"This is as close to real-time data as you can get. We're looking at search traffic that is taking place that month—and really right up to the day of the 'Nowcast'—to interpret what's going on in the market," said Rick Sharga, executive vice president of Auction.com.
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The data modeling is the brainchild of Google's chief economist Hal Varian, who defines it as "contemporaneous forecasting" or the ability to predict what is happening while it is happening.
"Google Trends data—publicly available search information—offers valuable insights into current economic and consumer trends," Varian wrote.
Auction.com is then layering its data over the search expertise to come up with the home sales forecast. They are looking at certain parts of search traffic that relate to people looking for and buying properties.
"Then based on the relationship we've seen between that search behavior and real estate purchases, we can predict what that month's activity is going to look like," Sharga said.
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Getting real-time housing data could be advantageous for investors, financial services companies, government entities and real estate professionals. As with any type of investing, knowledge is power. While not exact, Auction.com executives claim they have modeled the data going back 10 years and that their numbers are very close to the actual Realtor numbers, usually beating consensus forecasts.
"We'll keep our eyes on it. We'll review it," said Adam DeSanctis, a spokesman for the NAR. "We stick by our data and believe it is the most representative of the market."
According to the first Auction.com Nowcast, existing home sales in October will come in at a seasonally adjusted annual rate of 5.178 million units. That is essentially flat from September's pace, reported by the Realtors.