Can Search Engines Predict the Real Estate Market?

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real estate

It's been grim for the real estate market. For example, the National Association of Realtors (NAR) showed that there was a 4.1% drop in existing home sales from June to July. It was the lowest point since January 2004.

But things may not be so bad, according to Hitwise. This company measures what people are searching for on sites like Google, Yahoo and MSN.

So, Hitwise company took a look at the search phrase "homes for sale" and did a statistical correlation with the NAR data. Interestingly enough, this approach predicted the recent decline in real estate.

What's the future hold? Hitwise forecasts a bounce back in real estate during August (there has been a 42% surge in queries). Over the past year, the Hitwise system has been wrong only once.

Yet again, this is an example of how companies are leveraging the power of the enormous amount of online data (which I have written about several times for BloggingStocks.com). It's still in the early stages, but has promise.

Maybe Hitwise can do something to predict the stock market?

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

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Last updated: February 10, 2010: 04:56 AM

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