A Real Estate Discussion Blog

I just finished attending the first day of Real Trend's Marketing and Technology conference.  I have pages of notes that I hope I can find the time to turn into blog posts, but wanted to get a quick hit up before heading back to the meeting. 

I just finished listening to Kristi Graning, SVP of IT and eBusiness for RE/MAX.  She is a huge asset to RE/MAX. 

If I were a RE/MAX agent, I would make sure I could easily ramble off the following stats to my clients:

- Remax.com has over 4.7 million listings on the site, some of which are updated up to 8 times a day. 

- Because of this rich content, the website is the number one visited brokerage site in the US.  It generated 56,000,000 million visits in 2007.

- Collectively as a brand (this includes the agent level to the national level to the international field) ONE BILLION dollars (yes, that is with a B) are spent annually promoting the RE/MAX brand. 

This is a pretty technical post, but the information is very important to your SEO. 

The California Association of Realtors recently released their annual Survey of California Home Buyers for 2008 which is once again, full of interesting and useful information. 

First off kudos to CAR for changing the name from Survey of Traditional vs. Internet Homebuyers to Survey of CA Home Buyers.  Is there really a difference anymore as searching online for real estate has become pretty ‘traditional'.  Maybe some, but this gap will continue to close quickly.

According to the report, turns out buyers are taking longer to find their dream home, demanding more, and are less satisfied than ever before.  Tough crowd.  To anyone selling real estate over the last couple of years, this shouldn't be a huge shocker, but it is nice to now have data to substantiate the trends, and more importantly use the data to improve where applicable.

Taking longer- When the internet was heavily used during the buying process, the buyer spent an average of 8.3 weeks searching for a home with their Agent, and looked at an average of 12.7 homes.  In 2007 this number was an average of 5.2 weeks. 

Satisfaction is down- Overall buyer satisfaction with their Agent averaged 3.3 in the 2008 survey, it was 4.1 in the 2007 survey.  When asked what concerns they has about the buying process, the two answers most commonly cited were ‘market conditions' and ‘agent responsiveness'.  Those that participated in the survey, specifically asked for better negotiating and faster response times from their agents.  In fact, 80% of those that weren't satisfied with their agent stated the agent "did not negotiate aggressively on their behalf". 

When houses were flying off the market, negotiation skills weren't as crucial and there were a lot less reasons a deal could fall apart (even though many of these reasons today are beyond the control of an agent), so it makes sense that this is more of a concern of the home buyer today than in the past.  But it is also good for agents to know that this is now a trait affecting satisfaction, as it can affect long term referral business.  Also good to know when marketing the reasons one should do business with you. 

As a group, Agents need to get better about response time.  We have seen this in numerous other reports, but customer expectations are very high when it comes to getting a response from their Agent.  In fact, 84% of the participants said response time was either "very important" or "extremely important" in their decision making process.  Again, if you excel at responsiveness, this is something you need to be marketing about yourself.  Just to let professionals know what they are up against, 31% said they expected an instant response (this was 22% in 2007- ironic how they are taking longer to buy, but expect faster answers) and 96% expected a response in 4 hours or less (this was 94% in 2007). 

Now let's talk marketing. 

The sites the public found most useful were: 33%, an individual Agent's site; 23%, Realtor.com; 22%, an "internet listing of a home that I was interested in"; 11%, Zillow, 8%, a real estate company website, and 4% Yahoo Real Estate. 

What do they want to see on websites?  61% wanted multiple pictures and a slide show; followed by maps and directions; agent contact information, virtual tours and neighborhood profiles. 

So while it may be harder to please a home buyer in today's real estate climate, at least we as professionals know what we are up against.  According to this report, two big areas of focus need to be superior negotiation skills and lightening fast response times when it comes to satisfying your customer. 

The sample of buyers in the survey included 1,249 home buyers.  The full report can be purchased in electronic format here for $29.95.  In my opinion, it is one of the best reports that comes out all year. 

Five months ago Zillow launched the Zillow Mortgage Marketplace.  A place where people can go to anonymously request loan information and loan officers can go to interact with these requests for free.  Since the launch of this site, we have had over 67,000 loan requests made that received approximately 390,000 loan quotes from about 3500 loan officers. 

We have learned a lot about the mortgage industry, and now we are ready to learn even more.

Today we are launching a new mortgage blog called Zillow Mortgage UnZipped!  It is a multi author blog that offers mortgage advice, news and opinion for borrowers.  Two very familiar faces from The Rain are going to be regular contributors to the blog, welcome Brian Brady and Mike Mueller!

Mike Mueller, of Mike's Minute and

  Brian Brady, American #1 Mortgage Broker

If you have a desire to also write for the new blog, please visit this page on Zillow Mortgages UnZipped.  Or if you just want to read about the industry from the perspective of some stellar writers, head on over as well! 

The City of Chicago is getting in on the text messaging and alerts phenom. 

