The first group, accounting for approximately three-fourths of the capital, consists of organizations whose principal businesses are not real estate related for example, manufacturing firms that need space for assembly lines, warehouses, executive offices, and so on. Players in both groups, but especially the second group, more often than not have real estate assets distributed throughout the nation. Their balance sheets can change substantially from one year to the next as the values of their real estate portfolios increase or decrease. Accordingly, these organizations are motivated to keep track of which real estate markets are likely to experience significant appreciation or depreciation in property values in each of the next five to ten years. My previous real estate columns in Business Geographics have discussed how well suited GIS technology is for analyzing and visualizing real estate opportunities.
Market ranking systems usually reside on personal computers.
Concerning data inputs, since real estate is essentially a game of information arbitrage, a considerable number of variables can be included for each MSA, city, county, or other market definition. Turning to the proprietary formulas, many take the form of weighted overlay mapping long used by GIS professionals in urban planning and natural resource management. GIS is used to depict input variables, e.g. a map of the nation showing the population growth rates of major markets, or median householdhold incomes, or employment rates, or other key factors. GIS can also be used to show the current distribution of the GIS user's assets in comparison to the market rankings. As is true of any GIS, a market ranking system is only as good as the data being analyzed and displayed.