling need for accurate, more timely housing market forecasts, rather than data that comes out two to four weeks later."