Visit the Notify Chicago website, and you can sign up to receive texts, emails, or recorded messages in the event of a emergency for your specific neighborhood from the city. 

Alerts you can sign up for are: emergency incidents, extreme weather, major planned event, public health notifications and transportation/traffic emergencies. 

Just one of the many free services our 10.25% sales tax rate covers!  Sign up today and get your money's worth.  :)

Anyone in advertising will tell you that is in important to track where your leads are coming from- a task that is sometimes easier said then done.  ListHub recently commissioned a white paper to try to tackly this task,and figure out which web channels they distribute to, are providing the best results. 

In case you aren't familiar with ListHub, they offer a service that will syndicate your listings for free to approximately 21 various Internet sites.  They work with over 110 MLSs and have about 65% MLS market coverage.  It is a great service to their clients that they put this report together, as it helps them better understand which sites are working the best.  This is good to know if you are going to spend addition marketing dollars online. 

The full report can be found here.  If you are affliated with a MLS, it is a must read.  The Northern Nevada Regional MLS was used for the case study.  If you are an agent, the results section of the study are of particular interest.  Here are the highlights:

First they looked at where traffic for the NNRMLS's 8700 listings was coming from. 

Then, from this traffic, they looked at who actually turned into a lead for the listing source.

Big props to Yahoo! for taking top honors in both measurements. 

From my perspective as a Zillow employee, these numbers line right up with what I hear from Brokers and Agents, regarding the spread between the number of clicks we generate (12%, ranked 4th) and the number of leads we send (21%, ranked 2nd). The survey says, “It was interesting to note that Zillow’s lead conversion numbers are proportionally higher relative to their referring traffic volume. Not all traffic is the same; some sites attract customers who are closer to making an actual purchase.”

I believe a lot of this has to do with how much content is presented on a site.  For example, on Trulia there is minimal information presented and only one main photo, you need to click over to see the rest of the listing details.  So of course they are going to drive more traffic, but the quality can be lower. 

Conversely, Zillow has very rich content on the site- up to 50 photos per listing.  So while we may send less clicks, when the person clicks over, they quite possibly are further along in the shopping process.

DavidG does further analysis on the numbers saying: "By dividing the second metric by the first, it’s possible to calculate the relative ratio of leads per visit for each site. With that ratio, you can compare the relative value of traffic referred by each site on a conversion rate basis. Only Yahoo! comes close to referring traffic that converts as well as traffic from Zillow does - at 71% of Zillow’s rate. That’s far better than average. For all other sites combined, referred traffic converts at a dismal 40% of the conversion rate of traffic from Zillow. And some sites faired even worse. Trulia, for example, would have had to refer 5 times as much traffic as Zillow to generate the same amount of leads (they didn’t.)". 

If you are not syndicating your listings, you are definitely missing out on some exposure opportunities.  ListHub has a great product to help you gain this additional reach and quite possibly save you some time if you are manually entering listings today.  And now, their current clients have a better understanding of just how their product is performing, very helpful in building an online marketing campaign.

Last week Zillow held its quarterly Webinar to discuss the Home Value reports we put out each quarter.  There were some great questions submitted by agents that had to do with actual data on Zillow.  I thought these were a few that a larger audience could benefit from the answer. 

How far back (months) do you go in public records to come up with your data?

In the case of most of the markets we cover, we incorporate data all the way back to 1996.

If a homeowner adjusts their individual value to an absurdly high level, does it impact the surrounding area values based on that false value?

A homeowner isn’t able to adjust the actual monetary value of their home as it is listed on Zillow. What they can do is adjust property information – square footage, recent remodels, etc. But even if a homeowner puts in false information and their home is overvalued because of this, it won’t affect the valuations of surrounding homes. What will affect the values of surrounding homes are actual sales prices. Moreover, the single erroneous value won’t affect the Zillow Home Value Index as this index is based on the median value of all homes and the median is very resistant to both outliers and some amount of poor data quality.

How can I use your market data w/clients (buyers or sellers) to my advantage when it conflicts, i.e. say it shows a decline when we’ve had appreciation, with available local data on our market from the MLS?

First, you want to make sure that one is comparing the same metrics in our data and the MLS data. We emphasize year-over-year comparisons, since they are the most accurate way to judge the housing market, which varies by season. Some other organizations that put out real estate data use month-to-month or quarter-to-quarter data. At this time of year, that may make the housing market look like it’s doing better than it is, since the summer months tend to see more sales than the winter months.

Even when comparing the same time periods, the Zillow Home Value Index can be quite different than the median sale price because the latter is looking at only those homes that sold – in other words, a subset of all homes and oftentimes not a representative subset of homes in the area. Our data doesn’t just reflect houses that sold in any given time period; it looks at ALL homes in your area, while most other reports look only at sales.

For more details on why the median sale price is generally not considered a very reliable measure of home value appreciation, I’d refer you to this article on Zillow’s Web site. It’s also important to remember that our data includes some homes that might not be accounted for on the MLS, like FSBOs.

