Search Terms and Home Sales Provide New Insight

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The internet can provide lots of information, but trend analysis of search terms to actions is a new field of analysis. An internet firm, Hitwise, has done a study of searches for “Homes For Sale” to home sales and has found a correlation that can be predictive and provide real time statistics compared to present reporting tools.

And they are predicting that sales will be up in August bucking the present trends.

This is an excellent example of how search term volume on a term related to an economic indicator, can act as a leading indicator, helping us to predict future indicator movement. In the case of existing home sales, this is possible for three reasons:
1)The search query “homes for sale” is directly related to the subject indicator, the purchase of a home
2)Consumers interested in purchasing a home, likely search for “homes for sale” in advance of actually purchasing a home, from the data above, that gap can be anywhere between two weeks to a month.
3)The National Association of Realtors, and other organizations and government agencies require several weeks (three in this case) to compile and release their number, our search term data is based on weekly data, allowing us to chart volume every Monday for the previous week. via Hitwise US: