Market Knowledge, Data, & You
Why do you need “market knowledge”? Well, market knowledge helps you make better decisions. And why do you want to make better decisions? Well, because any land development and home building project is just a long line (a seemingly endless line) of decisions, choices, adjustments, and compromises brought on by the myriad of external forces which impact these projects. So, the better you are at making those decisions, choices, adjustments and compromises, the better the results you achieve on that project.
So market knowledge leads to better decisions which leads to better results. But what is market knowledge and how is it obtained. I think of market knowledge as the combination of data, with the interpretation of that data.
Market Knowledge = Data + Interpretation
The data part of that equation is straightforward. It’s the result of a process that includes: research, collection, organization, data entry, verification, presentation, and delivery. This is what RealNet does – daily for commercial transactions, and monthly for new home markets. It’s a lot of effort, hard work, and time but it’s relatively straightforward.
The interpretation part is less straightforward. It requires experience, perspective, context and lots of local observations. This is where smart users of data, and an extensive and timely database come together to make better decisions.
And by better decisions I don’t just mean the big yes/no or right/wrong decisions but the multitude of everyday decisions, choices and adjustments that are required to drive projects and businesses forward. Even making just slightly better decisions along the way can add up over time resulting in a much better return. Just like compound interest works over time, think of each decision, big or small, as a way to make an extra deposit in your compound interest collecting account thus increasing the payoff down the road.
Hopefully, over time, I can give you many ideas on what decisions can benefit from a good base of data and your interpretation. The big ones are land acquisition, project planning, sales and marketing performance tracking, and strategic business planning. Other less obvious uses of data for better decision making include advertising performance testing, investment allocation decision, and competitive advantage identification.
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