That said, I took a look at our data for Hoboken. I think it’s important to note that the city is holding its values better than many others across the country. And I think it would be helpful to point out to both buyers and sellers that Hoboken is seeing great long-term appreciation. Over five years, our data shows 9 percent annualized appreciation. Over 10 years, it’s 10.3 percent. However, you are the expert on your area. You walk around in these houses and know how much they are worth. I know many agents are struggling to convince sellers to price correctly in today’s market; you can use our data to help support a reasonable asking price. Likewise, you can also use the five- and ten-year appreciation numbers to reassure buyers they are making the right decision by jumping into the market.

Is Zillow taking into account foreclosures in each on the neighborhoods data?

We exclude foreclosure deeds (when the home is sold at auction or gets transferred back to the bank), but we do include all sales AFTER foreclosure – sales of homes owned by the bank. Since those are often sold at a lower price, they do often affect the sales prices of surrounding home, and they likewise affect the Zestimates of surrounding homes.

Today was the opening session of the RIS Leadership conference in NYC.  Alex Perillo, President and CEO of the Realogy Franchise, was one of the best speakers.  He opened by showing how the real estate situation we are in now is a by product of the basic principle of supply and demand.  In 2003 we were at about 4.5 months of inventory on the market, this drove prices up.  In July of this year we are at 10.6 months, this is driving prices down.  The last time inventory levels were this high was in 1985 and it took approximately 8 years to get to what is considered a 'normal' market of about 6 months of inventory. 

After delivering this news, Alex did a great job of giving advice on what to do to help correct this market, or help drive business enough to bring inventory levels back in check.  Here were his top take-aways:

1) Know your local numbers inside and out. Don't just know what is happening in your city.  Know it down to the zip code, or the neighborhood, or even the sub division.  And know things like inventory levels, days on market, list to sell ratios.  This will help arm people with information and data and help them make good decisions and see you as a valuable consultant to the process.

2) Get price adjustments.  Knowledge from point 1 will help you do this.  Using this data you'll be able to make statements like "I'm not telling you to lower your price, the market is".  Do monthly CMAs to every seller so they are staying very current with what is going on.

3) Have the courage to say NO to over priced listings.  Taking on overpriced listings adds to the problem of too much inventory, and it is inventory that is just going to sit there and make the market look bad.  With high inventory, prices will remain low. 

4) Become a rainmaker.  Data mine your archives.  Who bought a home from you 7 years ago?  Reach out to them and recommend strategies around the opportunities in your market.  Look to your spheres of influence and figure out unique opportunities to help them or people who are in their spheres. 

5) Aggressively market to renters.  The government has given us a finite window of time to reach out to this group with the first time home buyer's credit.  And then think beyond that to parents who may have kids starting college or grandparents.  Interestingly, Alex said that as he talks to people, most do not understand the difference between a tax credit and a tax deduction, so there is an opportunity to explain this to people and let them know about the hard dollars that are available. 

6) Rebuild consumer confidence. It is estimated that 5 million homes will still be sold this year, regardless of all the bad press real estate is getting.  The media would lead you to believe 500 would be sold this year.  5 million is still a lot of houses.  For the last year Alex has been campaigning Realtors across the country that the best way to do this is by dedicating 20% of your existing advertising budget to SOLDS.  He spoke of this last year at this conference as well, which I blogged about.  People want to know that they aren't alone in buying property, and promoting this inventory set will help get that message across to them, in a non sales way, but in a way that is driven by facts. 

Last quarter when Zillow released our Real Estate Market Reports we experimented with offering a free webinar to agents to go through the data and its applications.  It was very successful, so we are doing it again this quarter and already have over 600 agents registered to participate in the 30 minute call! 

In case you aren't familiar with Zillow's Real Estate Market Reports, each quarter we release a report on what trends we are seeing at a national level, and then we also break down the data to cover trends at a very local level for 165 US metropolitan statistical areas.   

If you're an agent interested in learning about home values in your neighborhood (down to the zip code level), or are in search of the data to convince a desperate seller that their home is overpriced, then you can get value out of this call. 

Please join us tomorrow, on  Sept. 4 at 10 a.m. Pacific, 1 p.m. Eastern, for this free webinar hosted by Jorrit Van der Meulen, our VP of Partner Relations, and Dr. Stan Humphries, VP of Data and Analytics.

Register here--it's free!

"How many houses do you and Mrs. McCain have?"

To an ordinary citizen, this would be a pretty easy question to answer.  But John McCain isn't an ordinary citizen. 

Because he wasn't able to answer this question himself, our editorial content lead at Zillow did some sleuthing and came up with a definitive number for McCain the next time he is asked this question. 

Find out what the number is and take a tour of the homes he owns on this great blog post found on the Zillow blog with all the juicy home details. 

Counting John McCain's Homes