Big Data is About to Change the Value of Your Home

Even if you’re not planning to sell, big data is about to change the value of your home. The collection and publication of data is going to make a big difference for all of us.


“Big data” is the popular term for the incredible growth and availability of data as more and more information is published online. Most importantly, the data that’s collected can be filtered. That’s going to change the value of your home.

A Thirst for Data: Measuring What Matters
Ryan is spending this week at the U.S. Department of Energy’s National Energy Codes Conference in Nashville. It’s a conference of about 250 people who gather to exchange progress updates and best practices. It helps municipalities avoid re-inventing the wheel when it comes to energy conservation, health, enforcement and other challenges.

The importance of collecting data to determine if the energy codes for residential and commercial projects are working as expected has been a recurring theme at the conference. Much of the data collection has been accomplished through grants provided by the U.S. Department of Energy or from state governments. The studies are conducted by third-party building analysts who audit a sample of homes in a state. This is happening in multiple states and the data is being compared among the states.

These studies are helping the municipalities that permit buildings and the construction industry figure out what can be measured, how to measure it and what really makes a difference. The tools for measurement, like a HERS rating, are becoming more widely used which means more data is becoming available.

The data collected makes it much easier to more accurately compare one house to another. To date, the information available to home buyers has not been very detailed. It’s been limited to things like location, school district, number of bedrooms, property amenities, etc.

Historically, a home buyer has looked at a house and paid for a home inspection before purchasing the home. The buyer has relied on the home inspection to catch any existing issues. The lender will also typically require a home appraisal before the loan is made to the buyer.

Even though a home buyer will collect the information from a home inspection and an appraisal, he|she may still not know monthly utility costs or what health + comfort issues exist in the home until after he|she moves in. Measurement tools like HERS ratings set a home buyer’s expectation for the health, comfort and energy consumption of a property – and that information can be published online.

Changing Expectations
The practical effect of data collection for home owners is that more information being published online means it will be easier for buyers to filter homes by a broader range of characteristics. Since data like estimated energy consumption are being collected, energy hogs won’t be able to hide.

A home that’s not energy efficient will also often have health and comfort issues. That home may have nice finishes and granite countertops but it’s health, comfort, energy consumption, durability and other aspects will also be exposed through better data collection and publication. As you might expect, that will have an impact on the value of the home.

Websites like, Zillow and Trulia allow home buyers to set filters as they look for homes. If you’re trying to sell an energy hog, you may be filtered out of searches – your home may not even show up in the list of available homes.

A Market for Millennials
The real estate market is changing significantly as millennials are predicted to overtake baby boomers this year as the leaders in home purchases. Millennials don’t rely on real estate agents to find homes for them – they bring a list of homes to the real estate agent. Since millennials are shopping online, the value of a home has to be presented online. Millennials are saavy – they’re beginning to look for measurements like HERS ratings and they’re right to be suspicious when that information isn’t available.

Google is moving further into the real estate market by preparing to launch a mortgage comparison tool. Soon, Google’s Compare service will allow users to shop for the best available mortgage. Who knows what data they’ll offer to compare next? It may be your house compared to another.

In Conclusion
Better data in the real estate market means home owners need to be more careful (consult a professional) about home maintenance and improvement decisions. For example, it’s becoming increasingly important to get the health, comfort and energy conservation systems in your home right before you cover them with expensive finishes. As better data changes our expectations, our home values will change too.

As always, if you’ve got a comment or question, please share it below. Thanks!

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Image by Torkild Retvedt used under creative commons license.

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