Almost a decade ago, Jeremy Sicklick, co-founder and CEO of San Francisco-based HouseCanary, was working on a number of real estate projects with several builders and private equity clients to get a grip on the crumbling market. Then a partner and managing director at Boston Consulting Group, he was responsible for valuing real estate assets, and tried to predict the future appreciation of certain neighborhoods and areas. As Sicklick worked on more and more projects, he became stunned by the lack of an accurate home appraisal product in the $30 trillion residential real estate market. Real estate agents, lenders, appraisers, investors and consumers lacked the tools, resources and information to accurately and objectively value properties.
While the mining of data has transformed other industries – such as science, medicine and construction – the real estate market has lagged, as data has been fragmented and spread across 3,000 counties, more than 750 regional Multiple Listing Services and hundreds of ancillary sources. Sicklick saw a great opportunity to use technology and data science to modernize the real estate industry. He partnered with economist and statistician Chris Stroud – then a 27-year-old doctorate student – and the two formed HouseCanary in 2014. Their goal was to aggregate and analyze vast amounts of real estate data to help investors, lenders and real estate professionals make decisions in real-time. In just a few years, HouseCanary has amassed an impressive client roster that includes Invitation Homes, a leading owner and operator of single-family homes for lease and a former Blackstone subsidiary. Other clients include major lending institutions.
“Identifying accurate valuations and rent prices can be incredibly resource intensive,” says Dallas Tanner,Executive VP and Chief Investment Officer of Invitation Homes. “Now, with HouseCanary’s data analytics, we have prompt and direct access to the most accurate data, which helps us manage our portfolio efficiently and in a way that benefits our residents.”
To date HouseCanary has raised $33 million in Series A financing from investors like Hillspire, Eric Schmidt’s family office, Alpha Edison, Raven Ventures and ECA Ventures.
“As a real estate investor, I have experienced first-hand how hard it can be to get good data that doesn’t go stale,” says Lauren Pressman, head of real estate investments at Hillspire. “Most real estate data is issued quarterly or in single reports, forcing real estate investors to make decisions based on lagging, outdated and often not validated data. I think we all saw the negative impact of many of these decisions during the housing crash.”
HouseCanary’s platform aggregates millions of data elements, including more than four decades of property data and a rapidly expanding arsenal of proprietary calculations and analytics, to accurately define and forecast values and market influences. In contrast to data providers like Case-Shiller, which uses some 20 indices to estimate pricing, HouseCanary uses some 20,000 price indices, which allow appraisers to incorporate many other details into their analyses – aerial maps, plat maps, flood maps, proximity to everything from golf courses to high-tension power lines – many of which are being entered manually now. HouseCanary even runs real-time audits for appraisers in the field, where and when issues potentially affecting pricing are discovered.
Last month, the company expanded its reach by providing its real estate data through Google Cloud. Making HouseCanary’s platform available in the cloud gives investors greater access to a vast amount of real estate data and analyses they can act on in real time. It also helps businesses of all sizes understand different real estate markets around the country and modernize how they make investment and lending decisions.
“We’re just seeing the early days of streamlined real estate transactions. This year we will see appraisals go to five days [compared to weeks]. Next thing is streamlining the financing. Streamlining the finance process opens everything else up,” Sicklick says. “Whether you are a consumer, a realtor, a lender or an appraiser, we want them all to have access to the same information to get the same value in a consistent way.”
He continues, “We’re going to focus on the U.S. for the next couple of years. It’s a $30 trillion market here. I think we can build a multi-billion dollar business.”